How Asean can ease the birth pains of the multipolar world

 

Power shift: Asean has a big opportunity this week to help usher in the new world order. — Bernama

ON April 2, US President Donald Trump smashed the World Trade Organisation’s system of multilateral trade by announcing the imposition of tariffs, starting at midnight on April 9, on imports from “cheater” countries that were engaging in unfair trade practice. To Trump, a cheater is one that exports more goods to the United States than it imports.

This is nonsensical reasoning. A bilateral trade deficit is not evidence of being “cheated” because the payment to my barber does not mean that I have been cheated and my salary does not imply that my employer has been bamboozled. This nonsense shows that the tariff war is only marginally related to unfair trade practices. The two key reasons for the tariffs are to increase wages by bringing manufacturing jobs back to America and to cement US primacy in the global order with a show of force.

Tragically, the tariffs will neither revive manufacturing nor preserve US primacy. Tariffs will temporarily expand employment in a few sunset industries, but wages will remain stagnant because productivity growth potential in those sectors is nonexistent.

The immediate response to Trump’s show of force were precipitous collapses in the prices of US stocks and bonds, and the value of the US dollar. Investors recognised that this Great Wall of Tariffs had isolated the US economy, inevitably impoverishing it. Hence, 13 hours after the tariffs came into force, Trump suspended them for every trading partner except China. This climbdown made clear that the real target is China, which the US perceives to be an unfriendly power (eg, being friendly to Iran) that is engaging in unfair trading practices (eg piracy of US technologies).

The economist Adam Smith had anticipated this kind of clash in 1776. He observed that the three centuries of globalisation that began with the discovery of the Americas in 1492 and the discovery of the sea route from Europe to India in 1498 had overwhelmingly benefited Europe because its much greater military might enabled it to pillage instead of trade.

Smith, however, foresaw a reversal: the diffusion of technology through trade would eventually narrow the gap between the two groups. The economic rise of Japan, South Korea, China, and India is ushering in today’s messy transition from a unipolar to a multipolar order.

Asean should be guided by two understandings in navigating this transition.

The first is that the current US-China confrontation stems from their shared recognition that the prevention of war would require an eventual agreement on their respective spheres of influence. We are witnessing a defensive race between them to expand their spheres of influence, which is why the US has asserted its rights over Canada, Greenland, Panama, and Gaza; and China’s nine-dash line in the South China Sea has brought its maritime border to the doorstep of several Asean nations.

States that lock themselves into Washington’s orbit will be under strong pressure to decouple from Chinese technology and to shrink commercial ties with the world’s largest trader – sacrificing not only today’s access to the Chinese market (prospectively, tomorrow’s access to India) and compromising their sovereignty.

The second understanding is that this transition has created systemic dangers that require institutional responses. These new dangers include the Thucydides Trap which is the risk of war between rising and established powers; the Kindleberger Trap where inadequate international cooperation leads to ineffective handling of global disasters like climate change; and the Tragedy of the Commons which identifies the coming collapse of the food chain.

The Cold War 2.0 is causing growing collateral damage to Asean. A viable alternative to membership by Asean states in one of the spheres of influence is for Asean to cooperate with other middle power countries to form a nonpartisan club that functions as a buffer zone between the spheres of influence.

It is crucial for this club to achieve critical mass quickly – being big enough in population and GDP to earn begrudging acceptance by Washington, Beijing, and Moscow for its right to remain a neutral force. To achieve critical mass quickly, the founding group of countries must be kept to a manageable number to ease negotiations.

Asean must avoid instinctively shaping a Global South response like convening a new Bandung Conference (which brought together 29 newly independent Asian and African countries in 1955). The goal is not to accentuate class warfare at the international level but to maintain economic globalisation, world peace, and environmental sustainability.

To achieve critical mass quickly, this club must also bridge the Global South and the Global North. After establishing deep cooperation among Asean, Japan and South Korea (thereby setting the tone of North-South cooperation), this Asian grouping should propose to the European Union and United Kingdom the formation of the Atlantic-Pacific Sustainability Partnership (APSP).

