As economic ties continue to deepen, Chinese companies are expanding their presence in ASEAN countries beyond exports, moving into investment, local production, technological cooperation and regional operations.

China and ASEAN have been each other's largest trading partners for several consecutive years. In the first half of 2026, bilateral trade reached 4.34 trillion yuan (about $643.44 billion), an increase of 18.2% year on year.

However, ASEAN is far from a homogeneous market, with member states differing in development priorities, industrial strengths and policy approaches. For Chinese companies expanding across the region, the key question is how to navigate these differences and turn them into opportunities for more effective regional cooperation.

In a recent interview with Bridging News, Kat W. Wong, executive director at the Center for Advanced Studies and Research Malaysia, proposed the concept of "ASEAN Synergy." She said ASEAN countries share many similarities, but each has its own priorities. If they compete for the same industries, investments and projects, competition within the region is inevitable.

A more effective approach, she said, is to identify complementary roles across countries. Two or three countries, for example, could collaborate in the same industry, each contributing to different parts of the value chain and sharing resources and processes.

Cross-border energy cooperation offers one example. Laos provides electricity, Thailand and Malaysia connect regional power grids, and Singapore provides market demand. Each country plays a different role based on its own strengths. In January 2026, power authorities from Laos, Thailand and Malaysia signed a second-phase transmission agreement to further advance the four-country power trading arrangement.

For Chinese companies, investing in one ASEAN country does not have to mean operating in a single market. It can also provide access to resources, production and markets across the region, allowing companies to participate more deeply in ASEAN value chains.

Malaysia offers a case in point. Huang said the country's multilingual, multiethnic society and open market are among its key attractions for international investors. But Malaysia is looking for more than capital and projects. Foreign investment, she said, should also bring technology, expertise and spillover benefits to local industries.

The numbers underline the importance of foreign investment. In 2025, Malaysia approved 207.1 billion Malaysian ringgits ($50.65 billion) in foreign investment, accounting for 48.5% of total investment. China was the country's second-largest source of foreign investment.

The partnership between China's Geely and Malaysian automaker Proton shows how foreign investment can support the local economy. Since Geely acquired a stake in Proton, the companies have cooperated on vehicle and technology development, intellectual property, local parts production and supplier participation. The partnership raised local content in some Proton models to 82%, Malaysian Minister Datuk Seri Johari Abdul Ghani told local media outlet The Star.

Huang said China's advances in areas such as artificial intelligence could also benefit Malaysia. AI is already being used in demand forecasting, production planning, order management and logistics, helping businesses improve efficiency. But she stressed that cooperation should go beyond technology transfer. Malaysia ultimately needs to build its own technological and innovation capabilities.

She sees further opportunities for China and Malaysia to cooperate in AI, local innovation and talent development. Technical and vocational education and training, or TVET, could play an important role by promoting knowledge exchange, skills training and greater participation of local talent in industrial development.

This shift from market entry to joint technology and capacity building is gaining momentum in China-Malaysia cooperation, and China's southwestern Chongqing Municipality can offer a vivid example.

Chongqing-based Zonsen, a major Chinese industrial manufacturing company, has strengthened market and industrial cooperation with Malaysian partners, while the Harbin Institute of Technology's Chongqing Research Institute has worked with Malaysian universities in areas including AI and intelligent manufacturing.

Huang said Chongqing has strong capabilities in efficient, large-scale manufacturing, while Malaysia seeks to add more value to products and services and is well positioned to connect with markets across Southeast Asia. Their complementarity therefore goes beyond a simple model of "made in Chongqing, sold in Malaysia." It could extend across manufacturing, technology, talent, services and regional markets.

(Report by Huxin Luo, Junxiang Zeng, Yuan Dai, Sang Jian)