Compared with the anxiety and pessimism on show at other economic events, the atmosphere at the 2019 Boao Forum for Asia (BFA), held annually in the coastal town in South China’s Hainan Province, was pervaded with an air of optimism over joint efforts to promote multilateralism and bolster free trade against a rising tide of international protectionist sentiment.
Asian countries are an important driver of global economic development. As they are in the same boat, they should increase their level of economic integration, Li Baodong, Secretary General of the BFA, said at the closing ceremony of the event on Friday.
Li said the most thrilling achievement of the forum was the participants’ firm support for multilateralism and globalisation, noting that opening-up, reform, innovation and cooperation were frequent topics of discussion at side events.
In a break from the pessimistic air at the World Economic Forum held in Davos, Switzerland in January, the BFA was filled with hope and confidence concerning participants’ consensus in safeguarding rule-based multilateralism and globalisation, said Chen Fengying, a research fellow at the Beijing-based China Institutes of Contemporary International Relations.
China’s leading efforts to promote equality in development are also boosting confidence, Chen told media on Friday.
Addressing the opening session on Thursday, Chinese Premier Li Keqiang reiterated calls to safeguard the rule-based multilateral trading system and the need for cooperation.
He set deadlines for drafting regulations and rules to support China’s new Foreign Investment Law, while noting that the country will continue to further open up its financial sector.
The premier’s speech again proves that China is fulfilling its promise to further open up backed by real action, Foreign Ministry spokesperson Geng Shuang said at a daily briefing on Friday.
China is taking action to expand mutually beneficial cooperation with other countries and promote free trade and safeguard multilateralism, Geng said.
China will not close the door of opening-up, in fact the door will become more open, Geng said, stressing China’s commitment to further reform to bring more chances and contribution to global economic growth.
Chance for All
For participants, the forum is a chance to seek business opportunities with partners that share strong support for free and open trade. Nearly 100 top corporate executives and 1,000 entrepreneurs were among the 2,000 delegates in attendance, according to the forum’s website.
Ming Maa, president of Singapore-based technology company Grab, who was attending the BFA for the second time, said that he is looking for Chinese partners to cooperate with.
Such cooperation is fueled by the eagerness of Chinese companies to explore the Southeast Asian market in recent years, Ming said.
“It’s a perfect match between Chinese companies’ wonderful technologies and our understanding of local Southeast Asian customers, as we partner together to explore Southeast Asian markets,” he said.
Grab has already partnered with several Chinese companies, such as partnering with a subsidiary of Chinese insurer ZhongAn to create a digital platform to distribute insurance products in Southeast Asia.
“Chinese companies are coming to invest in Southeast Asia because it’s still a relatively safe place compared to many other regions, with the strong economy and controllable debt levels,” Ming said. He added that in the US on the contrary, there is too much leverage.
According to Ming, the fact that Southeast Asia is comparatively neutral about world political friction also benefits outside investors, including those from China.
“I can’t comment about the situation outside Southeast Asia, but within Southeast Asia, we certainly feel the benefits of China’s opening-up policies and call for globalisation. I agree with those calls 200 percent. It’s always better to have cooperation,” he said.
China’s role in the Asian economy is vast, and it is diverse. It does not just lie in construction, roads and ports, Rajith Keerthi Tennakoon, governor of Southern Province in Sri Lanka, which is home to several projects in the Belt and Road Initiative (BRI) including Hambantota Port, said on the sidelines of the BFA.
The openness of China is welcomed by not just Asian countries but also by the whole world, Tennakoon said. “The whole picture of Asia will be changed.”
After signing a currency swap deal worth nearly $30 billion in October 2018, more third-party market cooperation is expected between China and Japan, Hiroshi Nakaso, chairman of the Daiwa Institute of Research and former Deputy Governor of the Bank of Japan (BOJ), said.
“The currency swap between the People’s Bank of China and the BOJ is significant, a very useful backstop. Other cooperation in third countries between the private sectors of Japan and China would be another area we could be further promote. It will take a little while but it will be steadily promoted alongside the better diplomatic relationship,” he said.
Tennakoon expressed his expectation of deeper cooperation between China and Sri Lanka through the BRI. “We estimate that within the next two years, we can increase the number of ships coming to Hambantota [Port] sixfold.”
“Sri Lanka will continue to support the BRI. And this is very encouraging and more and more facilitation has to be done on that. And the two countries are keeping on [with] these agreements. I think we see the future is very bright on the bilateral relationship,” he said.
The forum this year has 2,000 participants from 60 countries and regions. More than 50 sessions were held on topics including the global economic outlook, the BRI and technology innovation.
Facing a rising tide of protectionism in the global market, Asian countries aspire for regional integration more strongly than ever, Chen said.
Compared to the US attitude of blaming others for its development difficulties and causing tension in bilateral cooperation, Asian countries share a will to address global challenges together, analysts said.
More importantly, Asian economies exhibit a greater will to invest, as well as more potential as the middle class rises and urbanisation increases, Chen said.
Southeast Asia has become an attractive destination for foreign direct investment (FDI), according to a report released by the BFA Tuesday.
The report said members of ASEAN have benefited from deeper integration in Asia as intra-regional flows are an important source of FDI. The inflow of FDI increased by 16.8 percent in 2017, said the BFA Progress of Asian Economic Integration Annual Report 2019.