The APSP would serve three core functions: (a) defend economic globalisation with a free trade area based on open regionalism; (b) defend global peace and environmental sustainability with a sustainability caucus to reduce tensions among major powers and coordinate actions on common challenges like pandemics; and (c) defend mutual aid with a development assistance agency guided by the 17 United Nation’s Sustainable Development Goals (SDGs) to counterbalance the use of development aid by major powers as a means of political influence.

Given the accelerated growth of Asean under this new system, the economic weight of the APSP would be more than twice that of China or the US by 2045, making it necessary for US and China to join the APSP to avoid defeat through self-marginalisation.

When this happens, the APSP would have crowded out Cold War 2.0 with cooperative multilateralism.- by  Prof Datuk Dr Woo Wing Thye

Renowned economist Prof Datuk Dr Woo Wing Thye is a visiting professor at Universiti Malaya and research professor at Sunway University. He is also Professor Emeritus of Economics at the University of California, Davis; University Chair Professor at Liaoning University; and Distinguished Fellow at the Penang Institute. 

The views expressed here are solely the writer’s own.

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Appreciating Asean

 

Regional togetherness: Asean’s first summits were irregular and distantly spaced. Now two summits are held regularly every year. — Bernama

Asean is a realities-grounded institution with certain strengths, which are hidden only to those who fail to appreciate them.

AS regional summits go, Asean’s has been growing by leaps and bounds. Not that this positive attribute is universally acknowledged, as is typical with Asean attributes.

Asean’s first summits were irregular and distantly spaced, and at one point even 12 years apart. Now two summits are held regularly every year, either together or spaced apart by months, with related Asean-led meetings in series.

Between summits, several hundred meetings of Asean officials are held each year to implement, oversee, and calibrate policies. The numerous meetings have prompted a misperception that Asean is merely a talkshop. 

Asean’s irregular summits proved that Asean leaders meet only when needed, as circumstances require, and not for the sake of meeting. Asean has never prioritised form over function, or ceremony over substance.

Asean is popular and successful for the common familiarity and shared comfort level leaders feel when they meet. These come only with frequent meetings forming a seamless web of mutual and reciprocal goodwill.

Critics cite the failure of the 2012 Asean Foreign Ministers’ meeting in Cambodia to issue a joint communiqué at its conclusion as a sign of weakness and inefficacy. But it takes decisiveness to opt not to issue a statement rather than produce a bland and meaningless one just for the sake of doing so.

Formal meetings are judged by how or whether they serve their purpose while in session, not by the feel good diplomatic summaries issued afterwards. As a process, Asean proceedings have seldom if ever been “full glasses”, but the uninitiated would see the “glasses” only as half-empty.

Asean’s core purpose has always been the quality of membership relations. How others see it is up to them, but this is no more than a concern for Asean’s public relations department if there is one.

Laos’ Asean chairmanship this year and its hosting of the 44th and 45th Summit over the week have predictably been scrutinised critically. A typical complaint is the seeming absence of any definitive resolution on the Myanmar impasse or the South China Sea disputes.

No annual summit is like a task force producing fail-safe solutions for outstanding issues. A small and underdeveloped Laos is already doing its best tackling the mammoth logistical and financial demands of hosting a series of international conferences at the highest official levels.

Any other country chairing Asean this year would face the same challenges. Asean makes no judgment about the economic status of members while helping less endowed members fulfil their financial obligations.

Asean is better at avoiding upheavals like Myanmar’s or war-torn Cambodia’s before its 1999 membership, than in conclusively resolving conflict that has occurred. It’s still not perfect, of course.

Asean’s record still compares favourably with the European Union’s, which failed to prevent the Kosovo and Ukraine wars. Nato (the North Atlantic Treaty Organisation) as a military alliance may mitigate these conflicts but has instead instigated and amplified the Ukraine war.

The EU and Asean were once described as the world’s most successful regional organisations, in that order, but that was before Brexit, when Britain exited the EU in 2020. No Asean country has sought to leave despite some challenges, while several countries not eligible to join have nonetheless tried.

The next and final member of Asean is Timor-Leste, the former Portuguese territory and Indo-nesian province of East Timor. It is the only sovereign nation in South-East Asia still to join Asean.

Others, from Sri Lanka and Papua New Guinea to Mongolia and Turkey, have reportedly sought Asean membership, but were never seriously considered. Timor-Leste is different not least because it is in South-East Asia, although its Asean journey has been long and challenging.

