CHINA-ASEAN: REGIONAL INVESTMENT IMPROVES ECONOMIC, CULTURAL TIES

China’s relations with ASEAN member states have made rapid progress, especially in the areas of economic and trade cooperation. Chinese Ministry of Commerce statistics shows that China and ASEAN are close economic and trade partners. For eight consecutive years, China has been ASEAN’s largest trading partner, while ASEAN has been China’s third-largest trading partner for the past six years. Total two-way investment between China and ASEAN has surpassed $185 billion. In the first seven months of 2017, China invested $4.82 billion in ASEAN member countries. China’s total direct investment in ASEAN has reached $76.8 billion. How have China and ASEAN been able to achieve so much?

REGIONAL INTEGRATION

The progress of ChinaASEAN regional economic integration has contributed to the development of economic and trade relations between the two sides. It has, to a large extent, promoted the establishment of bilateral cooperation frameworks and mechanisms, which have rapidly expanded the scale of the cooperation. Conversely, the development of the latter gradually upgrades regional economic integration. In recent years, there have been frequent exchanges of highlevel visits. A dozen ministeriallevel meeting mechanisms and over 20 senior official level cooperation mechanisms have been set up, which has further institutionalized and normalized regional cooperation.

The steady progress made in regional economic integration is inseparable from the building of the ASEAN-China Free Trade Area (ACFTA). In November 2015, China and ASEAN signed the ACFTA Upgrade Protocol, which marked a higher level of cooperation within the framework. ASEAN countries are now pushing forward industrialization and urbanization with strong demand for foreign capital, equipment and technology, while China has advantages in capital, technology and management. Within the framework of the upgraded ACFTA, relevant industries of the two sides can accelerate integration, which will eventually drive the industrial development of relevant ASEAN countries. The effective upgrading of ACFTA will also allow Chinese enterprises greater access to vast markets, convenient terms of trade and a better investment environment in ASEAN, which will vigorously boost bilateral economic cooperation and drive the economic development of both sides. That will help support the twin goals of reaching two-way trade and investment of $1 trillion and $150 billion, respectively, by 2020. From a macro-economic point of view, the effective upgrading of ACFTA will further accelerate the economic integration of the region and contribute to the realization of trade and investment liberalization in the Asia-Pacific region.

It is obvious that ACFTA has promoted the economic development of both China and ASEAN member states. It has expanded trade and investment between the two and promoted the flow of goods, capital and information among countries in the region. ACFTA has driven the development of the regional market and created more wealth which has improved the overall competitiveness of the region and brought tangible benefits to the peoples of the region. Benefiting from ACFTA, trade volume between China and ASEAN reached $452.2 billion in 2016. INFRASTRUCTURE CONSTRUCTION

Infrastructure construction has played an active part in China-ASEAN economic cooperation. In order to promote economic growth and improve the investment environment, ASEAN countries have accelerated their infrastructure construction. Many have worked out action plans on large- and mediumscale projects which will boost their economies.

At the end of 2014, the Indonesian government worked out a medium-term plan for 2015-2019, the key being to speed up largescale infrastructure construction projects in 12 areas in the upcoming five years. The Thai government released its 2014-2022 national transportation infrastructure plan, covering railways, highways, waterways, aviation and urban rail transit, with a total investment of 2.4 trillion baht ($68.5 billion). In terms of these areas of investment, railway projects are the most expensive. The Philippine government released its large-scale infrastructure investment plan in April 2017. According to the plan, from 2017 to 2022, the Philippine government will invest 8.4 trillion pesos ($168 billion) on infrastructure construction. The Singaporean government has also announced an infrastructure investment plan for the next 10 years. According to the plan, the main projects will include building a fifth terminal at Changi Airport, the Tuas Giant Wharf, the Singapore-Kuala Lumpur HighSpeed Railway and a subway system connecting Woodlands and Johor Baru. Vietnam has also attached great importance to infrastructure construction to improve its investment environment. The Vietnamese government estimates that $480 billion will be spent on its infrastructure development by 2020.

In recent years, Chinese technology in high-speed railways, housing and highways has been acknowledged by ASEAN countries. The development strategy of Chinese enterprises has also been accepted by ASEAN countries. That’s why ASEAN countries are ready to cooperate with Chinese enterprises in the planning for their infrastructure development. During this process, Chinese enterprises have achieved their goal of “going global.”