For over a decade, China has been ASEAN’s largest trading partner, having consistently recorded trade surplus since 2014. While a trade deficit is neither inherently good nor bad, bringing the trade balance closer to equilibrium presents significant opportunities for businesses in both regions to tap into the vast potential of each other’s market. Emerging trends reveal substantial untapped opportunities for players across Southeast Asia and China, illustrated through multiple examples of inbound and outbound ventures that highlight the dynamics between these vibrant markets.
Strong Trade Relationship between China and Southeast Asia
The trade partnership between China and Southeast Asia shows no signs of slowing down in the foreseeable future. Since 2009, China has continuously led the trading pack for ASEAN, and in 2020, ASEAN took center stage after surpassing European Union to become China’s largest trading partner, indicating increasingly strong economic ties between the two partners. Players in both regions can take advantage of this close trade relationship to expand beyond their home markets.
The Chinese market offers immense potential turnover for Southeast Asian players, owing to its large consumer base being double that of the region, combined with strong consumer spending power. In turn, Southeast Asia’s rapid economic growth, supported by the role of social media contributing to changing market behavior, displays larger opportunities for Chinese players to grow their presence in the region. Consequently, players in both regions can take advantage of the close bilateral trade relationship and potentials to expand beyond their home markets.
A Flavorful Connection: China’s Expanding Taste for Southeast Asian Flavors
China’s vast consumer base is demonstrating an increasing appetite for products originating from Southeast Asia, fueled in part by social media trends that spark curiosity about diverse flavors and cultural experiences. The growing interest is reflected in the rising trade flows and market presence of Southeast Asian goods, such as the region’s durians and Vietnamese coffee which have gained widespread acceptance among Chinese consumers, underscoring strong potential for continued growth.
The Durian Boom: Southeast Asia’s Fragrant Breakthrough in China
Durian serves as a notable example of how a signature taste of Southeast Asia can be successfully welcomed into mainland China. The country reached its current Durian import peak recorded in 2024, totaling 1.56 million metric tons, valued approximately at USD 6.99 billion. Thailand and Vietnam have become the Durian representatives of Southeast Asia, possessing over 99% of the import share, followed by Malaysia and the Philippines holding the remaining small portion of the share.
Malaysia is expected to gain larger market share in coming years following the growing appetite for fresh, naturally ripened fruit. Malaysian durians are harvested only upon falling from the tree while their Thai and Vietnamese counterparts are cut from the trees before full ripening. This unique value proposition allows Malaysia to compete effectively despite existing dominance. Despite the promising growth, Southeast Asian players are hampered by increasing competition as countries like Indonesia and Laos have made their move to replicate their neighbors’ success. Growing concern over food safety and quality and oversupply also pose challenges for industry’s newcomers.
Vietnam’s Coffee Industry: Brewing a Cultural and Commercial Success
Known as tea-loving consumers, the Chinese market has shown a growing interest towards coffee with 15% growth in annual consumption, equivalent to 3.08 million bags based on 2023 data. These consumers are welcoming both local and international coffee chains which compete intensely, saturating the country with over 49,691 branded coffee shops. As a close neighbor to China, Vietnam has successfully emerged as the country’s third-largest coffee supplier in 2024, exporting approximately 24,100 tons valued at USD 100 million, marking remarkable growth of over 50% in terms of volume and value.
Beyond traditional exports through wholesale and bulk shipments, Vietnamese coffee names like King Coffee and Mr. Viet have made their debut in China's enormous e-commerce market, offering ready-to-drink products. Notably, King Coffee quickly achieved success by soaring to the top four best-selling brands on Tmall Supermarket. In coffee chain market, some leading brands have established their presence in China by introducing authentic cultural coffee experience. Trung Nguyen Legend, for example, introduced its first flagship store in Shanghai in 2022, achieving profitability in under one year. Highlighting an integrated model – from bean to cup and a unique cultural value proposition which quickly capture appeal to consumers, the brand has grown to eleven stores across China by 2024.
