The ASEAN Coordinates of Overseas Industrial Parks: How China’s Outbound Production Capacity Relocation Re-stratifies Regional Supply Chains

From “Building Factories” to “Building Parks”: An Underestimated Change in Organizational Form

The overseas industrial park tracking database maintained by the Council on Foreign Relations (CFR) records 194 overseas industrial park projects in which Chinese enterprises participated in investment, construction, or financing. Of these, 145 are operational or under construction, 16 have been canceled or suspended, and 33 have undisclosed status. By investor type, private enterprises participated in 114, state-owned enterprises in 72, public-private joint ventures in 2, and ownership information for the remaining 6 is unknown. Geographically, sub-Saharan Africa has the largest number of active projects, followed by Southeast Asia.

Taken alone, these figures can easily be read as an investment list. But for ASEAN regional studies, the more valuable question is: why do Chinese enterprises choose to establish themselves overseas through “industrial parks” rather than “factories”?

A factory is a production unit, while an industrial park is an institutional container—it simultaneously encompasses land development, energy supply, customs arrangements, labor organization, upstream and downstream support, and local government relations. When Chinese enterprises export this development model—already highly mature domestically—overseas, it means they are exporting not just capital but an entire system of industrial organization. For host countries, this is both a fast track for absorbing production capacity and a means by which part of the space for local industrial policy-making is ceded to park operators.

This implication is especially worth close reading for Southeast Asia, which is advancing the building of the ASEAN Economic Community (AEC) and is deeply embedded in the RCEP rule system.

What Does Southeast Asia’s “Second Position” Mean?

According to CFR’s statistical methodology, Southeast Asia is the second most concentrated region for active Chinese overseas industrial park projects. This position is not surprising. Geographic proximity, short maritime shipping distances, free trade agreements signed by most countries, and continuously expanding local market demand—these overlapping conditions make Southeast Asia the most natural destination for manufacturing relocation.

But the “second” ranking itself obscures enormous differentiation within the region.

The establishment of industrial parks depends heavily on three basic conditions: a predictable policy environment, available infrastructure, and a sufficiently large local or nearby market. Southeast Asian countries differ enormously in their performance on these three. Some economies already have mature park development systems and relatively complete electronics and auto parts supply chains, so park establishment looks more like a natural extension of the industrial chain; others are still at the stage of “using parks to attract investment,” where the success or failure of a park depends more on whether the host country can provide stable electricity, ports, and administrative efficiency.

CFR data also show that Chinese enterprises’ overseas investment is clearly biased toward emerging economies and middle-income countries, in contrast to the distribution of U.S. overseas investment, which is concentrated in high-income economies. This difference has direct implications for ASEAN: Southeast Asia is not seeking Chinese investment alone; it sits in the same competitive pool as Africa, Latin America, and South Asia. Industrial parks are therefore not only a tool for exporting Chinese capital, but also a stress test for ASEAN countries to test the effectiveness of their own industrial policies.

The Coupling of Ports and Industrial Parks: Two Radically Different FatesCFR's tracking data points to a structural feature that ASEAN should be wary of: some of the most closely watched park projects are themselves components of larger port developments or special economic zones. Colombo in Sri Lanka, Gwadar in Pakistan, and Kyaukphyu in Myanmar—these three projects tied industrial production to port infrastructure from the outset in order to achieve direct trade connectivity with China. Such parks are relatively more resilient—proximity to ports makes it easier for them to keep operating during short-term economic fluctuations.

For ASEAN, Kyaukphyu is a direct regional example of this model. Port-park integration can indeed reduce logistics costs and shorten transport chains, but it also gives projects a more pronounced strategic character, making them more exposed to scrutiny by third-party countries and more easily drawn into geopolitical issues.

The case at the other end comes from the Russian Far East. Although China-Russia political relations are close, after the 2022 Russia-Ukraine conflict, Western multilateral sanctions and the withdrawal of multinational companies weakened economic opportunities in the region. Many local Chinese industrial parks suspended or scaled back operations, and Chinese investors' interest also declined markedly.

