Supply Chain Due Diligence in China and Southeast Asia countries

China and Southeast Asian countries like Vietnam and Thailand play pivotal roles in the global supply chain, serving as both a major manufacturing hub and a critical link in the movement of goods, services, and resources worldwide. Amid constantly shifting geopolitical and regulatory landscapes—particularly the growing uncertainties stemming from policies like Trump-era tariffs and the increasingly complex U.S.-China relations—there is a rising need for robust and comprehensive due diligence investigations in the region.

Ensuring regulatory compliance remains a primary driver for conducting due diligence. Companies operating in or with China and Southeast Asian countries face increasing pressure to reassess their supply chains, scrutinize investments, and verify affiliations with local partners, suppliers, clients, and other related entities at all levels of the value chain.

With these, the scope of due diligence on local entities in the region has broadened significantly, extending beyond traditional metrics to address a range of emerging and complex risks. While conventional elements—such as corporate background, registration details, affiliated entities, litigation history, government licenses, and penalties—remain essential, businesses must now integrate additional layers of analysis to navigate the evolving regulatory and business environment in the region, by countries. Key areas of focus include:

• State-Owned Enterprise (SOE) Participation: Evaluating the presence and extent of SOE involvement in a company’s ownership structure, especially in countries like China and Vietnam.

• Military-Related Business: Identifying any links to military or defense-related industries, which may carry significant compliance and reputational risks.

• Sensitive Geographical Areas: Assessing whether operations or affiliations exist in politically sensitive regions such as Xinjiang or Tibet.

• Party Organization Involvement: Understanding the presence and role of Communist Party branches within a business, which may signal added scrutiny or potential influence.

• Government and Social Relationships: Analyzing the political and social networks of key enterprise principals, which can impact operational dynamics and risk exposure.

• Labor practices: Evaluating whether the company treats its workers ethically and fairly.

Access to such information is often restricted and typically available only to entities with a local presence in the region. For example in China, conducting effective due diligence requires having a registered business in the country, a Chinese IP address, Chinese national employees, and field investigation capabilities. Service providers must ensure full compliance with local laws and that all investigative efforts are conducted within the legal boundaries. Non-compliance can result in significant legal consequences and operational disruption.

Unlike some international firms that conduct research remotely and often rely on English-language databases, Grapevine Asia Partners is uniquely positioned in the region. Leveraging local capabilities and on-the-ground expertise, we offer a strategic blend of domestic insight and global perspective—ensuring our clients receive the most accurate and actionable intelligence.

Grapevine Asia Partners is a boutique risk consultancy established by a team of skilled corporate-intelligence research analysts and anti-fraud experts, who collectively have decades of experience in Asia, particularly in Greater China and Southeast Asia. Our firm actively monitors policy changes and regulatory investigations involving multinational companies. Aside from collecting, interpreting, and analyzing up-to-date information from credible sources, Grapevine Asia also supports clients in liaising with law enforcement and regulatory agencies to facilitate case resolution. We have extensive experience in dealing with law enforcement, particularly on matters involving embezzlement, private sector bribery, trade secrets theft, and intellectual property infringement.