Going South: Successfully investing in S.E. Asia along the BRI
China’s Belt and Road Initiative (BRI) is a monumental global development program initiated to connect China with the world to promote trade, economic integration, and growth. Since its inception by President Xi in 2013, the BRI, set out along ancient land and maritime networks, is now a US$1 trillion project spanning over 137 countries and 30 international organizations. For many investors, particularly Chinese investors, the attraction of South East Asia (SEA) along the BRI is clear. SEA is a large and relatively untapped emerging market experiencing significant economic growth, has relatively lower costs, has a growing middle class, and has huge growth potential. Whilst the general investment outlook for SEA remains cautious due to the US-China trade war and regional geopolitical tensions, the attraction to “go south” has increased in recent times with Chinese companies seeking to hedge their risks, restructure their supply chains, and avoid tariffs arising from the US-China trade war and with the recent uncertainty in Hong Kong. Along with its key focus on infrastructure development and construction, SEA’s key sectors for investment now cover manufacturing, wholesale and retail, technology/media/ telecommunications, real estate and power. In this article, we will discuss the key issues to note in structuring and managing a successful investment in SEA along the BRI.