In 2006 Timor-Leste submitted a “soft application” to join, and the following year Asean signalled a “willingness in principle” to consider it. Most Asean member states endorsed its application, but not all.

Meanwhile Dili worked hard to fulfil membership requirements by acceding to Asean norms and conventions, including the Treaty of Amity and Cooperation in South-East Asia. It even introduced Asean Studies in schools, unlike most Asean countries.

Dili formally applied to join Asean in 2011, and Asean responded in 2022 with an “agreement in principle” to admit it. Membership remains a work in progress, with the Laos Summit during the week a part of that journey.

The state of the South China Sea’s multiple disputes has also been taken as a measure of Asean’s competence. Any catastrophe resulting from the disputes would be of concern to Asean as it would be to anyone else.

However, the disputes are between individual sovereign nations as neighbours and involves less than half the Asean membership. Asean is quietly confident that they can be resolved or are resolvable with time, provided there is no ulterior motive or foreign agenda at play.

Asean understands that the region has managed challenges before and wants that to continue. Anything less will not be Asean, nor will the region be sovereign.

Bunn Nagara is director and senior fellow at the BRI Caucus for Asia-Pacific, and an honorary fellow at the Perak Academy. The views expressed here are solely his own.

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China's 'moment' at ASEAN Summit a wake-up call for US sincerity

Western media have appeared to function under a consistent principle – whenever international affairs are at play, they are framed as a stage for major power rivalry. Unsurprisingly, the just-concluded ASEAN Summit was once again interpreted through the lens of US-China competition. This time, however, what was revealed was not US' diplomatic advantage, but rather its increasingly visible diplomatic predicament.

Recession unlikely for global economy but challenges linger on

 

THE global macroeconomic picture is still more sluggish than investors would have liked, particularly when viewed from the gross domestic product (GDP) growth perspective for the first half of 2023 (1H23), although it remains a stretch to say the world is heading for a recession.

A quick glance across the Causeway to Singapore sees the city-state registering a 0.5% yearon-year (y-o-y) growth rate for the second quarter of the year (2Q23), extending marginally from the 0.4% expansion it charted for the preceding quarter.

Elsewhere, such as in major markets like the United States, China and the eurozone, economists are of the opinion that growth has been sturdy during 1H23 but stiff hurdles still remain on the horizon.

While acknowledging that global GDP growth has been slower so far in 2023 due to several familiar factors such as higher interest rates and elevated cost pressures, newly appointed Bank Negara governor Datuk Abdul Rasheed Ghaffour is also not expecting the global economy to slip into recession.

He says resilient domestic demand in advanced economies is providing sufficient support, while also anticipating worldwide trade to improve towards the end of 2023.

Most notably, he perceives China’s slower-than-expected recovery to have limited impact on Malaysia’s own economic expansion and improvement.

“Malaysia’s economy is well diversified in terms of products, services and trade partners, which would cushion the Chinese impact,” says Abdul Rasheed.

According to Bernard Aw, chief economist at Singapore’s Coface Services South Asia-pacific Pte Ltd, although the global economy has been resilient year-to-date, growth outlook in the second half remains challenging, not the least from increasing signals of weakening Chinese economic activity.

Forecasting global GDP expansion to be at 2.2% y-o-y for 2023, and anticipating a similar growth rate of 2.3% growth for next year, he says: “We expect Asean GDP growth (2023: 4.3%; 2024: 4.6%) to be generally faster than advanced economies – at 4.3% and 4.6% for 2023 and 2024 respectively – as tourism recovery and domestic demand drives economic activity.”

Continuing subdued external demand for the region would imply that domestic demand has to continue to partially offset some of the slack, Aw, tells Starbizweek.

“However, the challenging economic environment worldwide, relatively high inflation and interest rates means that even growth in domestic consumption and investment may fall short of expectations,” Aw opines.

Commenting on the overall global interest rate environment, he believes that the trend of disinflation would continue into 2H23, mainly driven by lower energy prices, coupled with China’s deflation having fed into lower export prices, which has also moderated global price pressures.

On the flipside, Aw thinks underlying inflation will remain fairly sticky, despite not being severe enough necessarily for central banks to revert to hiking rates.

“Having said that, they will likely maintain the current restrictive interest rates for a longer-than-expected period,” he says.

