Chinese Companies Taping ASEAN Market
As more and more Chinese companies tap into the burgeoning Southeast Asian market, expert and company officials expect localization to be a Key aspect to boost industrial capacity cooperation between China and members of the Association of Southeast Asian Nations (ASEAN).
The long-time friendly ties and close neighborhood provide China and ASEAN countries with unique advantages in industrial capacity cooperation, especially under the Belt and Road Initiative, namely the Silk Road Economic Belt and the 21st Century Maritime Silk Road.
Lu Jianren of China-Asean Research Institute in Guangxi University sees great potential in cooperation between China and ASEAN that was built on solid foundation.
“In the past, we cooperated in traditional sectors like agriculture, now we are working on areas like infrastructure, industrial parks under the Belt and Road Initiative,” he said in a recent interview during a seminar in Malaysia.
Some ASEAN countries are lagging behind in infrastructure where China has advantages in expertise, he said, adding that China have also provided funding support through mechanisms like the Asian Infrastructure Investment Bank and Silk Road Fund.
China has long advocated win-win cooperation with ASEAN and Chinese companies are attaching greater importance to bringing in benefits to the local communities and industries.
Tang Zhimin, dean of international college at the Panyapiwat Institute of Management in Thailand, said more considerations should be put into ways in better matching China’s industrial advantages with the demand of ASEAN countries.
“Localization is very important of industrial capacity cooperation,” said Lu.
For China Railway Rolling Stock Corporation, its ASEAN manufacturing hub based in Malaysia is a all-around exploration for the company to expand operation overseas and seek industrial capacity cooperation. The company has put localization as one of the top priorities.
“We use localization to seek breakthrough in industrial capacity cooperation,” said Li Hong, general manager of the CRRC Rolling Stock Center.
One year into full operation at the facility, the effort has already bear fruits. In the 50-acre CRRC Rolling Stock Center in the Malaysian state of Perak, local technicians can be seen working side by side with Chinese counterparts.
“More than 80 percent of our total staff and more than 90 percent of the technicians at the production line are local recruited, as well as two of its four department chiefs,” said Li.
“We also have our eyes on the future by sending some of the staff to further studies in China, fully funded by the company. We hoped that they could strengthen our management team in the future,” he said.
On procurement, the company has an office devoted to find, cultivate and support local suppliers, which amounted to some 300 ranging from equipment to transportation.
Li said the purpose of the CRRC’s ASEAN manufacturing center was by no means simply sending in Chinese technicians to do the work, but also to boost local economic development and to train local expertise, a common believe shared by more and more Chinese companies.