Dialogue with Dahua Bank China MD Xin Tao: Chinese Enterprises' ASEAN Expansion Enters the "Integration Era"

On March 26, Zhongguancun Development Group, China Galaxy Securities, and Dahua Bank jointly hosted the “ASEAN Innovation Cooperation Development Forum” in Beijing.

This forum, which focuses on digital economy, green technology, and the frontier fields of biomedicine, is not just a simple investment promotion; it is also a microcosm of the restructuring of Chinese enterprises’ southern expansion.

In the past few years, amid the drastic disruptions in the global supply chain, the business trajectory of Chinese enterprises in ASEAN has undergone a thorough self-iteration, with an increasingly clear evolution curve from “goods export” to “capacity transfer,” and then to “ecological co-construction.”

In the early stages of going abroad, it was more of a passive move to avoid trade barriers or a simple pursuit of low-cost production factors;

However, in the current context of anti-globalization undercurrents and geopolitical games, the pace of Chinese enterprises entering Southeast Asia has progressed beyond mere capacity output; companies are no longer satisfied with establishing assembly lines to obtain certificates of origin, but are instead relocating their R&D centers, upstream and downstream supply chains, and even regional operation headquarters.

The form of going abroad is evolving from light asset trial-and-error strategies to systematic heavy asset, long-cycle layouts.

As the business landscape crosses national borders and becomes increasingly large, the resilience and circulation efficiency of the capital chain have become the trump card determining whether enterprises can truly take root in foreign lands.

In unfamiliar regulatory environments and volatile currency markets, the role of the multinational financial system has evolved into a foundational infrastructure connecting domestic parent companies with overseas entities. Whether it is building cross-border funding pools to improve global allocation efficiency, using derivatives to hedge against currency risks between the local currency and the home currency, or assisting enterprises in establishing regional treasury centers, the depth of financial services directly constitutes an invisible moat for multinational companies.

It is based on this evolution of business narrative and the pain points of the capital chain that Dahua Bank and Zhongguancun International officially launched the “Dahua Bank Smart Chain ASEAN Express” project at this forum, aiming to build a more synergistic cross-border innovation ecosystem.

Regarding the practical challenges faced by Chinese enterprises deeply engaged in ASEAN, Wall Street Insights had an exclusive dialogue with Xin Tao, Managing Director of Dahua Bank China, Head of Wholesale Banking, and Branch Manager of the Beijing branch.

In Xin Tao’s view, the core proposition of going abroad has now completely transformed from the physical aspect of “going out” to the systemic level of “integrating in.”

The following is a transcript of the dialogue

Wall Street Insights: In the current wave of industrial chain reshaping, what hot tracks has Dahua Bank observed regarding Chinese enterprises going to ASEAN? What are the core pain points for enterprises in practical implementation?

Xin Tao: Currently, the reshaping of the industrial chain in ASEAN mainly reflects four core economic growth points: first, the AI and digital economy track and high-tech innovation fields; second, new energy vehicles and intelligent manufacturing; third, green energy transformation; fourth, low-carbon infrastructure construction.

The pain points mainly concentrate at both ends: first, external market challenges, primarily arising from increased potential market risks due to geopolitical uncertainties and tariff policy uncertainties; second, the intrinsic integration risks of enterprises.

At present, the issue is no longer about Chinese enterprises “going out”; the greater challenge lies in how to “integrate in.”

Wall Street Insights: Can you elaborate on the specific manifestations of the transition from “going out” to “integrating in”?

Xin Tao: It is mainly reflected in the integration across three dimensions.

The first is the integration of the industrial chain. Nowadays, Chinese enterprises often go abroad as a cohesive full-chain group rather than the early stage of single business going abroad; the second is the integration of products with local markets, with the core being to build the credit of “Made in China” locally; the third is the reconfiguration of investment and financing landscapes, as enterprises going abroad inevitably involve the transfer of capital chains.

For Chinese enterprises to achieve sustainable growth, in addition to technological advantages, there is a need for efficient internal capital management to achieve localized integration.

Wall Street Insights: In the face of these complex multinational challenges, what solutions has Dahua Bank proposed?

