At the CGS China-ASEAN Business Leaders Summit 2026 in Singapore, regulators, exchange executives, sovereign investors and banking leaders focused on a widening gap. Trade, supply chains and direct investment between China and ASEAN have deepened rapidly, but public-market capital has not developed at the same pace. Cross-border investment channels are expanding, yet institutional investors still need domestic markets with sufficient liquidity, free float, transparency and investable companies. Foreign direct investment into Southeast Asia more than doubled over the decade to 2025, rising from $115 billion to $244 billion, according to Wee Ee Cheong, Deputy Chairman and Chief Executive Officer of United Overseas Bank (UOB). He added that ASEAN accounted for 15% of global FDI flows in 2025. Wee said the relationship is increasingly extending beyond trade into integrated production and investment networks. “Businesses increasingly see ASEAN and China as one ecosystem. They are building supply chains, production networks and customer franchises across both markets, rather than choosing between them.” That integration has not yet been matched in public markets. Ian Chung, Executive Director of the Markets, Infrastructures and Intermediaries Department at the Monetary Authority of Singapore (MAS), put ASEAN public-market capitalisation at more than $3 trillion and said much of the current flow still moves through foreign direct investment and private transactions. Direct investment can finance a factory, infrastructure project or data centre without requiring daily liquidity, while portfolio investors need enough shares available to trade, sufficient turnover, reliable disclosure and a broad enough pool of listed companies to build and exit meaningful positions. The question for China-ASEAN capital markets is therefore not simply how to open more cross-border channels, but whether the markets those channels connect to are investable at institutional scale. Trade moved ahead while public capital lagged Edward Zhang, Executive Managing Director and Head of Private Equity Investment Department III at China Investment Corporation (CIC), said Chinese direct investment into ASEAN continued to deepen, particularly in manufacturing and consumer sectors. He identified information, investment structures and trust as constraints on deeper capital flows. “Transaction-by-transaction relationships are not enough. Long-term cross-border investment requires repeated interaction, institutional dialogue and a pipeline of bankable projects built over time,” Zhang said. Chinese investors still need local knowledge, trusted partners and structures that can operate across several ASEAN markets rather than being rebuilt for each transaction. Iding Pardi, Director of Business Development at the Indonesia Stock Exchange (IDX), drew the distinction more directly. “Economic integration has moved faster than financial integration. Portfolio capital requires something more. It needs liquidity, transparency, market access and trusted financial infrastructure,” he said. Indonesia's economic links with China already extend from the Jakarta-Bandung high-speed railway to industrial parks, nickel processing and electric vehicle batteries. He added that Indonesia's listed market has close to 1,000 companies and more than 31 million domestic investors. Shahrul Amry Abdul Malek, Director of Market Development at the Securities Commission Malaysia, placed domestic market quality alongside cross-border access. “We have two things to do. One is improve connectivity, meaning more channels, more awareness and more products between markets. The second is improving ASEAN's investability itself, in terms of liquidity, transparency and governance,” he said. Investability here means whether a large investor can buy, hold and sell a meaningful position without excessive ownership, trading or regulatory constraints. Easier access alone cannot create larger free float, broader ownership or sustained institutional demand. Singapore and Thailand are expanding routes into listed markets Singapore is strengthening its domestic equity market partly to attract more regional and Chinese capital. MAS expanded its Equity Market Development Programme from SGD 5 billion ($3.9 billion) to SGD 6.5 billion ($5.1 billion) in February 2026, directing capital through asset managers investing in Singapore-listed equities. Chung said the reforms are intended to improve liquidity, reduce friction for issuers and give Chinese investors more reason to consider Singapore as a route into ASEAN opportunities. SGX Group reported that securities daily average value increased 35% year on year to SGD 1.8 billion ($1.4 billion) in fiscal year 2026. Broader liquidity across more listed companies would give Chinese and regional investors greater scope to build and exit meaningful positions beyond a small group of heavily traded securities. Thailand is expanding both market access and the supply of investable companies. Soravis Krairiksh, Senior Executive Vice President and Chief Markets Officer of the Stock Exchange of Thailand (SET), said its depositary receipt programme covers securities from 16 exchanges, with more than 25% of the coverage coming from China and Greater China. He said turnover in the programme had increased 120% year on year. Depositary receipts give Thai investors domestic-market access to foreign shares. SET and Thailand’s Board of Investment have also established a programme aimed at bringing more foreign-invested businesses into the listed market. Chinese companies can build factories and operating businesses in Thailand while remaining private subsidiaries or joint ventures, while listings would convert part of that investment base into securities available to domestic and international investors. Malaysia and Indonesia are strengthening domestic investability Malaysia is intervening earlier in the corporate funding cycle. Shahrul said the Securities Commission plans to broaden retail access to Bursa Malaysia's LEAP Market, a market for smaller growth companies that has been restricted to sophisticated investors, by the end of 2026. He described the approach as a funding escalator, allowing companies to enter public