Love thy neighbour: South-East Asia's China problem

爱邻如己:东南亚的“中国问题”

Money Talks from The Economist

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2025-03-28

41 分钟
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South-East Asian countries are experiencing a new influx of cheap Chinese goods, pushing down prices and pressuring the region's domestic companies. And it's not just low-end goods like textiles or furniture, China has also become a powerhouse in advanced manufacturing. Some of these products, like EVs and legacy chips, are the same industries that South-East Asian countries have set their own sights on as engines of growth. So how can South-East Asia hold its own, in the face of the Chinese manufacturing juggernaut? Hosts: Mike Bird and Ethan Wu. Guests: Burin Adulwattana from Kasikorn Bank, a Thai commercial lender; and the Asia Society's Brendan Kelly Transcripts of our podcasts are available via economist.com/podcasts. Listen to what matters most, from global politics and business to science and technology—subscribe to Economist Podcasts+.
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  • The Economist. This is an Indonesian textile worker on the national evening news lamenting the closure of his factory and the loss of his job.

  • He's among nearly 11,000 people who were laid off when Sretex,

  • the country's largest listed textile firm, ceased all operations on March 1st.

  • The company, once a key supplier for NATO and the German army,

  • had been a cornerstone of Indonesia's industrial sector for nearly six decades.

  • Sretex supplied big global brands like Uniqlo and H&M before its collapse.

  • And just five years ago,

  • the firm took nearly $1.3 billion in sales and posted a net profit of $85 million.

  • Failure didn't come out of the blue.

  • Sretex had taken on a lot of debt.

  • and was badly hit by the pandemic.

  • But the nail in the coffin seems to have been the deluge of cheap textile imports from China,

  • flooding the market and driving down prices.

  • The shutdown signals a significant shift in Indonesia's manufacturing landscape,

  • raising concerns over the future of the country's textile sector.

  • And it's not just in Indonesia.

  • The export-based economies of Southeast Asia are all being affected by the economic policies of their giant neighbor.

  • And it's not limited to the lower-end manufacturing industries either.

  • Here's Xi Jinping in his latest New Year's message to the Chinese people.

  • We have fostered new quality productive forces, he says,