Evaluating China's Agricultural Investment in ASEAN: Location, Trends, and Economic Impact

Xue Ye, Sobri Don Mohd and S. A. Ferdous Alam A.

Research on World Agricultural Economy, 2025, vol. 6, issue 3

Abstract: This study investigates the spatial distribution, temporal trends, and economic effects of China’s agricultural investments in ASEAN countries using a combined approach of panel-data regression and case-study analysis. Drawing on investment and output data from 2010 to 2020 across six major recipient countries, we first estimate a fixed-effects model to quantify the impact of Chinese capital flows on local agricultural output while controlling for GDP, labor inputs, and technology spending. The regression results indicate that each additional $1 million in Chinese investment is associated with an average increase of $2.35 million in recipient-country agricultural output (p < 0.01). However, investment remains heavily concentrated in Vietnam, Cambodia, and Laos, whereas larger markets such as Indonesia, the Philippines, and Malaysia receive comparatively little funding despite offering high marginal returns. To illustrate practical mechanisms, we present two case studies: the China–Cambodia Modern Agriculture Industrial Park, which integrates production, processing, and technology transfer, and a China–Philippines rice-farming project focused on resource extraction. The former yields substantially greater income gains for local farmers and accelerates technology diffusion. Based on these findings, we recommend a strategic pivot toward geographically diversified investments, emphasizing under-invested but high-potential markets; enhanced value-chain integration to raise product value; increased spending on agricultural technology—whose coefficient of 4.20 suggests strong productivity gains from each $1 million invested—and strengthened infrastructure and green-agriculture initiatives. These targeted policies aim to balance economic efficiency with long-term sustainability across the ASEAN region.

Keywords: Community/Rural/Urban; Development (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:reowae:412784

DOI: 10.22004/ag.econ.412784

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