Evolving Manufacturing Powerhouse: China’s Growing Footprint in Southeast Asia
China has firmly established itself as a global manufacturing powerhouse, and its role is evolving as it increasingly expands investment and production into Southeast Asia. This strategic shift, driven by rising labor costs in China and geopolitical factors, is fueling a surge of Chinese foreign direct investment (FDI) across the region, particularly in the manufacturing sector. These investments not only support China’s efforts to diversify its supply chains but also create opportunities for technology transfer, infrastructure development, and industrial growth in Southeast Asia. This trend is especially evident in the automotive industry, where significant untapped potential exists—such as electric vehicle battery manufacturing in Indonesia and the downstream rubber industry in Thailand.
Indonesia’s Electric Vehicle Ecosystem: A Growing Frontier for Development
With the government’s ambitious goal to populate the road with 2 million electric cars and 13 million electric two-wheelers by 2030, Indonesia still faces a significant challenge, having registered only registered 207,000 units of overall electric vehicles in 2024. To bridge this gap, the government has introduced multiple subsidies and incentives aimed at both consumers and investors to drive the widespread adoption of electric vehicles nationwide. Among foreign electric car manufacturers, several Chinese players like BYD and Wuling quickly captured significant share of the Indonesian EV market by leading the sales in 2024, paving the way for other Chinese electric car manufacturers to enter the market.
Indonesia’s electric vehicle ecosystem remains in its initial stages, presenting many opportunities for new entrants across the value chain, particularly in battery production and charging infrastructure. Abundant with nickel reserves, an important raw material for EV batteries, the country is strategically positioned to develop a robust domestic battery manufacturing industry. Moreover, with China recognized as a global leader in EV infrastructure development, Chinese companies can leverage Indonesia’s government incentives and investment benefits to transfer technology and expertise, helping to build a sustainable EV ecosystem in Indonesia.
Thailand’s Rubber Sector: Expanding Downstream Opportunities with a Sustainability Focus
Having been the global leader in natural rubber export, Thailand is set to maintain its position in 2025, capturing 40% of the global market share with 4.25 million tons shipped. Approximately 65% of these exports consist of low-value intermediate products, such as block and mixed rubber. In contrast, higher-value downstream products like tires and gloves predominantly involve foreign-invested producers, especially Chinese companies relocating their production to Thailand in light of 2009 US tariff on Chinese tires. These dynamics suggest strong potential for growth in Thailand’s downstream rubber industry, further supported by the government’s longstanding openness to Chinese investments.
Thailand is also well-positioned to address the rising demand for sustainability-compliant rubber products, driven by government initiatives such as the launch of Digital Platform (Thai Rubber Trade) which features blockchain-based traceability and compliance with the European Union’s forthcoming Deforestation-Free Regulation (EUDR). Complementing this effort, the government has implemented supply control policies and short-term loans for farmers, showcasing a multi-faceted approach to strengthen the industry’s competitiveness. With global rubber demand rising amid tightening supply and Thailand’s strategic focus on sustainability, Chinese companies investing in the country can gain competitive advantage by aligning with international ESG standards while tapping into the expanding downstream markets. The combination of sustainability initiatives and supportive policies creates a favorable environment for Chinese investors seeking long-term growth in the global rubber value chain.
What’s Next?
These are only some of the exemplars which showcase unlimited two-way business and investment opportunities for players across Southeast Asia and China. The strong trade ties between the regions and local governments’ support enable potential newcomers to maximize these benefits in tapping into new international markets.
As one of the leading providers of knowledge and insights in the region since 2005, Evalueserve has been closely monitoring latest developments across multiple sectors and has supported numerous clients with their business development initiatives through insights.
In the forthcoming installments, we will explore these bidirectional opportunities between China and Southeast Asia in greater depth. Stay tuned for upcoming releases featuring country-specific coverage along with other prominent emerging opportunities from some key markets within Southeast Asia.
