China-ASEAN Monitor

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Economy, Investment and Trade

 

Chinese venture capital investment in ASEAN surges fourfold
(10 July 2019) Chinese venture capital investment in Southeast Asian technology companies grew fourfold in the first half of 2019 reaching US$667 million, up from US$148 million during the same period the year before, according to Refinitiv data. Moreover, total venture capital investment in the region reached US$3.4 billion during the period, representing an over 300% year-on-year increase. According to a Chinese venture capital firm practitioner, the Southeast Asian market is especially attractive given its high mobile internet penetration and burgeoning digital economy. On the other hand, China’s mobile internet growth has reached maturity and is slowing down. As such, Chinese firms and investors are looking at Southeast Asia as their next market.
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Cambodian bourse launches Chinese version of mobile trading system
(12 July 2019) The Cambodia Securities Exchange (CSX) launched on July 12 a Chinese version of its Mobile Trading System (MTS) as part of its efforts to encourage Chinese investors to trade on the CSX. According to the Cambodian bourse’s market operations head Kim Sophanita, the Chinese version was made in response to feedback from Chinese investors who said that they were unable to utilise the MTS as it was only available in Cambodian and English. Now, Chinese investors will be able to trade CSX stocks and access market data in their native language through the MTS. The MTS allows investors to trade stocks conveniently. The CSX, which was launched in 2012, currently lists five companies and two corporate bond issuers.
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Indonesian businesses urge government to raise tariffs on Chinese steel
(12 July 2019) Indonesian steelmakers called on the government to raise tariffs on Chinese steel imports and protect the domestic steel industry. The calls come as Indonesia’s largest steelmaker Krakatau Steel announced last week that it intends to cut 30% of its current workforce in stages and sell non-core assets in the coming year to improve its financials. Krakatau Steel has been reporting losses since 2012 and it reported a net loss of US$62.3 million in the first quarter of 2019. According to the Indonesian Iron & Steel Association (IISIA), local steelmakers produce 17 million tonnes of steel each year, but only 57% is absorbed by the market. Furthermore, half of the current 20.3 million tonnes required domestically is supplied by foreign firms, with the bulk of imports coming from China. According to the IISIA, local contractors prefer Chinese steel because of its low prices, which Chinese steelmakers are able to offer because of tax incentives provided by Beijing.
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China-led Kyaukphyu deep-sea port project in Myanmar inches ahead
(15 July 2019) Myanmar’s Kyaukphyu deep-sea port project began conducting the environmental and social impact assessment and preliminary geological survey required to move the project forward earlier this month. The assessments come eight months after the Myanmar government signed a framework agreement with a consortium of four companies led by Chinese state-owned CITIC Group Corporation to develop a deep-sea port in Rakhine state’s Kyaukphyu Special Economic Zone under China’s Belt and Road Initiative (BRI). Nevertheless, the fate of the project remains in question, despite the Myanmar government’s success in renegotiating the project’s total cost from US$7.5 billion to US$1.3 billion and its shareholding ratio from 15% to 30% last year. The project is expected to continue to face public backlash due to its perceived lack of transparency and the Rohingya crisis in Rakhine state.
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Thai fruits and vegetables exports to China record 31% y-o-y increase in first five months of 2019
(10 July 2019) Thailand’s exports of fruits and vegetables to China recorded a 31% year-on-year increase reaching US$1.2 billion in the first five months of 2019, according to data published by the Thai Trade Negotiations Department. Fruit exports saw a 123% year-on-year increase as it accounted for US$838.61 million of the sum, while vegetable exports dipped by 33% accounting for US$361.08 million. According to the Thai trade negotiations department head Auramon Supthaweethum, Thai exporters continue to benefit from the ASEAN-China Free Trade Area which first came into force in 2003. Last year, Thailand recorded a 1,312% increase in export value of fruits and vegetables shipped to China totalling US$1.93 billion, making China the country’s third largest export market for fruits last year after Hong Kong and Chile.
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