Major companies from China, Taiwan and South Korea would be responsible for nearly half a trillion dollars in outbound investments over the next five years, with a focus on "transformative industries" amid heightened geopolitical tensions, according to senior Citigroup executives.
A global focus was needed for companies to achieve growth and navigate volatility and uncertainties posed by geopolitics and macroeconomic pressures, said Kaleem Rizvi, head of corporate banking for Japan, North Asia and Australia.
"We continue to see significant opportunities despite the various headwinds often discussed," he said. "In times of high volatility, companies must incorporate flexibility into their strategies."
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The US bank estimated the capital expenditure announced by mainland Chinese and Taiwanese companies outside their home markets would be close to US$300 billion over the next five years, with money flowing into technology, artificial intelligence, electric vehicles (EVs) and healthcare.
Citigroup senior executives Kanika Thakur (left) and Kaleem Rizvi say Asian companies are looking at emerging markets amid geopolitical tensions. Photo: Edmond So alt=Citigroup senior executives Kanika Thakur (left) and Kaleem Rizvi say Asian companies are looking at emerging markets amid geopolitical tensions. Photo: Edmond So>
Meanwhile, South Korean companies' investments would be about US$200 billion over the same period. This would flow into markets such as North America, Eastern Europe, Southeast Asia and India into areas like battery manufacturing, EVs, semiconductors and renewables.
"Emerging corridors are developing largely due to supply-chain shifts and capital expenditures in transformative industries such as artificial intelligence, semiconductors and EVs," Rizvi said. "This trend is expected to continue."
Chinese EV makers and automotive supply-chain vendors are at the forefront of diversifying their global supply chains to navigate tariffs and seek growth. Chinese EV makers' plans have been affected after the US raised tariffs on Chinese EVs to 100 per cent from 25 per cent last year and US President Donald Trump has threatened to impose more duties on Chinese goods. The European Union enforced import tariffs of up to 45 per cent on EVs produced in China in October.
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Contemporary Amperex Technology, or CATL, the world's biggest producer of EV batteries, said it would need €4.9 billion (US$5.1 billion) to expand production in Hungary. In December, it unveiled plans to build a factory in northeastern Spain, its third in Europe, where the total investment could top €4 billion.
Chinese EV maker Xpeng aims to double its global presence to 60 markets this year, which is part of its "go-global 2.0 strategy", under which the company plans to enter markets in Europe, Southeast Asia, the Middle East and Africa.
Peers BYD and Geely have announced plans to invest in Brazil, in a bid to localise production in Latin America, as tariffs hinder growth in the US and Europe.
"Businesses are looking at markets that were hitherto not as popular for trade due to the evolution of their business models and slower domestic growth," said Kanika Thakur, Citigroup's head of treasury and trade solutions for Japan, North Asia and Australia. "Emerging corridors such as Latin America, Asean [Association of Southeast Asian Nations] and the Middle East have come into the mix, becoming massive areas of growth."
Companies would be well-positioned in emerging markets with a solid manufacturing base and capacity, as these economies strengthen and purchasing power builds up, Rizvi added.
To tap such potential, the US bank said it would double down on its "national desks" staffed by Chinese, Korean and Japanese-speaking bankers outside their home markets. Citigroup currently has 20 such national desks globally.
"These desks will support client activity in new corridors, supply chains and outbound investments," Rizvi said.
"Volatilities [and] uncertainties are all parts of life," said Thakur. "Chinese corporations, for example, are well-prepared for the geopolitical changes they face, having developed risk management and growth strategies over the last few years."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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