Earlier in July, it was reported that the United States economy had grown 2.4% y-o-y in 2Q23, up from the 2% it posted for the first three months of the year and bringing 1H23 GDP to a commendable 2.2%.

“The improved expansion rate had been driven by consumer spending, on top of increases in non-residential fixed investment, government spending and inventory growth.

At the same time, China had registered a 6.3% 2Q23 y-o-y GDP growth rate, which was also an improvement from the 4.5% charted in the previous quarter.

The acceleration however was slower than the expected 7.3% forecast by economists on a Reuters poll, dragged back by tepid demand and sinking property prices which has sapped consumer confidence.

On the same note, chief executive of Centre for Market Education Carmelo Ferlito feels that China’s post “zero-covid” recovery has been fragile since the beginning.

“The economy is not an engine to be switched on and off, but rather it is a living emergent order.

“As such, China is paying the price to a degree with its severe, nation-wide lockdowns while it was implementing the zero-covid policy,” he says.

The decelerating growth in China, says Ferlito, is evidenced by the People’s Bank of China unexpectedly cutting a range of key interest rates on Tuesday, which is seen as an emergency move to reignite growth after new data showed the economy has decelerated further last month.

With Chinese officials from its National Bureau of Statistics also suspending reports on youth unemployment, he says the move would deprive investors, economists and businesses of another key data point on the declining health of the world’s second-largest economy.

Divulging more numbers, Ferlito says the twin moves of cutting rates and holding back unemployment data from the Chinese government has coincided with new data showing a slowdown in spending growth by consumers and businesses.

“Concurrently, factory output grew much less than expected, adding to a recent raft of worrying signals. For the first time since February, China’s headline measure of unemployment rose, climbing to 5.3%.

“The jobless rate for people ages 16 to 24, meanwhile, had marched steadily higher for six consecutive months to hit a series of record highs, culminating in a reading of 21.3% in June,” he says.

Ferlito says an economic trichotomy is emerging on the global scene, before adding: “The United States is still fighting inflation, but countries like Germany and Holland are starting to experience technical recession, while China is facing challenges of its own.

“It is that post-lockdown crisis that the CME predicted two years ago.”

Echoing Bank Negara governor Abdul Rasheed, he re-emphasises that it is important to look beyond GDP figures, making his case that if the GDP of a country declines because of a cut in impractical government spending, that would be positive for a country.

Conversely, he argues if GDP growth were to accelerate due to an increase in spending financed by debt, it ultimately would be a bane to the government’s coffers and the national economy.

Meanwhile, the International Monetary Fund (IMF) is predicting a 3% GDP global growth rate for this year and the next, receding from the 3.5% achieved in 2022.

It says the rise in central bank policy rates to stave off inflation has continued to weigh on economic activity, but the good news is that global headline inflation is expected to fall from 8.7% last year to 6.8% in 2023 and 5.2% in 2024.

“The recent resolution of the US debt ceiling stand-off and strong action by authorities to contain turbulence in the US and Swiss banking earlier this year reduced the immediate risks of financial sector turmoil. This moderated adverse risks to the outlook,” the IMF says.

However, it cautions that the balance of risks to global growth remains tilted to the downside, as inflation could remain high and even rise if further shocks occur, including those from an escalation of the Russia-ukraine conflict.

Moreover, the IMF warns that China’s recovery could slow further, partly due to unresolved real estate problems, with negative cross-border spillovers.

On the upside, inflation could fall faster than expected, reducing the need for tight monetary policy, and domestic demand could again prove more resilient

• By keith Hiew keith.hsk@thestar.com.my
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Asean nations caught in a quandary over AUKUS Pact

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Power Crunch Is Just the First Step!

 

The entry of the new trilateral defence pact in the asia-pacific region has divided South-East Asian countries and negated the quest for a zone of peace, freedom and neutrality.

AUSTRALIA’S moniker of “deputy sheriff” is back in circulation again with last week’s announcement of the Aukus trilateral military alliance involving the United States, the United Kingdom and Australia.

The agreement, under which the US and the UK would provide Australia the technology to build nuclear-powered submarines for the first time, was declared in a joint virtual press conference by US President Joe Biden, UK Prime Minister Boris Johnson and Australian PM Scott Morrison on Sept 15.

