GreenergyDaily

Jul. 31, 2025

State-backed investment banks China International Capital Corp and China Galaxy Securities plan to launch funds worth a total of more than $1 billion in Southeast Asia, seeking to grab a slice of a lucrative market amid a U.S. tariff war.

The move heralds a shift in investment focus for the banks, typically focused on the domestic market, and comes as Beijing encourages its financial champions to support outbound investment and deepen regional economic ties.

Units of CICC and China Galaxy expect to launch the investment funds over the next 1-1/2 years, a top executive and a person with knowledge of the matter told Reuters.

"As the tariff wars continue and Chinese corporates accelerate their 'China plus N' strategy, they seek local expertise in Southeast Asia," said Carol Fong, group chief executive of CGS International, a unit of China Galaxy Securities.

Such regional knowledge will aid efforts to expand in areas such as supply chain and distribution, she added.

CGS is looking to launch next year a private equity fund of up to $1 billion that aims to facilitate investments and capital flows between China and Southeast Asia, Fong added.

The fund will target high-growth sectors such as healthcare, AI, advanced manufacturing, renewable energy and consumer, offering investors exposure to emerging opportunities across both China and Southeast Asia, she said.

"Southeast Asia's huge market and growth potential presents a big opportunity for Chinese firms," Fong said.

CICC Capital, the private equity investment arm of CICC, is partnering with government agency Malaysia Digital Economy Corp to set up a fund of size targeted at $100 million, an official of the country's digital ministry told Reuters.