China’s investments and construction contracts in ASEAN rebounded to US$11 billion in the first six months of 2019, double the amount in the six previous months, Maybank Kim Eng data showed. For the whole of 2018, investments hit $22.4 billion, down from the peak of $38.2 billion seen in 2017.
The recovery was largely led by Indonesia, Cambodia, Singapore & Vietnam, while revival of BRI projects in Malaysia is expected to boost Chinese investment in 2020.
In all, Chinese investments in ASEAN account for 35 percent of all BRI projects between 2014 and 2018, with Malaysia taking up the largest share at 7.2 percent, which is worth $27.5 billion.
China investments are also driving a property and tourism boom in Cambodia as real estate investment surged 53 percent to $4.6 billion in the first seven months of 2019, compared to the same period last year.
Maybank Kim Eng economists pointed out that as China becomes a larger investor in the region, the US and Japan are working on more Indo-Pacific initiatives such as the US Development Finance Corporation and Japan’s Partnership for Quality Infrastructure.
A recent survey showed that almost 25 percent of US firms in China plan to shift their manufacturing facilities to ASEAN as a result.
Maybank Kim Eng noted that China’s investment in the US is collapsing, reaching just $3 billion in the first half of 2019. Investments have been on a decline after hitting a peak of $55 billion in 2016.
