Regional leaders warn that China’s flood of both low‑cost and high‑tech goods is crowding out Southeast Asian manufacturers. Former Indian adviser Arvind Subramanian called the trend a “China squeeze” at an IMF forum in Bangkok, noting that the continent’s traditional “flying geese” climb‑up the value chain is now under pressure.

Malaysia’s MPI Polyester, once a 38,000‑tonne PET producer, shut its plastics line in January, blaming Chinese imports that eroded margins despite anti‑dumping duties. Across ASEAN, China’s trade surplus hit a record $276bn in 2025, with EVs, batteries and solar panels alone reaching $22bn, while cheap shoes and plastics threaten local factories.

Indonesia has seen roughly 60 textile plants close since 2022, and Sritex’s collapse eliminated more than 10,000 jobs. Vietnam’s imports of Chinese electrical machinery rose 43% to $84bn, making the region dependent on Beijing for inputs and finished goods. Policymakers now grapple with curbing imports without alienating a key growth engine.