Export of Chinese Business and Operational Models

　　Chen Weiheng: In recent years, the trade relationship between China and ASEAN has undergone significant changes. Clearly, bilateral trade ties have become increasingly close. ASEAN has effectively replaced the United States as China's largest regional export market. In 2024, approximately 16% of China's exports went to ASEAN, slightly higher than the share of exports to the US (14%).

　　It is worth noting that China had long maintained a trade deficit with ASEAN in the electronics sector, but this has transformed into a continuously expanding trade surplus in recent years. This not only confirms the enhancement of China's production dominance in this field but also reflects the shift of its production capacity to other markets. ASEAN is becoming an increasingly important manufacturing partner, investment destination, and market for Chinese companies. This is evident not only in the manufacturing sector but also extends to the digital economy and entertainment industries—such as e-commerce and mobile gaming, where Chinese companies have successfully exported their local business and operational models to the ASEAN market.

　　Chen Weiheng: Since the 2018-2020 Sino-US trade friction, the economic bonds between China and ASEAN have continued to strengthen. Based on the steady growth of bilateral import and export volumes, these trade links have demonstrated strong resilience. However, these bonds could face risks when trade frictions escalate, targeting not only China but also other economies with multi-dimensional connections to China.

　　For example, the US is pressuring Vietnam to impose additional tariffs on goods transshipped from China, which is indeed a substantial and critical aspect of the trade relationship between the two countries. But global supply chains are intricate; products often cross borders multiple times and undergo multiple value-added stages, making the practical implementation of tariffs challenging. Furthermore, the US has begun to turn its attention to third countries. Although Southeast Asian countries other than Vietnam are largely unaffected for now, it would not be surprising to see such pressures intensify in the future—especially if the existing so-called "reciprocal" tariffs implemented under the US International Emergency Economic Powers Act (IEEPA) are overturned by law, and the US government seeks other means to pressure trade issues or matters like Russian oil purchases.

　　Companies can address these uncertainties by reasonably upgrading regional supply chains to achieve diversification and build resilience. Asian economies offer manufacturers different types of competitive advantages, which will persist despite tariff uncertainties. However, given the persistent shadow of high trade tensions, the feasibility of establishing production facilities in other developed economies should be considered and studied.