The three Anglo Saxon nations declared that the new deal is meant to protect and defend shared interests in the Indo-pacific amid “regional security concerns which had grown significantly”.

The epithet “deputy sheriff of the US” first gained infamy 22 years ago when then Australian PM John Howard used it in an interview to describe the country’s projected role in regional peacekeeping.

In an interview with The Bulletin magazine, he defined Australia as a medium-sized, economically strong regional power, “acting in a deputy role to the US in maintaining peace”.

He also said Australia had a responsibility within its region to do things “above and beyond”, bringing into play its unique characteristics as a Western country in Asia.

The remarks led to both ridicule at home and diplomatic backlash from regional leaders who rebuked

Australia for taking orders from the United States while being geographically closer to Asia. History repeats itself often, and Australia’s partnership in Aukus has brought the focus back on that lackey image.

Besides drawing indignation from China, which condemned the deal as “extremely irresponsible, narrowminded and severely damaging regional peace”, Aukus – the abbreviation representing the initials of the three countries – has also ruffled feathers within Asean and divided the 10-member grouping.

Based on the reactions over the past few days, two camps have emerged. Malaysia and Indonesia are clearly opposed to it on the grounds that it would unsettle the region. Thailand, a traditional US ally which has a close economic relationship with China, is also of the view that the security pact would undermine stability.

On the opposite side, the Philippines has taken a totally contrary stand. It has declared support, with its foreign minister Teodoro Locsin arguing that Aukus would address the imbalance in the forces available to the Asean member states and that the enhancement of Australia’s military capacity would be beneficial in the long term.

Vietnam, which recently hosted US vice-president Kamala Harris, has not commented on the pact although its spokesperson Le Thi Thu Hang offered this ambiguous response: “All countries strive for the same goal.”

Meanwhile, Singapore Foreign Minister Vivian Balakrishnan has stated that the city state is “not unduly anxious” about the new strategic alliance because of its longstanding relationship with the three countries.

The four other countries in the grouping have been largely silent on the issue.

Malaysia was swift and forthright in making its position clear. Prime Minister Datuk Seri Ismail Sabri Yaakob warned that Aukus would spark a nuclear arms race and provoke other powers to act more aggressively in the region, especially in the South China Sea.

In his phone call to Morrison, he also raised the importance of abiding by existing positions on nuclearpowered submarines operating in Malaysia’s waters, including rules under the United Nations Convention on the Law of the Sea 1982 (UNCLOS) and the Southeast Asian Nuclear-weapon-free Zone Treaty (SEANWFZ).

The questions being asked now are: How will China react to Aukus? Will it intensify the arms technology race in the region by increasing military expenditure for its navy or create more missile launch facilities, also known as underground missile silos, for the storage and launching of intercontinental ballistic missiles (ICBMS)?

That is what is being predicted by the hawks in the US military establishment, who have been consistently exaggerating China’s supposed military threat.

Among the talk is that China would boost the number of missile silos to 100 over the next two decades. For the record, the US already has at least 450 such facilities.

It is no secret that China has been building up its navy although it is still a long way from matching the marine power of the United States or the United Kingdom with just two aircraft carriers and a third still under construction. In comparison, the United States has 11 aircraft carriers and the United Kingdom two, but only one has been commissioned.

The US has 72 submarines – all nuclear-powered – compared with China’s 56, out of which only six are nuclear-powered.

With the entry of this newfangled military pact, Asean nations are now caught in a quandary. The quest for a Zone of Peace, Freedom and Neutrality in South-east Asia (Zopfan) declared on Nov 27, 1971, when the world was in the midst of a Cold War between the US and its Western allies and the USSR, looks like a distant dream today.

Zopfan was mainly aimed at preventing the world’s big powers from competing for influence and military prowess in the region.

The concept was inspired by the UN’S principles of respect for the sovereignty and territorial integrity of all states, abstention from threat or use of force, peaceful settlement of international disputes, equal rights and self-determination, and non-interference in the affairs of member states.

But as Dr Laura Southgate, a specialist in South-east Asian regional security and international relations, highlighted in a recent article in The Diplomat, Aukus has clearly exposed Asean’s lack of cohesion.

As she put it, driven by different threat perceptions and geo-strategic interests, it had become very difficult for Asean member nations to speak with one voice, although many states hope to maintain a balance between China and the US and its allies.

