China transforms the economies of Southeast Asia: this is the big picture
‘Rather than setting up new entities, Chinese companies tend to invest and cooperate with existing players’
The narrative that China’s signature Belt and Road Initiative is merely a ploy to extend China’s influence abroad is missing the big picture.
Surely, increased economic influence is a positive byproduct for Beijing, but that does not preclude important benefits for others.
Take, for example, Southeast Asia, a region that China is transforming economically – for the better.
“Rather than setting up new entities, Chinese companies tend to invest and cooperate with existing players,” Jeffrey Sun told The Asset.
Many of the Chinese firms are taking minority stakes in companies, said Sun, who is a partner at Orrick’s, an international law firm that advises Chinese e-commerce firms.
“The role of Chinese companies investing in the e-commerce space in Southeast Asia is mainly about bringing in the funds and the technology,” according to Sun.
“China, compared to certain regions in Southeast Asia, is relatively more advanced in e-commerce development. In the meantime, Chinese companies gain local on the ground logistic resources – even it is not 100% controlled by [the Chinese entity].”
While Beijing has been wary of overseas investment in certain sectors, following a capital outflow scare, “for logistics and e-commerce, the Chinese government seems to be more willing for Chinese investors to go out, which is a good thing for the Chinese government to do,” Sun said.
“I expect the Chinese government to facilitate China’s ODI (overseas direct investment), rather than directly investing government’s money. At least, I believe this is a case in e-commerce, and I want to see this trend replicate in other areas as well,” says Sun.