While President Trump threatens a trade war with Canada and to buy Greenland, Asia is largely awaiting the President’s focus. China appears to have taken Trump’s tariffs in stride and even encouraged the rest of the world to be “staunch defenders” of globalization. Meanwhile, Asia-watchers struggle to correctly interpret the latest trends for the Asian region. Although it is cliché to cite examples of “friendshoring”, “reshoring”, and the ubiquitous “China+1” strategy, there is indeed plenty of data supporting this trend. In 2024 alone, Malaysia reportedly received investment commitments worth USD 18 billion from four American and one Chinese technology giant. In Vietnam, new foreign investments in 2024 from mainland Chinese and Hong Kong companies alone totaled USD 5.1 billion.
Yet, some pundits suggest that Beijing has adroitly acquiesced to decoupling with the West in a way that guides existing investment away from India and towards countries it considers aligned with its goals, such as Hungary, Morocco, and Indonesia. There are some indications that India won’t be able to replace China as a manufacturing hub. India recently allowed a USD 23 billion program designed to attract manufacturing from China to lapse due to disappointing results. Some companies under the scheme failed to launch production, with participants overall reaching only 37% of the target set by Prime Minister Narendra Modi’s government.
Deciphering the latest trends in technology has also not been easy. As Deepseek was upending what the world thought it knew about AI, it became entangled in allegations that it had copied ChatGPT’s technology. China continues to make inroads with its EV technology, and yet numerous countries, including Canada, the US, and Brazil, and many across Europe, have levied tariffs on Chinese EV imports.
Unsurprisingly, the onset of the trade war has also affected global talent recruitment and professional services firms. While DOGE has been cutting investment by the US government in universities, China has been aggressively recruiting scientists. Law firms have also been affected: a Hong Kong capital markets' lawyer told the Financial Times in March 2025 that Chinese securities issuers are considering Chinese law firms for IPOs in Hong Kong, while some international firms appear to be retrenching. The proportion of new listings in Hong Kong in 2024 that engaged Chinese mainland law firms as the lead advisers has increased to 20%. Yet, bucking this trend, Japanese firms appear to be eyeing growth opportunities in Hong Kong.
Analysts are not the only ones perplexed by the new international order. Senior politicians in Asia appear equally puzzled. When meeting his counterparts from China and South Korea, Japanese Foreign Minister Takeshi Iwaya said, “Given the increasingly severe international situation, I believe we may truly be at a turning point in history.” A Trump-Xi summit is in the works, and that will bring greater clarity for businesses operating in the Asian region, or so we hope.
FT Reports "Western firms scale back presence in Hong Kong and China as financial activity slows", but is it a trend?
