(Yicai) Oct. 9 -- Chinese companies are moving beyond simply setting up factories in Southeast Asia to build integrated regional value chains, tap local consumer markets and deepen their local presence, the president of Oversea-Chinese Banking Corp.’s China division told Yicai at the recent FutureChina Global Forum 2026.

In the early stages of their expansion into Southeast Asia, Chinese firms often simply relocated their production bases from China to the region, said Wang Ke, who is also chief executive officer of the Singaporean bank’s Hong Kong operations.

However, they are now increasingly leveraging the different strengths of individual Southeast Asian markets to distribute sourcing, manufacturing, distribution and service operations across the region, while maintaining links with China to form integrated regional value chains, he said.

The electric vehicle industry offers a good example, Wang said. Chinese companies may manufacture batteries in Indonesia to take advantage of its resource base, produce chips for smart cockpits in Malaysia and carry out final vehicle assembly in Thailand.

Beyond serving as a manufacturing base, Southeast Asia is also becoming an increasingly important consumer market for Chinese firms expanding overseas, Wang said. In this respect, Chinese companies are following a similar path to that taken by multinational corporations when they entered China 20 or even 25 years ago.

Chinese firms are no longer simply expanding overseas, they are increasingly seeking to establish local roots. To achieve long-term growth in foreign markets, businesses need to integrate into local economies by developing local suppliers, creating skilled jobs, engaging with local communities and building their brands in those markets. Some Chinese companies have already begun to embark on this path, he added.

Cross-Border Financial Services

As a result of this regional layout, Chinese firms’ demand for financial services with both regional reach and local expertise is increasing, Wang said. Financial institutions must not only provide strong services in individual markets but also maintain a regional presence that enables them to support cross-border financing, cash management and risk management.

Singapore is a major hub for financing services in Southeast Asia. For example, projects in Indonesia may require funding beyond what the local financial market can readily provide, given constraints on the availability of certain foreign currencies. Companies may therefore opt to secure financing in Singapore to fund procurement and construction for projects in Indonesia, creating a new demand for cross-border financing.

Businesses’ financial needs also extend beyond securing funding. They may face issues such as currency mismatches when borrowing in US dollars but making payments in Indonesia in the local currency, exposing them to foreign-exchange and interest-rate risks. They must also consider the timing of financing and whether interest-rate hedging is necessary, Wang said.

AI as Growth Driver

Wang also highlighted artificial intelligence as an increasingly important driver of global economic growth. Southeast Asia is an attractive market for Chinese technology and AI firms thanks to its young population, high levels of digital literacy and strong receptiveness to technology-driven business models.

High-tech and AI businesses are inherently regional in nature, Wang said. Although Southeast Asia consists of 10 separate national markets, these firms can expand across borders relatively smoothly. Their investments also generate demand beyond technology itself, driving the need for supporting infrastructure, including data centers, cloud services and energy facilities.

Looking ahead, Southeast Asia could see growing demand for cross-regional energy collaboration. For instance, Malaysia and Thailand are well-suited for solar power generation, while Vietnam is ideal for wind energy. The green electricity generated in these countries could eventually be transmitted via smart grids to high-demand areas such as Singapore and Indonesia.

Chinese companies possess the technology and experience required and are well positioned to participate in and support the development of green infrastructure across Southeast Asia, he added.

Editor: Kim Taylor