The contrast between these two directions provides ASEAN with a fairly clear basis for judgment: the long-term viability of a park depends more on local economic conditions than on political closeness to China. Proximity to ports and airports can enhance resilience, but it cannot replace local demand, local supporting industries, and stable external market access.

Private-Sector Dominance: More Commercial, More Sensitive

Of the 194 projects, private enterprises participated in 114, significantly more than the 72 involving state-owned enterprises. This ratio is noteworthy.

It means that the underlying logic of China's overseas industrial parks is shifting from state-driven promotion to independent corporate decision-making. Such investment is more sensitive to costs, orders, tariffs, and logistics efficiency, and is more willing to follow customers and supply chains as they move. For ASEAN countries, this is both an opportunity—the targets of investment promotion negotiations are more diverse and decisions are faster; and a challenge—this type of capital is less sticky, and once tariff conditions, labor costs, or infrastructure advantages change, projects can adjust more quickly.

In other words, when ASEAN countries seek to attract parks, the real question they need to answer is not "how to attract investment," but "how to convert it into local industrial capacity after the investment lands." Parks can quickly bring production capacity, but supplier networks, technology spillovers, and workforce skill upgrading require longer-term policy support to take root.

It is worth noting that CFR's park tracking does not cover all economic activity. It is complemented by overseas port tracking and airport investment tracking—for example, Cambodia's Siem Reap Angkor International Airport is included in the latter's records. Only by looking at the three types of data together can one more fully understand the way China's economic presence in Southeast Asia operates: ports, airports, and parks are forming a mutually supporting network of nodes.

Threefold Impact on ASEAN Regional Coordination

First, the Re-Segmentation of Supply Chain Division of LaborWhen production capacity migrates as a whole in the form of industrial parks, what migrates is often not just a single process but a segment of the supply chain. In the short term, this strengthens the host country’s export capacity in specific links, but it may also create a “both ends outside” enclave-type structure—raw materials, equipment, and technology come from China, final markets are in Europe and the United States, and the local economy only handles processing. This structure contributes significantly to export data, but its role in driving local industrial upgrading is relatively limited.

Second, Intra-Regional Competition and Incentive Races

Many Southeast Asian countries have highly overlapping target industries in investment promotion: electronics, auto and EV components, solar PV, and basic metal processing. When Chinese private enterprises can compare conditions across multiple candidate locations, host countries can easily fall into competition over tax breaks, land incentives, and regulatory exemptions. This is rational for individual countries, but for ASEAN as a whole it may dilute bargaining power and weaken the logic of a “single production base” that the AEC seeks to establish.

Third, How Rule Dividends Are Priced

RCEP’s cumulation rules of origin could, in theory, allow industrial parks to flexibly allocate processes among different Southeast Asian countries, thereby increasing the share of intra-regional trade. But this requires alignment among countries’ customs enforcement practices and origin determination standards. Whether industrial parks can truly promote intra-ASEAN trade, rather than merely becoming bilateral corridors of “China—a single ASEAN country—Europe and the United States,” depends on whether regional rules can be used effectively. This is one of the most practically meaningful tests for the next phase of AEC construction.

What to Watch Next

CFR clearly points out that this list is not an exhaustive count. Smaller or unannounced projects are likely not included, the definition of an industrial park has also been deliberately broadened to cover activities such as manufacturing, logistics, forestry, and high technology, and the geographic locations of some projects are only approximate. Therefore, any judgment based on these data should leave room for uncertainty—the real industrial presence may be higher than the statistical figure.

For ASEAN policy researchers and businesses, indicators worth continuing to watch over the next few years include: whether the local procurement ratio of industrial parks rises, whether local suppliers enter the qualified supplier lists of core customers, changes in logistics costs between parks and the nearest ports, and whether host countries incorporate parks into their national industrial upgrading plans rather than treating them merely as export platforms.

Industrial parks do not automatically bring industrial upgrading. They provide a window period; whether local capabilities can grow within that window depends on the choices of ASEAN countries themselves.