SINGAPORE, Chinese state-backed investment banks China International Capital Corp (CICC) and China Galaxy Securities are planning to roll out investment funds worth over US$1 billion in Southeast Asia, marking a strategic shift towards international markets amid ongoing US-China trade tensions.
Traditionally focused on domestic investments, both institutions are now aligning with Beijing’s broader push to boost outbound investment and strengthen economic ties across the region.
Carol Fong, chief executive of CGS International, a unit of China Galaxy Securities.
According to sources familiar with the matter, subsidiaries of CICC and China Galaxy aim to launch the funds over the next 12 to 18 months.
“As the tariff war continues and Chinese companies adopt a ‘China plus N’ strategy, they’re increasingly looking for local expertise in Southeast Asia,” said Carol Fong, CEO of CGS International, a unit under China Galaxy Securities. This regional knowledge, she added, will support Chinese firms in areas like supply chain expansion and distribution.
The ‘China plus N’ strategy involves diversifying supply chains and operations beyond China to mitigate geopolitical risks.
CGS International is preparing to launch a private equity fund of up to US$1 billion in 2026 to drive capital flows between China and Southeast Asia. The fund will focus on high-growth industries such as healthcare, artificial intelligence, advanced manufacturing, renewable energy, and consumer sectors.
The move also reflects China’s broader efforts to enhance regional integration in response to US trade measures introduced since 2018. Despite a partial tariff pause agreed in May, Southeast Asia—home to over 650 million people—continues to attract growing interest from Chinese companies seeking expansion.
“Southeast Asia’s size and growth potential offer major opportunities for Chinese firms,” said Fong.
In addition, CICC Capital, the private equity arm of CICC, is partnering with Malaysia Digital Economy Corporation (MDEC) to launch a US$100 million fund targeting Malaysia’s gaming industry, a digital ministry official told Reuters.
Separately, CGS International is collaborating with Fullgoal Asset Management Hong Kong and Bursa Malaysia to facilitate the listing of foreign-underlying ETFs in Malaysia, especially those offering China market exposure. The first listings are expected in 12 to 18 months, pending regulatory approval.
China remains Southeast Asia’s largest trading partner, with bilateral trade growing 12% year-on-year to reach US$982 billion in 2024, according to Chinese customs data.
Earlier this week, Malaysia’s digital ministry confirmed RM2.97 billion (US$702 million) in investments from major Chinese tech firms. These funds will support AI development, next-gen digital infrastructure, and the creation of 6,800 skilled digital jobs.
