With the ongoing tariff war between the US and China, Southeast Asian countries are intensifying their efforts to attract companies planning to move production bases outside China. To attract investment, they are offering tax incentives and other benefits.

Thailand for example is offering preferential measures for companies that relocate factories and other facilities from China. A corporate tax deduction of up to 50 per cent is one of the main pillars of the package. The Philippines is attracting more export-oriented manufacturing foreign direct investments by relaxing rules. Cambodia, with its cheap labor, is increasing its presence as an alternative production base to China for apparel and other products. As one of the least developed countries, Cambodia has an advantage of low tariffs when exporting to the United States and Japan. In Myanmar, more companies that operate in China have been visiting a special economic zone supported by Japan. Myanmar wants to further relax regulations to attract companies that can become partners in its economic development. Moves toward transferring production from China to Southeast Asia are gaining momentum. Southeast Asian nations hope that more production bases will mean more exports to developed countries, which will make up for sluggish exports to China.