China Exports in the First 5 Months of 2025
Despite a 10% drop in exports to the United States during the first five months of 2025 due to tariff policies, China’s overall exports still rose by 7.2%. This growth highlights a strategic pivot, as the US, once China’s primary market, has been increasingly offset by other regions. Significant investment in Germany’s Hamburg port, for instance, has facilitated an 8% increase in China’s exports to Europe, with a nearly 12% rise to Germany specifically.
Southeast Asia has emerged as China’s second-largest trading region over the past five years, driven by its large population and strategic location. In the first five months of 2025, China’s exports to Southeast Asia reached $3.245 trillion, a 14.3% increase year-on-year. Imports from the region also grew by 2.3% to $1.895 trillion.
Within Southeast Asia, Vietnam, Thailand, and Indonesia saw the strongest export growth from China. Exports to Vietnam surged by 21%, to Thailand by 23.4%, and to Indonesia by 16.6%. While China’s imports from Thailand and Indonesia also increased by 10% and 9.3% respectively, imports from Vietnam to China declined by 4%. This decline is the steepest among China’s major Asian trading partners, contributing to a widening trade surplus favouring China and increasing Vietnam’s economic reliance on its northern neighbour.
Thailand’s Export Turnover To China In 6 Months Of 2025
During January–May 2025, Thailand’s exports to China reached 576,745 million baht, marking a significant 20.26% increase year-on-year. This growth was driven by several key product categories.
The top export products from Thailand to China included:
- Computers, Equipment and Components: accounting for a 17% market share and showing a 20% increase.
- Fruits: with a 15% market share, though experiencing an 18% decrease.
- Wood Products: holding a 10% market share and demonstrating strong growth of 64%.
Beyond these top three, other Thai products that saw robust export growth to China were:
- Copper and Copper Products: with a 3.58% market share, increasing by 23%.
- Aluminum Products: with a 1.77% market share, soaring by 47.84%.
- Wheat Products and Other Processed Food: with a 1.41% market share, showing an impressive 175% increase.
Vietnam’s Export Turnover To China In 6 Months Of 2025
In the context of Vietnamese exports to China, certain commodity groups have demonstrated significant growth, while others have experienced notable declines.
Fastest Growing Commodity Groups (January-May 2025)
- Computers, electronic products and components: Reached $8.2 billion, up 36%. This highlights Vietnam’s growing role in the electronics supply chain.
- Other machinery, equipment, tools and spare parts: Reached $2.3 billion, up 46%. This indicates increasing demand for Vietnamese-made industrial components.
- Rubber: Reached $892.5 million, up 24%.
- Cashew nuts: Reached $525.57 million, up 44.86%.
- Rice: Reached $226 million, up 80%. This substantial increase points to strong demand for Vietnamese rice in the Chinese market.
- Coffee: Reached $129 million, up 24.55%.
- Toys, sports equipment and parts: Reached $76.77 million, up 32%.
Fastest Declining Commodity Groups (January-May 2025)
- Cameras, camcorders and components: Reached $1.7 billion, down 28%.
- Vegetables and fruits: Reached $1.6 billion, down 24%. This decline, particularly in agricultural products, may be attributed to stricter import requirements from China.
- Wood and wood products: Reached $875.8 million, down 16.58%.
- Plastic raw materials: Reached $116 million, down 38.72%.
- Paper and paper products: Reached $94.6 million, down 50%. This severe drop indicates a significant contraction in demand or a shift in supply sources.
Import Turnover From China In The First 6 Months Of 2025 from Vietnam
Vietnam’s imports from China saw a substantial increase in the first six months of 2025, reaching $84.7 billion, a 26.4% rise compared to the same period last year. This makes China Vietnam’s largest import market, accounting for approximately 40% of Vietnam’s total import turnover of $212.2 billion in the first half of the year.
Fastest Growing Import Commodity Groups from China (January-June 2025):
- Computers, electronic products and components: Reached $23.5 billion, up 47%. This signifies China’s crucial role as a supplier of inputs for Vietnam’s thriving electronics manufacturing sector.
- Other machinery, equipment, tools and spare parts: Reached $17.7 billion, up 35.57%. This growth suggests increased investment in Vietnam’s industrial and manufacturing capabilities.
- Plastic products: Reached $3 billion, up 31%.
- Other base metal products: Reached $1.8 billion, up 54%.
- Other base metals: Reached $1.75 billion, up 37.68%.
- Automobile components and spare parts: Reached $969.7 million, up 78%. This considerable increase points to a growing automotive assembly and manufacturing industry in Vietnam.
- Electric wires and cables: Reached $1.48 billion, up 54%.
- Complete automobiles of all kinds: Reached $746 million, up 64%. This robust growth indicates rising demand for imported vehicles in Vietnam.
Fastest Declining Import Commodity Groups from China (January-June 2025):
- Iron and steel of all kinds: Reached $2.8 billion, down 23%. This contraction could be due to increased domestic production or diversification of import sources for these materials.
- Glass and glass products: Reached $446 million, down 22%.
- Animal feed and raw materials: Reached $166 million, down 22%.
- Other means of transport and spare parts: Reached $99.4 million, down 38%. This significant decrease suggests a shift in sourcing or reduced demand in this category.
