Chinese companies are ramping up investment into Southeast Asia and accelerating digital and green upgrades at home, in order to benefit from the reorganization of global supply chains amid geopolitical uncertainties, according to a new survey by Singapore's United Overseas Bank.

In the UOB Business Outlook Study 2025 (Chinese Mainland Edition), 86 percent of respondents said they plan to expand overseas within three years. Markets within the Association of Southeast Asian Nations emerged as the top choice, with 48 percent of firms identifying the region as a key investment priority. The findings reflect how Chinese enterprises are moving from exploratory market entry to deeper regional integration.

"Chinese firms are no longer just testing foreign waters, they're laying down long-term roots," said Xin Tao, head of wholesale banking at UOB China.

Malaysia, Thailand and Singapore are among the top destinations, supported by strong infrastructure, policy stability and cost advantages, according to the report.

Trade data underscore the pivot. China's two-way trade with ASEAN hit 3.67 trillion yuan ($511.3 billion) in the first half, rising 9.6 percent year-on-year, according to data released by the General Administration of Customs on Monday. Exports surged 14.3 percent on a yearly basis, making ASEAN China's top trading partner for the fifth consecutive year.

"The region's youthful population and growing middle class make ASEAN a dual opportunity, being both a factory and a market," said Suan Teck Kin, executive director of UOB's Global Economics and Markets Research.

The report comes as Chinese firms navigate trade uncertainties with the United States. UOB conducted a follow-up survey in April, finding that while sentiment dipped with the announcement of new US tariffs, firms have largely buffered the impact through digital upgrades, cost controls and geographic diversification.

The 2025 survey covered over 600 Chinese firms, including medium-sized enterprises with 100 million to 4 billion yuan in annual turnover and large enterprises exceeding 4 billion yuan across 12 sectors. The core survey ran from December 2024 to January 2025, with additional fieldwork conducted post-tariff hike.

Despite global volatility, Chinese corporates are continuing to invest. Over 90 percent of firms have adopted digital tools and nearly 80 percent plan to increase digital spending by more than 10 percent this year. Adoption of AI, cloud computing and automation is especially strong in manufacturing and logistics.

On sustainability, more than half of firms have implemented environmental, social and governance (ESG) initiatives, with the industrial and healthcare sectors leading adoption. Key motivations include cost savings, brand image benefits and alignment with multinational client requirements.

Eyeing the business opportunities, UOB became a direct participant in China's Cross-border Interbank Payment System in June, allowing it to offer real-time renminbi clearing and settlement. This move positions the Singapore-based lender as a key conduit for China-ASEAN capital flows and trade settlements.

"As RMB usage expands in international trade, CIPS gives our clients faster, lower-risk payment solutions," said Xin.

lijing2009@chinadaily.com.cn