In recent years, many companies have turned to diversification as a way to reduce risk and increase returns. Southeast Asia has become a popular destination for diversification, with many companies drawing capital and expertise from China. This trend has been driven by several factors, including the region's strong economic growth, favorable business environment, and proximity to China.
According to a report by the International Monetary Fund (IMF), the U.S-China tensions have created uncertainty in the global economy, leading many companies to seek alternative markets. Southeast Asia has emerged as a prime destination for these companies, with countries like Thailand, Vietnam, India, and Cambodia seeing an increase in shipments to the U.S. this year.
Semiconductor production has also been shifting to Southeast Asia, with Thailand, Vietnam, India, and Cambodia emerging as early winners this year. This trend has been driven by the region's low labor costs, favorable business environment, and proximity to China.