Media consultant M. Veera Pandiyan likes this observation by Niccolò Machiavelli: “Wars begin when you will, but they do not end when you please.” The views expressed here are the writer’s own.

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Malaysia, Asean to benefit most from China’s new economic strategies

Beijing's 14th five-year economic plan and 2035 goal promise a new era of development for China and the greater wealth for the world.

Momentous meeting: China’s top political advisory body wrapped up its annual session recently. — Xinhua

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CHINA’s most important meetings of the year – “Two Sessions” – have unveiled Beijing’s medium- and long-term economic goals and strategies that experts believe will not only boost China’s quality development and modernisation but will also benefit the world, in particular Asean.

As Malaysia is part of the 10-nation Asean, China’s biggest trading partner, it will gain from Beijing’s strategies as long as Putrajaya continues to embrace foreign policies deemed as friendly – or at least non-toxic – towards Beijing.

The “Two Sessions” or Lianghui refers to the annual meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC).

The NPC is the Parliament where laws and policies are adopted, while the CPPCC is the top political consultative body comprising the Communist Party of China (CPC) and other interest groups that provide policy input for the NPC.

At the start of the NPC in Beijing on March 5, Premier Li Keqiang, while unveiling the 14th five- year plan (2021-2025), announced that China had set an economic growth target of more than 6% for 2021 – with emphasis on high-quality development, green economy, modernisation and innovation.

The GDP of China, the first country to be hit by and recover from the Covid-19 pandemic, grew by only 2.3% in 2020. Still, China was the only major economy to post growth last year.

Li also announced that China – the world’s second largest economy in the world – wants to double the size of its economy to 202 trillion yuan (RM128 trillion) in 2035, from 102 trillion yuan (RM64.5 trillion) in 2020.

Over the next five years, Beijing will aim to keep unemployment low, strive for 7% annual growth in research and development spending and forge a new development pattern.

China also aims to become an advanced manufacturing powerhouse by 2025. This involves upgrading its manufacturing capabilities in rare earth, robotics, aircraft engines, new energy vehicles, high-end medical equipment and innovative medicine, aviation, high-speed rail and industrial applications of the BeiDou satellite system.

Ultimately, China wants to reduce reliance on foreign technologies and enhance competitiveness against the United States after being trapped in a long and acrimonious US-initiated trade war.

According to a Xinhua commentary, the CPC wants to lay the foundation to transform China into “a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious and beautiful” by the middle of the 21st century.

To double its GDP, China needs to achieve an average annual growth rate of 4.7-5.0% in the next 15 years, according to estimates of economists.

Prof Justin Lin Yifu, a top economist in planning Beijing’s poverty eradication programmes, projects that China will become a high-income nation by 2025.

The dean at the Institute of New Structural Economics of Peking University told Chinese newspaper Global Times that his optimistic prognosis “is based on China’s complete industrial chain, rich industrial range and advantages in new technologies, including 5G and artificial intelligence”.

Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, told Global Times the five-year plan has taken into account risks and challenges, particularly those posed by the US and its allies that try to contain China’s rise and technology advancement.

Despite challenges ahead, Beijing has demonstrated that it is capable of achieving targets. A good example is shown in the eradication of extreme poverty in 2020, achieved on the back of economic disruption induced by Covid-19.

While China’s economic strategies aim primarily at developing domestic growth, they are seen as benefiting investors and foreign nations.

“Given the size of the Chinese economy and the important role it plays in the global economy, the 14th Plan also offers a bright spot for the global economy in this difficult time, ” Bai Ming, deputy director of the International Market Research Institute, told Global Times.

Indeed, China has contributed about 30% in global economic growth on average over the past 20 years. Within the next five to 10 years, China is expected to contribute 25-30% to global economic growth, says Gobal Times.

Christina Zhu, an economist at Moody’s Analytics, notes that Beijing plans to increase spending on fundamental research by 10.6% this year and encourages manufacturers to invest in research and development by offering greater tax benefits.

“China will further open up its domestic market to foreign businesses and investors. It has lifted restrictions in areas such as high-end manufacturing, new energy and service industries, and has committed to trimming down the negative list and providing a level playing field for foreign enterprises, ” she writes in a note.

