The deepening economic ties between China & Association of Southeast Asian Nations (ASEAN) are expected to be pivotal, as the region seeks to rebound from the Coronavirus Pandemic, Analysts said.
China has been the Largest Trading Partner of the 10 Country Association of Southeast Asian Nations (ASEAN) for the past decade. Last year, ASEAN overtook the European Union to become China’s biggest trading partner.
Trade between ASEAN and China grew seven percent last year, a rare bright spot for ASEAN’s pandemic-battered economies. Electronics contributed a big part, with ASEAN being closely intertwined with China’s supply chains. China was also top or close to it in pledging new direct investment into ASEAN countries as well.
”That (tendency of deeper Sino-ASEAN ties) kept on despite the pandemic and that has continued to accelerate in some ways. The potential that we are having in 2021 is that the recovery phase in China is going to set in and that will increase the FDI, and with it, the trade and investment flows,” said Mohamed Iqbal, deputy president of China-ASEAN Business Association.
There might not have been any big, new Belt & Road announcements, but several key projects have been pushing ahead, with some of them, like Malaysia’s multi-billion dollar East Coast Rail Link, even ahead of schedule.
The Regional Comprehensive Economic Partnership, or RCEP, with 15 member states, signed in November, should further boost prospects for industrial integration and collaboration.
”If they could join hands in exploring some of these members of RCEP such as those which are in the rest of Asia, then I think it could create indeed a new production base and markets for both China and ASEAN countries,” said Oh Ei Sun, Senior Fellow with Singapore Institute of International Affairs.
The eventual easing of travel restrictions should provide a further boost, and it is clear that exports to and foreign investment from China will play a key role in determining how quickly ASEAN economies rebound from the Pandemic.
”This sort of human contact would be very important. So as the pandemic would improve, we hope that such physical contacts would resume so that ASEAN-China Relationship could be further cemented,” Oh Ei Sun said.