The slowdown in China’s economic growth will heighten interest in Southeast Asia, beginning gradually over the next several years. The 10 countries in the Association of Southeast Asia Nations (ASEAN) -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (also known as Burma), the Philippines, Singapore, Thailand and Vietnam – now offer, as a region, some of the same kinds of opportunities for U.S. private equity investors and strategic buyers that China has over the last 20 years. (Don't forget to check out As China's Economy Falters, Southeast Asia Attracts Dealmakers.)

ASEAN countries offer low-cost manufacturing facilities, inexpensive labor and a growing domestic market. The region includes five of the top 25 countries as measured by GDP, and 65 percent of the combined 625 million people there are younger than 35. China’s labor costs have risen lately, particularly in coastal areas of the country. Vietnam, the Philippines and Malaysia are starting to win manufacturing contracts that used to go to China for items that are not high value-added. Labor-intensive manufacturing, such as for textiles, will emerge in Vietnam and Cambodia.

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