Xin Tao: We mainly break the deadlock through four dimensions.

First, we rely on a team of professional industry experts to provide tailored comprehensive financial solutions for different sectors; second, we leverage our network layout, including the integration with the CIPS (Cross-border Interbank Payment System) and coverage of nearly 500 locations in Southeast Asia; third, our service advantage, as we have established “China Desks” in major ASEAN countries, providing one-stop docking services that understand both Chinese and local markets; fourth, our “secret weapon”—the Foreign Direct Investment (FDI) Consulting Department.

Wall Street Insights: In this multilateral model evolution, the internationalization of the renminbi is an important variable that cannot be ignored. From the perspective of actual settlement volume, how receptive are ASEAN enterprises to the renminbi currently? Can you share a specific hedging case?

Xin Tao: In 2018, there were relatively few clients willing to settle in renminbi, while now, a considerable number of clients are able to use it maturely, and some are open to discussions. Relevant data shows that the cross-border transaction volume of renminbi in the ASEAN region accounts for more than 30% of the total goods trade, which fully reflects the important position of renminbi in regional trade.

Taking Malaysia’s durian import business as an example.

In the past, domestic importers and local farmers could only settle in US dollars, and farmers had low acceptance of renminbi. Later, we established a direct connection system between renminbi and ringgit, allowing Chinese importers to pay directly in renminbi, while Malaysian farmers received their payment in local currency, ringgit.

This not only avoided the risk of US dollar fluctuations for both parties, reducing dual exchange costs, but also greatly ensured the profit forecasting and control for farmers. Now, more farmers are gradually accepting renminbi as a currency for exchange.

Wall Street Insights: You mentioned that the full industrial chain transfer has entered a deeper state. Taking new energy vehicles and other tracks as an example, what does this supply chain’s deep layout in ASEAN look like?

Xin Tao: Taking Chinese new energy vehicles as an example, the earliest 1.0 era was simply exporting cars to the Thai market.

In the 2.0 stage, enterprises invested locally to buy land and build factories, but 70% of core equipment and finished products were still manufactured domestically and exported there for assembly, so the supply chain was not complete.

Now in the 3.0 stage, more and more source suppliers are directly moving to Southeast Asia, and the proportion of domestic finished products may drop to twenty or thirty percent, with most production cycles taking place within a purely Southeast Asian environment. Suppliers of main engine factories will settle around their factories, forming localized industrial chain clusters.

Wall Street Insights: The “Dahua Bank Smart Chain ASEAN Express” launched at this forum primarily targets light asset, high-growth technology enterprises. How will this project substantively empower them?

Xin Tao: This is a result based on the strategic cooperation framework between Dahua Bank and Zhongguancun International.

First is the single-point docking, where the Chinese team connects with enterprises in the park, providing one-stop support, so enterprises going to Malaysia do not need to find a new local team; second is the collaboration of the entire industrial chain, where we tailor support for technology and biopharmaceutical companies to help them find local partners or R&D institutions.

In terms of risk hedging, we will provide flagship products like cross-border funding pools; simultaneously, relying on the regional foundation in ASEAN, we will assist enterprises in establishing Regional Treasury Centers (RTC) to coordinate loans, financing, and capital management within the region.

Given the current high cost of dollar financing, we can also offer low-interest financing alternatives that combine renminbi with Southeast Asian local currencies.

Wall Street Insights: Finally, looking ahead, what key plans does Dahua Bank Beijing Branch have in promoting services for the Beijing-Tianjin-Hebei region, especially for sci-tech enterprises?

Xin Tao: The industrial linkage in the Beijing-Tianjin-Hebei region and the construction of the two zones in Beijing have always been a focus of our support for the real economy.

First, cross-regional collaboration, the Beijing branch can closely coordinate with the Tianjin branch; second, we delve into industrial clusters, for example, through the “Smart Chain ASEAN Express,” we not only serve Zhongguancun in Beijing but also deeply bind enterprises within Zhongguancun Group in parks across the country; third, a single point for all services, whether enterprises are in Hebei, Tianjin, or Beijing, they only need to contact one account manager from Dahua Bank to seamlessly achieve cross-regional and cross-border business support.

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