Global FDI Slows, ASEAN Shines, and Vietnam Becomes a Key Destination
The global foreign direct investment (FDI) landscape is experiencing a significant downturn. According to the World Investment Report 2025, global FDI flows decreased by 2% to $1.3 trillion in 2023 and are projected to fall further by 11% to $1.5 trillion in 2024. The outlook for 2025 remains bleak, driven by escalating trade tensions, geopolitical fragmentation, and persistent economic volatility. This decline is compounded by a 26% drop in international project finance in 2024, particularly impacting emerging markets due to rising capital costs and increased risk perception.
In stark contrast, the ASEAN region has demonstrated remarkable resilience, continuing to attract substantial foreign investment. In 2023, FDI inflows to ASEAN countries reached a record $230 billion, followed by a 10% increase to $225 billion in 2024. This marks the third consecutive year of growth despite the global economic downturn, cementing ASEAN’s position as a key growth pole in the global economy. This stability has attracted strong foreign investment, including from China, which is actively seeking reliable growth opportunities and portfolio diversification away from more volatile markets.
The resilience has drawn significant foreign investment, including from China, which seeks reliable growth opportunities and portfolio diversification away from more volatile markets. China was the third-largest source of FDI in ASEAN in 2023, with investments totalling $17 billion, a nearly 20% year-on-year increase. Chinese investment in ASEAN is on an upward trend, rising from less than $4 billion in 2010.
ASEAN – A Strategic Destination for China’s Foreign Investment
Chinese firms are increasingly expanding their footprint in ASEAN, particularly in digital industries, advanced technology, and manufacturing. This move is driven by a search for new markets, less intense competition than in China, and the benefits of the ASEAN-China Free Trade Area. Notable investments include those in electric vehicles, batteries, and other allied industries, as seen in Malaysia, and electronics in countries like Malaysia and Vietnam.
The “China+1” strategy, where foreign investors diversify supply chains by investing in ASEAN alongside China, has also contributed to this trend. Chinese companies themselves are relocating manufacturing to Southeast Asia to mitigate geopolitical risks and tariff barriers. This dynamic is leading to distributed supply chains across the region, with countries like Vietnam and Indonesia seeing rapid export growth and substantial FDI, particularly in manufacturing.
While China’s overall FDI inflows have seen a significant decline in recent years, reflecting global economic uncertainties and de-risking efforts by some foreign enterprises, its outbound investment, particularly to ASEAN, remains robust. This strategic pivot highlights ASEAN’s growing importance as a key growth pole in the global economy and a crucial destination for Chinese outbound direct investment.
Vietnam’s Growing Appeal in the First Half of 2025
- Vietnam has emerged as a particularly attractive destination for FDI within ASEAN. In the first six months of 2025, Vietnam successfully attracted FDI from 92 countries and territories, totalling $21.495 billion (derived from Singapore’s share and total investment).
- Singapore remains the leading investor, with over $4.6 billion, accounting for more than 21.4% of Vietnam’s total FDI. However, this represents a 24.8% decrease compared to the same period last year.
- South Korea surged into second place, investing over $3 billion, which is nearly 14.3% of the total and double their investment from the same period last year. Notably, South Korea also led in the number of capital adjustments (18.5%) and GVMCP (Government-to-Government, Ministry-to-Ministry, or Company-to-Company) transactions (26.5%).
Other significant partners include China ($2.55 billion), Japan ($2.15 billion), and Malaysia ($1.59 billion). China’s investment in Vietnam notably increased by nearly 50% year-on-year, second only to South Korea in growth rate. Furthermore, China led in the number of new investment projects, accounting for 30.1%, primarily focusing on the processing and manufacturing industry.
Foreign direct investment realized in the first 6 months of 2021-2025 in Vietnam (billion USD)
ASEAN nations are currently navigating a delicate “balancing act” as they contend with intensifying power competition between the United States and China. The goal is to maintain neutrality while simultaneously attracting beneficial investment from both global powers.
One significant challenge for ASEAN is the increasing global scrutiny of China’s outward foreign direct investment (FDI). Recent cases of delayed or blocked Chinese investments in countries like the UK, US, Czech Republic, and Niger highlight a growing trend: host countries are raising concerns about national security, labor violations, or unfair subsidies. This signals that Chinese companies can no longer expect automatic acceptance or an open-door policy in every market, a shift from past practices.
Another pressing economic concern for ASEAN is the substantial influx of cheap goods from China, often facilitated by e-commerce platforms. This surge of affordable imports negatively impacts domestic employment and manufacturing across ASEAN, rendering some local industries virtually uncompetitive. The pressure is particularly severe in sectors where China possesses a significant comparative advantage due to its advanced technological capabilities and large-scale production. A serious risk for ASEAN is the potential for premature deindustrialisation if the region becomes overwhelmed by Chinese imports, thereby hindering the development of nascent domestic industries. This phenomenon has been observed in Indonesia, where industries like textiles have been severely affected, leading to job losses and factory closures. Similarly, Thailand has implemented measures like a 7% VAT on imported goods below $40 to curb the influx of cheap imports and protect local manufacturers. Vietnam is also seeing a massive volume of small-value orders from China via e-commerce platforms, prompting authorities to consider removing VAT exemptions to prevent tax loss and safeguard domestic producers.
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