ASEAN business opportunities

Editor's Note: ASEAN countries are hosting the ASEAN Summit and the East Asia Cooperation Leaders' Meetings in Cambodia, the G20 Leaders' Summit in Indonesia, and the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting in Thailand. At the time of "Asia's moment in global governance", ASEAN countries' relatively good economic performance has also attracted international attention. Why is Southeast Asia doing so well when the global economy is being affected by COVID-19, the Russia-Ukraine conflict, soaring energy prices and inflation? According to a survey conducted by Global Times journalists in Indonesia, Thailand and the Philippines, this is not only because of ASEAN countries' own strengths and potential, but also because of their long-term cooperation with China and the Regional Comprehensive Economic Partnership (RCEP), which has been in effect for almost a year.

Dividends help Southeast Asia take Off

The Asian Development Bank, based in Manila, Philippines, says Southeast Asia is experiencing "more dynamic growth" as the global economy slows. Asean countries as a whole will grow by 4.9 per cent this year and 5.2 per cent next year. There is no doubt that with a total area of about 4.49 million square kilometers and a combined population of more than 660 million, the ten ASEAN countries have become one of the few bright spots in the global economy.

"The Philippines is just a microcosm of Southeast Asian economies that are being viewed favorably, and there are many reasons behind this." Ana Malindog, a Philippine expert on international relations, told the Global Times. She analyzed that the first is that ASEAN countries generally have a demographic dividend. Second, the dividend of natural resources. The Philippines has the third largest gold reserves in the world and the largest copper and nickel reserves. Third, many new projects have been built in recent years, laying the foundation for this round of relatively impressive economic development. Fourth, it has something to do with the international environment. In particular, since the Trump administration launched a trade war with China in 2018, multinational companies from the US and Europe have moved part of their manufacturing to Southeast Asia, benefiting the ASEAN economy. Finally, it is inseparable from the "dividends" brought by Chinese investment. Data show that China's direct investment in Southeast Asian countries in 2020 was $16 billion, which is equivalent to the European Union and the United States combined.

"As the world's second largest economy, China has greatly boosted international trade growth, and maritime connectivity is the backbone of global trade growth and reform," Fazila, who used to work for the Brunei Port Authority, told the Global Times. The port of Morra, which we built in cooperation with Chinese companies, is the best choice. Chinese companies bring advanced technology and management experience, and the port development ideas are in line with Brunei's. The cooperation between the two sides has promoted Brunei's economic development and contributed to the realization of Brunei's Ambition 2035."

Working and living in Southeast Asia, it's not hard to see the impact of China on local economies, societies and lives. For example, LAZADA and SHOPEE, two of the most popular e-commerce platforms in the Philippines, are backed by Chinese Internet giants, and more than half of the "overseas" goods on these platforms are actually shipped from China. Although the delivery time of cheap Chinese goods is a little longer, it greatly satisfies the needs of the Philippine working class. What is more interesting is that influenced by Chinese e-commerce, these e-commerce platforms often carry out promotional activities such as "Double 11".

RCEP, "the world's largest trading bloc"

This year marks ASEAN's 55th anniversary. The ASEAN Post comments that the RCEP, which has come into force, unites ASEAN countries and key ASEAN partners under a progressive free trade agreement. When a group of ASEAN countries spearheaded the initiative 10 years ago, they could not have imagined the benefits of what Indonesian officials now call "the world's largest trading bloc" in its first year of operation.

Officials from the Trade Negotiation Department of the Thai Ministry of Commerce have said that the RCEP and the infrastructure built by the Belt and Road Initiative will create an "open, transparent, fair and predictable development environment" in the region, lower trade and investment barriers among member countries and promote regional economic growth. Before the RCEP came into effect, Kishore Mahbubani, a scholar of international relations in Singapore, published an article on the website of Foreign Policy magazine entitled "In Asia, China's long-term Plan trumps America's short-term calculation". In his view, if Beijing values ASEAN and the RCEP, while Washington is preoccupied with Australia and AUKUS, then Beijing will win because "the big game is economic, not military".

Is not yet the 'engine' of global growth."

In the eyes of Filipino scholar Anna, Southeast Asia's economic growth rate is impressive, but can not yet be called the "engine" of global economic growth. The main reasons are: the economic size of ASEAN countries is small; Because of its weak scientific and technological innovation capability, it can only passively undertake part of the supply chain of developed economies rather than lead the industrial chain. Capital volume is not large, development mainly depends on external investment. She said that Southeast Asia's economic development still faces some complicated factors, such as political instability in some countries, imperfect infrastructure and insufficient protection of foreign investment. "Countries like the Philippines are heavily affected by climate change, have many environmental concerns, and hold a negative attitude towards some industries," she said.