Deloitte walks you into ASEAN via the Belt and Road Initiative

On March 14, Deloitte Southeast Asia (SEA) held the Belt and Road Initiative SEA investment roadshow in Kunming, Yunnan, in cooperation with Yunnan Energy Investment Group (YEIG), with support from Yunnan Press Group and the Department of Commerce of Yunnan Province Representative Office in Singapore. The event brought together representatives of government bodies, research institutions and businesses from Singapore, Indonesia, Malaysia, Thailand, Vietnam, and Yunnan, China. Opening the roadshow were Zhang Hongxia, Deputy Director of Yunnan Department of Commerce, Dr. Ernest Kan, Deloitte SEA Chinese Services Group Leader, and Qiu Lujun, President of YEIG, all of whom stressed the importance of facilitating the Belt and Road Initiative related regional cooperation.

In year 2016, Chinese outbound foreign direct investment towards countries covered by the Belt and Road Initiative reached a stunning US$14.5 bn, of which most went to Singapore, Indonesia, India, Thailand, and Malaysia. "Southeast Asia, with 7% of the world population, boasts rich natural resources, strategic location, a growing middle class, and an impressive treaty network as advantages enabling it to draw in an increasing amount of investments every year," said Dr. Ernest Kan, Deloitte Southeast Asia Chinese Services Group Leader.

Keoy Soo Earn, Deloitte SEA Financial Advisory Services Leader, gave an extensive presentation on the policies and key programs of investment in ASEAN. Throughout the entire region, infrastructure investment opportunities abound. According to figures released by the Asian Development Bank, during the 2010-2020 period, there is a US$1.1 trn worth of demand in infrastructure construction in SEA, with power, road and rail being the top 3 sectors, and Indonesia needing US$450 bn of funding alone.

Representatives from the five SEA countries' government agencies introduced the local investment environments to Chinese businesses present at the event. Kenneth Teo, Regional Director (West China) from IE Singapore, presented Singapore as a gateway to Asia and key logistics and financial hub, and emphasized the country's strong rapport with China. Peggy Huang, Senior Manager at Malaysia IDA, demonstrated Kuala Lumpur's vigor as a center for business innovation and talent. Thomas Darmawan, Chairman of KADIN Indonesia, provided a focused outlook on Indonesia's food and fishery industry. Vu Thi Hai Yen from the Vietnam Chamber of Commerce and Industry overviewed Vietnam's strengths and key industries. Apipong Khunakornbodintr, Director of the Thai Board of Investment Beijing, highlighted Thailand's comparative advantage and its investment promotion policies.

During the roadshow, Deloitte Southeast Asia (SEA) partners/leaders (Singapore, Indonesia, Malaysia, Thailand, Vietnam) and 5 countries’ government agencies also shared their opinion on how to support China (Yunnan) enterprises to walk into SEA through panel discussions.

Also contributing their expertise to the discussion were Zhang Shu, Tax and Legal Partner at Deloitte West China, Tan Yit Loong, Regional and Greater China Director at MayBank, and Joseph He, Partner at WongPartnership LLP, who shared insights respectively from the professional service, financing, and legal perspectives.

"As an economic bloc, ASEAN form a highly attractive market for investors, and is projected to grow into the world's 4th largest economy by the year 2020," said Keoy Soo Earn. "There do exist, however, a series of challenges for investors regarding financing, institutional framework, restrictions on foreign contractors, risk transfer, and tax rules. Deloitte is committed to providing solutions to help Chinese enterprises to tackle these challenges."