markets earlier and progress towards larger boards or cross-listings as they grow. Malaysia's pipeline in electronics, healthcare and energy transition also gives Chinese investors a wider range of sector-specific opportunities beyond broad market indices. Indonesia is focusing on free float, ownership structure and transparency. Pardi said liquidity depends not only on trading volume but also on free float, ownership concentration, transparency and ease of access, while IDX is pursuing higher minimum free float, more detailed investor classification and stronger governance. “Global capital does not only look for growth. It looks for growth that is investable, liquid and accessible,” he said. MSCI has attached index consequences to those concerns. Its indexes are widely used by global fund managers as portfolio benchmarks. Following concerns about free-float assessment and investability, MSCI froze increases to foreign inclusion factors and the number of shares used for Indonesian securities, while also suspending additions to its investable market indexes and upward migration across size segments. Indonesian authorities have since introduced more detailed shareholder disclosure, measures addressing concentrated ownership and a phased increase in minimum free float to 15%. Chinese capital is already present in Indonesian infrastructure, nickel processing and electric vehicle supply chains, but greater public-market allocation also depends on whether investors can build and trade listed positions at scale. Cross-border links can widen access without deepening liquidity Regulators and exchanges are reducing friction between ASEAN markets and larger pools of Chinese and international capital. HKEX has recognised IDX and the SET, allowing qualifying companies listed on those exchanges to pursue Hong Kong listings through a more streamlined framework. Shahrul said the supporting regulations were already in force when the Securities Commission Malaysia and Hong Kong Securities and Futures Commission signed their memorandum on 23 July, enabling dual IPOs and cross-listings of exchange-traded funds and real estate investment trusts. Abhishek Bakshi, head of ASEAN issuer services at Hong Kong Exchanges and Clearing Limited (HKEX), cited Indonesia as an example. PT Merdeka Gold Resources Tbk completed a secondary listing of depositary receipts on HKEX's Main Board in June 2026 after IDX became a recognised stock exchange. A secondary listing allows an already-listed company to trade on another exchange without moving its primary listing. “What these pathways do is they create platforms that can be tapped into by regional companies on a repetitive basis, not on a one-off basis,” Bakshi said. Bakshi identified liquidity, investor familiarity and regulatory alignment as conditions for mobilising more Greater China portfolio capital into ASEAN companies. Southbound Stock Connect, which allows eligible mainland Chinese investors to buy Hong Kong-listed securities, gives ASEAN issuers another route to Chinese capital. Liquidity, free float and institutional participation in their home markets remain separate constraints. Private capital already offers a parallel route Large institutions already have a parallel route into the China-ASEAN corridor through private capital, even as public markets work on liquidity and investability. The Galaxy Orientis China-ASEAN Investment Platform secured approximately $520 million at its initial close towards a $1 billion target, bringing together CIC, the Indonesia Investment Authority (INA) and the State Oil Fund of Azerbaijan. Laksono W. Widodo, Chief Investment Officer of the INA, said the investment case extends beyond headline economic growth. “Institutional investors do not invest in macroeconomic potential alone. They need well-prepared businesses and assets, capable partners, clear governance, appropriate risk allocation and credible pathways for long-term value creation,” he said. INA has applied that model through investments combining financing with technology, operating expertise, market access and local partners. The China-ASEAN Joint Investment Council complements the platform through research, dialogue and institutional exchange among long-term investors. Private structures already allow large pools of capital to gain China-ASEAN exposure while domestic exchanges continue to improve liquidity and investability. For banks, the channels generate different revenue opportunities. Direct and private investment create financing, project finance, cash management, advisory and transaction activity, while deeper listed markets add underwriting, custody, securities services, investment products and wealth management. More investable domestic markets would extend the banking opportunity beyond financing individual projects. Public markets now need to convert access into scale Pardi said the goal is for investment between China and ASEAN to become as routine as trade between them. “Capital connectivity must catch up with industrial and economic connectivity.” Progress would be reflected in more companies reaching public ownership, wider free float, sustained institutional turnover and securities that remain liquid after listing. Cross-border channels can only carry more capital when the domestic markets behind them have sufficient depth to absorb it. Krairiksh said that within five years he wanted to see more China-ASEAN ETFs, a direct Stock Connect-type arrangement allowing investors to trade eligible securities across Chinese and ASEAN exchanges, and more Chinese-invested companies seeking listings in ASEAN. Banks, regulators, exchanges and asset managers occupy different points along that chain. Financing and private capital can help companies reach listing scale, exchanges can provide routes into public ownership, while research, institutional demand, custody and wealth distribution determine whether those securities remain investable after issuance. China-ASEAN trade and direct investment have already produced companies, assets and pools of capital across the corridor. The remaining public-market opportunity is to turn more of that economic activity into securities that institutional investors can own, trade and hold at scale.