Foreign trade stability and growth in foreign investment are critical to China’s ambition for greater connectivity with the world economy, she adds in the note also issued to Sunday Star.

Judging from what China’s Foreign Minister Wang Yi has said, Malaysia and its Asean neighbours can expect to enjoy preferential treatment from China.

Last Sunday, Wang Yi told a press conference: “China is willing to work with Asean to build an even closer community with a shared future and another 30 years of even greater cooperation.

“In the new development stage, China is like an express train with greater driving force and load capacity. China welcomes all countries to get on board and move towards a future of shared prosperity.”

Locally, the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM) sees Asean becoming a strong beneficiary of Beijing’s economic plan and goals.

“With China regaining its strong growth momentum in 2021, its economic strategies will help to support Malaysia and Asean’s economic recovery from the pandemic, ” says Tan Sri Ter Leong Yap, president of ACCCIM.

The trade group sees China as intensifying external connectivity via the Belt and Road Initiative (BRI) of President Xi Jinping to accelerate China’s involvement in international trade.

Touching on Malaysia, ACCCIM notes that China has become Malaysia’s largest trading partner for the 12th consecutive year in 2020, with total trade valued at RM329.8bil or 18.6% of Malaysia’s total trade. Exports to China accounted for 16.2% while imports from China stood at 21.5%.

In 2020, China’s investment in Malaysia jumped 43.8% to RM5.8bil to become Malaysia’s sixth largest foreign investor.

“China’s long-term sustainable economic growth and greater emphasis on quality and technology-driven investment will open up more trade and investment cooperation in the areas that can help Malaysia’s industrial development.

“China’s signature BRI can continue to be a catalyst to spur more China investment to Malaysia and Asean, ” Ter tells Sunday Star.

The growing influence of China on the global stage will boost China-Asean economic cooperation, which can be further cemented by the signing of the 15-member Regional Comprehensive Economic Partnership (RCEP), he adds.

Malaysia’s development focus on IR 4.0, digitalisation, 5-G technology, e-commerce, green investment, renewable energy, electric cars and smart transport infrastructure also means that both nations can work together to foster win-win deals.

Ter opines: “Malaysia can learn a lot from China in high technology, digitalisation, agri-tech and the building of smart and eco-industrial parks.

“We hope that the Prime Minister’s planned visit to China could further strengthen bilateral relations, taking it to a new level of win-win partnership. Both countries have come a long way in deepening trade and investment flows, enhanced connectivity and people-people exchange.”

For Prof Datuk Dr Chin Yew Sin, China’s BRI strategy under its 14th five-year plan could help Beijing achieve its economic targets.

“Between 2013 and 2019, China had signed with 138 counties, including Asean countries, for a total of 790 BRI projects. These overseas BRI projects undertaken by China will help spur the economic growth rate of China by about one per cent annually.

“The BRI projects implemented in Malaysia and other Asean countries will enhance the economic growth rates of these countries also, ” says Dr Chin, adviser for the Global One Belt One Road Association (Asia Pacific Region).

Dr Chin believes China’s demand for Asean’s natural produces and manufactured products will be even greater when it overtakes the US to become the largest economy in the world before 2035.

“By then, Malaysia will be able to export more of its electrical and electronic products, palm oil, rubber, oil and gas, timber products and others to China due to a higher demand of these goods.

“In addition, Malaysia will be able to attract more direct investments from China because of its long-standing good relationship with China, ” he adds.

Malaysia was the first Asean country to establish diplomatic ties with China in 1974 and Beijing has never failed to repeat its gratitude to Malaysian leaders at meetings, Dr Chin notes.

Datuk Keith Li, a mainland Chinese business leader in Malaysia, shares the views of his Malaysian counterparts.

“China will definitely focus more on the Asean market since the bloc is China’s biggest trading partner amid the pandemic. Moreover, China’s current ties with the US, Europe and Australia are tense, ” says Li, president of the China Entrepreneurs’ Association in Malaysia.

He adds: “There will be more to be done when the RCEP is implemented. China is expected to help Malaysia build a high-speed railway, an essential link with other Asean countries” Cambodia, Myanmar, Laos, Thailand and Singapore. This will also facilitate China to enhance economic cooperation with Asean in tourism, trade, logistics and communication.”

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