Recently, the investment frenzy of Chinese enterprises in Indonesia has sparked discussions about Southeast Asia potentially becoming a new generation global manufacturing hub. However, while this trend highlights the potential of the Southeast Asian region, it is still too early to assert that it will become a new global manufacturing center.

Southeast Asia does have certain advantages that make it a potential manufacturing hub. Besides Indonesia, countries like Vietnam and Malaysia have also attracted a large amount of manufacturing investment. The advantages of these countries include lower labor costs, a relatively open business environment, lenient trade policies, and geographical proximity to China. With the continuous influx of foreign investment, the infrastructure and industrial support in Southeast Asia are also continuously improving, creating favorable conditions for the development of manufacturing.

However, Southeast Asian countries still face some challenges in the manufacturing sector. The manufacturing industry in most countries is still concentrated in low value-added segments, and is relatively weak in technology research and development and high-end manufacturing capabilities. In addition, differences in trade rules between countries in the region and insufficient cooperation and coordination also limit the formation of efficient and unified manufacturing clusters.

For Chinese companies, investing in Southeast Asian countries such as Indonesia has multiple strategic significances:

Firstly, this helps to promote the upgrading of domestic industries. By transferring some labor-intensive manufacturing processes to Southeast Asia, Chinese companies can concentrate resources on developing high value-added industries such as semiconductors, artificial intelligence, and high-end equipment manufacturing, thereby optimizing the domestic industrial structure and strengthening their dominant position in the high-end segments of the global supply chain.

Secondly, this initiative is beneficial for expanding the supply chain landscape. By investing in countries like Indonesia, Chinese companies can build a broader regional supply chain network, reducing the trade policy risks from countries like the United States. For example, establishing a nickel mining industry chain in Indonesia can ensure the supply of nickel, stainless steel, and new energy battery materials, consolidating China's position in the global new energy supply chain.

In the end, this investment model promotes complementary cooperation in the supply chain. China and Indonesia each have advantages in the manufacturing sector, and their cooperation can achieve complementary strengths. Indonesia can leverage China's investment and technology to upgrade its manufacturing industry, while China can utilize Indonesia's resources and market to extend the supply chain and radiate globally through the Southeast Asian market. This deep cooperation not only enhances China's influence in the supply chain but also elevates its core coordinating position in the regional supply chain.

Overall, China's investment in Indonesia reflects the evolution of the global manufacturing landscape, but whether Southeast Asia can become a new global manufacturing hub still requires time and further development to verify.