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China Briefings

Reports on China issued by Samsung Economic Research Institute

Southeast Asia-based Overseas Chinese Companies Advancing into China

Southeast Asia-based Overseas Chinese Companies Advancing into China

PARK Bun-Soon, KIM Kyung-Hoon

Oct. 23, 2012

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Overseas Chinese capital consists of assets of overseas Chinese companies based in Taiwan, Hong Kong and Southeast Asian nations. Overseas Chinese capital in Southeast Asia is relatively small when compared with its counterpart in Taiwan and Hong Kong. But it has played a critical role in Southeast Asia's economy. Since the Second World War, overseas Chinese have strengthened their status in Southeast Asia by developing a far-reaching network within the region and forging close relations with political powers in each nation.

Overseas Chinese companies in Southeast Asia gradually gained supremacy in service industries such as the finance, distribution and real estate development industries. Also, they increased their investment in the manufacturing industry between the late 1980s and the early 1990s when Southeast Asia's economy grew rapidly. But the financial crisis of 1997, resulting from investment spree, sent a shockwave through Southeast Asia's overseas Chinese companies and their growth models. Since then, they have restructured their debt portfolios, sold assets and improved business structure to survive.

During the restructuring process, they lost a large amount of assets and some of them even disappeared from the business scene. On the other hand, some Southeast Asia-based overseas Chinese companies have successfully expanded their business into China. Considering their strong presence in Southeast Asia and China, Korean companies need to cooperate with them when making their way into the Chinese markets.

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