Singapore - Southeast Asia’s green economy is set to surge, with new energy vehicles, renewable power, and green infrastructure leading the charge, according to China Securities' 2025 Southeast Asia Industry Development Investment Report. The growth is expected to fuel opportunities in EV deep processing, solar energy, advanced materials, and related equipment manufacturing.

This outlook aligns closely with the newly concluded Version 3.0 upgrade of the China–ASEAN Free Trade Area (CAFTA), which highlights deeper economic cooperation in nine key sectors—including the green economy, integrated industrial chains, and the digital economy.

China and ASEAN zoom in on NEVs, e-commerce cooperation

The deeper integration of production and supply chains signals a shift from exporting products to exporting complete industrial and supply chains. The automotive sector is a key example: beyond exporting vehicles, Chinese companies are increasingly relocating assembly, components, and supporting services to Southeast Asia, establishing a full industrial ecosystem abroad. Other sectors, such as electronics and lithium batteries, are expected to follow suit with value chain integration and strategic partnerships.

At the launch ceremony of Changan Rayong Factory, Zhu Huarong, Chairman of Changan, reaffirmed the company's commitment to its "In Thailand, For Thailand" strategy. (Photo/Changan)

NEVs have emerged as a key industry that bridges the green economy with supply chain integration. Covering everything from vehicle production and core components to R&D and after-sales services, the investment of the NEV sector in ASEAN reflects new directions of version 3.0.

At the 2025 Land-Sea Economic Forum, Guan Xin, Vice President of Changan Auto Southeast Asia, stated that ASEAN is a key market for Chinese automakers. As the global influence grows, Chinese carmakers are shifting from merely exporting products to exporting entire industrial ecosystems, capital, and technology, driving overseas plant expansion, Guan said.

In May, Changan Automobile, a new central state-owned automaker in China, launched its first overseas New Energy Vehicle (NEV) manufacturing plant in Rayong, Thailand. For Changan, this marks a shift from exporting simple products to exporting the entire industrial ecosystem.

According to the Chairman of Changan, Zhu Huarong, Changan plans to invest 30 billion Baht (approx. USD 900 million) in Thailand, encompassing vehicle manufacturing, R&D, and local services. The company will also introduce its ecosystem of suppliers to help transform Thailand’s automotive sector toward green and intelligent mobility. Changan also aims to make Thailand a strategic hub for the Southeast Asian market.

Chinese automakers still face challenges in the global expansion of the industry, including trade barriers, brand trust issues, and tech export difficulties. Guan suggests addressing these issues through improved quality standards, localized marketing, enhanced after-sales service, and deeper investment in NEV technology, supply chain coordination, and ecosystem innovation.

The digital economy, another major pillar of Version 3.0, also presents vast business potential. The report highlights potential areas of cooperation, including cross-border payments and digital finance. Future collaborative projects may involve payment solutions and scenario-based applications of "AI+" technologies.

Li Mi, Chief of Staff and CMO of Advance Intelligence Group, highlighted at the 2025 Land-Sea Economic Forum the tremendous e-commerce potential in Southeast Asia, where the majority of consumers fall between the ages of 18 and 34 and rely heavily on mobile platforms for online shopping.

However, she also pointed out that the region's online payment infrastructure lags behind the rapid growth of e-commerce, creating untapped market potential for companies in digital payments and fintech.

Given Southeast Asia’s diverse nations and complex cultural and religious landscapes, Daniel Chua, Head of Commercial, SEA at World First, Ant International, emphasized the need for strong localization strategies. He urged mobile payment providers to tailor their offerings to meet the distinct needs of consumers in different Southeast Asian countries, taking into account their complicated cultural backgrounds and market preferences.

Steady growth, mild inflation set China and ASEAN apart

A stable trade foundation continues to underpin deeper China-ASEAN collaboration. According to the General Administration of Customs of the PRC, in the first five months of 2025, ASEAN remained China’s largest trading partner, with bilateral trade reaching 3.02 trillion yuan (421 billion USD), up 9.1% year-on-year. Exports to ASEAN totaled 1.9 trillion yuan (up 13.5%), while imports stood at 1.12 trillion yuan (up 2.3%).

The report said that, in 2023, Chinese investment in ASEAN was concentrated in four sectors: manufacturing, wholesale and retail, leasing and business services, and utilities. Singapore, Indonesia, Vietnam, and Thailand were the top investment destinations. Singapore alone attracted USD 13.1 billion in Chinese investment—up 57.9%—spanning both manufacturing and modern services.

ASEAN’s industrial strengths complement China’s capabilities. Singapore leads in finance, electronics, biomedicine, precision engineering, and high-end services. Thailand boasts mature industries in automotive assembly, food processing, and petrochemicals. Vietnam excels in electronics, mobile devices, and textiles, while Indonesia maintains robust traditional manufacturing in machinery, food, and rubber processing. These sectors offer fertile ground for the expansion of Chinese businesses.

Raffles City, a landmark complex resulting from cooperation between Chongqing and Singapore, is located at the Chaotianmen Wharf in southwest China's Chongqing Municipality. (Photo/Shao Feng)

The stable economic performance of China and ASEAN countries also provides crucial macro-level support for deepening China–ASEAN cooperation across various sectors.

According to the report, both China and ASEAN stand out globally for maintaining robust economic growth with moderate inflation, an exception amid mounting global concerns over stagflation. In 2025, China is projected to record a real GDP growth of 5.2% based on 2023 data, with a CPI increase of just 0.2% in 2024, while ASEAN economies are expected to average 4% real GDP growth in 2023, with a 2024 CPI of 2.6%.

Combined, China and ASEAN account for approximately 30.7% of the global labor force and 19.9% of the world’s youth population (aged 0–14), ensuring a strong demographic foundation for sustained cooperation.

Notably, as China emerges as a leading global investor, ASEAN is becoming one of the most attractive destinations for foreign direct investment (FDI). In 2023, China’s direct investment in ASEAN reached USD 25.1 billion, marking a 34.7% year-on-year increase. Singapore received the largest share, amounting to USD 13.1 billion, representing a 57.9% increase from the previous year.