Iran war energy shock threatens Southeast Asia’s supply chains. A win for China?

The shift is visible in buyer patterns on the exhibition floor, where the number from Europe and the United States appears to have recovered from last year’s levels, according to Chinese exporters, with more inquiries for home appliances, new energy products and consumer electronics.

Liang Qiuyan, overseas market director at Zhixin Electronics, a massage chair exporter, said the shift in buyers was palpable. “From the clients visiting the Canton Fair, we can clearly feel the return of European and US customers”, she said, adding that some were reinforcing their reliance on Chinese supply chains, with “potentially more orders this year”.

The company expects revenue to grow 30 to 40 per cent in 2026, driven mainly by Europe and the United States. Washington’s current tariffs on China have had only a limited impact, she said.

The outlook comes as companies weigh risks in Southeast Asia, a region that has gained manufacturing capacity in recent years as firms pushed to diversify supply chains

away from China. But the region now faces energy supply uncertainty and production risks, prompting some Western buyers to reassess their sourcing strategies and move some orders back to the world’s second-largest economy.