Rising tensions between Washington and Beijing have led firms to diversify supply chains away from China even as they maintain a presence in the country.
Southeast Asia has emerged as a top beneficiary of the "China Plus One" strategy where businesses seek to reduce the risks associated with full reliance on China's market or supply chain.
"Southeast Asia is well-placed to benefit significantly from the China+1 phenomenon as both foreign and Chinese companies diversify their supply chains and operations," said Kuo-Yi Lim, co-founder and managing partner of Southeast Asian venture capital firm Monk's Hill Ventures. "Vietnam's proximity to China has long made it a preferred destination for supply chains to offshore processes that could drastically reduce costs of production," said Yinglan Tan, founding managing partner at Insignia Ventures Partners.
"It's not just the semiconductor stories in Malaysia that's taking off. You do see a lot more investments intothat have come into play, especially the last couple of months, and perhaps there's other sectors, like solar, EV related components as well. So Malaysia is getting that breadth of investments into the country," said Ang of BofA Securities.
"China+1 is not only for foreign companies in China. Geopolitics and international trade developments also push Chinese manufacturers to diversify their production geographically," said Anders C. Johansson, director of Stockholm China Economic Research Institute under Stockholm School of Economics, in a
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