Mainland China firms eye Asian infrastructure projects as path to growth

Asian infrastructure projects are becoming a hot investment destination for mainland companies, flush with cash, looking to expand overseas and avoid domestic overcapacity problems.

Mainland investment will help bridge a huge financing gap facing many Asian countries - from India to Thailand and Indonesia - whose economies are likely to get a boost when their infrastructure networks are developed, observers say.

"We are paying attention to the significant investment and financing opportunities in the Southeast Asia infrastructure market, which is still insufficiently developed," said Sun Bing, an investment project manager at Xian-based Shaanxi Blower, a company that specialises in ventilation, heating and air-conditioning.

"We aim to diversify our business," he said, adding that policy risks and volatile political environments were the firm's main concerns in expanding in the region.

Mainland companies with a wealth of experience in infrastructure building, such as Anhui Conch Cement, those wishing to diversify their business, such as Shaanxi Blower, and state investment agencies sitting on a large pool of funds, are all eyeing the still undeveloped regional market as a path to growth.

"In Southeast Asia, I find Chinese companies tend to focus on the energy, infrastructure and resources sectors," Ignatius Hwang, a managing partner at law firm Squire Patton Boggs Singapore, told the South China Morning Post.