China's Overseas Industrial Park Investment Layout in Southeast Asia: A New Variable in the Restructuring of ASEAN Industrial Chains

When Chinese Industrial Parks Meet ASEAN: A New Coordinate for Regional Economy, Seen Through Data

Over the past three decades, Chinese private and state-owned enterprises have left a dense footprint on the global economic map by building, financing, and operating overseas industrial parks. The latest tracking data released by the U.S. Council on Foreign Relations (CFR) records 194 such projects, of which 145 are operational or under construction, and 16 have been canceled or suspended. Behind these numbers is a global production network taking shape at an accelerating pace—and Southeast Asia is becoming a key node in this network that cannot be overlooked.

Why Has Southeast Asia Become the Second Most Active Region?

CFR data clearly shows that the geographical distribution of Chinese overseas industrial parks is not random. Sub-Saharan Africa ranks first with the most active projects, closely followed by Southeast Asia. This ranking closely aligns with China's overall outbound investment preferences: Chinese enterprises show strong interest in emerging markets and low- and middle-income countries, in sharp contrast to U.S. investment, which mainly flows to high-income countries.

Economic logic is the core driver. Southeast Asia has a population of nearly 670 million, a rapidly expanding middle class, and an increasingly deepening network of regional trade agreements—including the ASEAN Economic Community (AEC) and the Regional Comprehensive Economic Partnership (RCEP). These factors make the region naturally attractive for the relocation of Chinese manufacturing. At the same time, Chinese enterprises' industrial park layouts in Southeast Asia often create synergies with port and airport investments. CFR's accompanying tracker shows that China's control over overseas ports and airports is strengthening. Relying on this infrastructure, industrial parks can more easily connect to global trade routes, forming a closed loop of "port + park + market."

Looking at the Structural Characteristics of Chinese Investment Through Data

According to CFR data, private enterprises are the main investors in Chinese overseas industrial parks (114 projects), followed by state-owned enterprises (72 projects), with 6 public-private partnership projects. This structure shows that Chinese overseas industrial parks are not the product of a single state will, but the result of multiple market forces driving them together. State-owned enterprises play a more prominent role in large infrastructure such as ports and railways, while private enterprises capture market opportunities more flexibly and move quickly in areas such as manufacturing and logistics.

In terms of status, the vast majority of projects (145) are operational or under construction, with only 16 canceled or suspended. Notably, some stalled projects are directly related to political tensions in host countries, with India and South Korea being typical examples. This reminds us that although economic activities follow market logic, geopolitics has always been an important variable affecting project fortunes. For example, several Chinese industrial parks in the Russian Far East stalled after the 2022 Russia-Ukraine conflict due to Western sanctions and the withdrawal of multinational corporations; even close Sino-Russian political ties could not offset the deterioration of the economic environment.

From ASEAN's Perspective: What Industrial Parks Bring Is More Than Just FactoriesFrom the perspective of ASEAN countries, the arrival of Chinese industrial parks is far more than just "building factories." These projects are typically embedded within larger-scale development plans, linked with infrastructure such as ports and railways to form comprehensive economic corridors. Typical examples include Colombo in Sri Lanka, Gwadar in Pakistan, and Kyaukpyu in Myanmar (although Kyaukpyu is in Myanmar, it lies on the periphery of Southeast Asia). From the very beginning, these projects were designed to combine industrial operations with port facilities, achieving direct connectivity with the Chinese market.

Within ASEAN, Chinese industrial parks are catalyzing several key changes:

First, the formation of manufacturing cluster effects. Industrial parks bring upstream and downstream enterprises in the supply chain together in the same space, reducing logistics and transaction costs and enhancing the overall competitiveness of the region. For example, Chinese-invested industrial parks often attract supporting suppliers to settle in, gradually forming industrial clusters in electronics, auto parts, textiles, and other sectors.

Second, the upgrading of infrastructure connectivity. The construction of industrial parks itself is accompanied by improvements in roads, electricity, water supply, and other facilities. These investments not only serve enterprises within the parks but also spill over to surrounding communities, raising the level of local infrastructure.

Third, the reshaping of trade flows. Industrial parks located near ports and airports can efficiently connect the Chinese market and global shipping routes, enabling ASEAN countries to become more deeply embedded in East Asian production networks. China imports raw materials and intermediate goods from ASEAN and exports machinery, equipment, and high-tech products to ASEAN, accelerating the "internal circulation" of regional trade.

Risks and Challenges: Not Every Blueprint Becomes Reality

However, the expansion of Chinese industrial parks in ASEAN is not without its shadows. The 16 canceled or suspended projects revealed by CFR data remind us that not all plans proceed smoothly. In addition to political friction, local economic volatility, legal environments, and labor issues can all hinder projects. Moreover, some industrial parks may face the risk of "enclave-ization"—becoming too closely tied to supply chains within China while failing to effectively integrate local small and medium-sized enterprises.

While welcoming Chinese investment, ASEAN countries are also carefully assessing long-term benefits. How to ensure technology transfer, sustainable local employment, and compliance with environmental standards are questions that policymakers in each country need to answer. Chinese enterprises, for their part, need to gain a deeper understanding of local society and culture, transforming from "builders" into "long-term partners."

Long-Term Trends: From "China Plus" to "ASEAN Plus"?

In recent years, as global supply chains have undergone accelerated adjustment, the "China+1" strategy has become a common choice for multinational companies. Naturally, ASEAN has become one of the preferred destinations for absorbing production capacity. In this context, Chinese overseas industrial parks play a bridging role: they can help Chinese companies relocate part of their production processes to Southeast Asia to circumvent trade barriers and get closer to markets, while also bringing capital, technology, and employment opportunities to the local area.The CFR tracker shows that the layout of Chinese industrial parks is highly aligned with the pace of the Belt and Road Initiative — the number of new projects has increased significantly since 2013. As RCEP enters its implementation phase, trade and investment facilitation between China and ASEAN has been further enhanced, and the strategic value of industrial parks as the "interface" for economic cooperation between the two sides will only become more prominent.

Looking ahead, ASEAN is expected to evolve from a mere "recipient" into a "co-creator." When Chinese industrial parks truly integrate into the local industrial ecosystem and resonate with the construction of the ASEAN Economic Community, the region will no longer be just a corridor of the global supply chain, but rather a new pole of the world economy with independent innovation capacity and consumption potential. This process will not be smooth sailing, but the direction is already clear.

(This article is written based on the data and research analysis from CFR's "Tracking Chinese Investments in Overseas Industrial Parks" and only represents a regional economic observation perspective. It does not constitute investment advice.)