Manufacturing goes to Southeast Asia, and these four industries are growing fastest

Southeast Asia, with its large scale, young size and relatively vertical market, has become the preferred market for many institutions and enterprises to go overseas. Among them, manufacturing enterprises are quite worthy of our attention.

From 2021 to 2023, the cumulative investment of China's manufacturing industry in Southeast Asia will exceed US$40 billion, far exceeding Europe, Latin America and other regions. Southeast Asian countries such as Indonesia, Malaysia, and Cambodia are attracting a large amount of investment from China.

I will start with "Chinese manufacturing enterprises going overseas to Southeast Asia" to analyze the current status of going overseas, key areas, the "moat" of China's manufacturing industry going overseas and the future growth code for you.

① China's manufacturing accounts for more than 30% of global manufacturing, but the Chinese market can only absorb less than 20%. It has become a general trend to seek greater development space and new increments in overseas markets.

② The industry pattern of China's manufacturing industry going overseas has basically been formed. The four pillar engines of the navigator, the leader, the navigator and the sustainer are leading "China's smart manufacturing" to a broader international market.

③In 2023, China's exports of the "new three things" in Southeast Asia increased by 89.3% year-on-year, leading the world.

As a manufacturing powerhouse, China has ranked first in the world in terms of overall scale for 14 consecutive years. According to data from the Ministry of Industry and Information Technology, China's manufacturing added value will be 33 trillion yuan in 2023, and its total output value will account for 35.0% of the global market, making it the center of the global manufacturing industry.

As China's domestic manufacturing industry continues to expand and upgrade to high-end, it is inevitable that the industry will spill over and transfer. Currently, China's largest export market is no longer the United States and the European Union, but the Southeast Asian countries at its doorstep.

To judge the importance of the overseas market, overseas investment is an important "barometer". In this report, we start with two data: investment stock and new investment amount.

First, let's look at the investment stock. For the manufacturing industry, the overseas investment stock means that the two countries have important strategic behaviors in the local market, with certain scale effects and industrial chain foundations.

According to the data of the Ministry of Commerce, as of the end of 2022, the direct investment stock of Chinese manufacturing enterprises in Asia was US$136.13 billion, higher than Europe, Latin America and other regions. Of this 100 billion investment, 30.4% went to ASEAN, reaching US$41.37 billion, highlighting the importance of ASEAN in China's manufacturing overseas map.