Economic relations between China and the Association of Southeast Asian Nations (ASEAN) have clearly become closer as China is now ASEAN's No. 1 trade partner and ASEAN is China's No 4 trade partner with a possibility to surpass Japan to No 3 soon. Not only in trade, investment by China's private sector and state enterprises in ASEAN countries has grown in a big leap. China now tops the investor list in ASEAN countries like Myanmar, Laos, and Cambodia, while ranking fourth for foreign investment in Thailand.
Regional Economic Trend
It is not a matter of coincidence or regional economic trend but the Chinese Government does intend to tighten economic ties with ASEAN under what I would call a "southward strategy." China began with its serious move southward in the year 2000, when Chinese and ASEAN were then fiercely competing in the world market. The China-ASEAN trade volume was not so big at the time. Then came the day when then Chinese Prime Minister Zhu Rongji wooed ASEAN to form ASEAN-China Free Trade Area (FTA). The Chinese Government has been seriously pushing for the FTA since then. The trade cooperation started with a gradual cut of import tax until the rate became zero in January 2010.
Chinese have paid frequent visits to ASEAN countries to pave the way for an army of Chinese investors. Chinese Prime Minister Wen Jiabao has visited almost all ASEAN members. Prospective fifth-generation Chinese top leader Vice President Xi Jinping has also visited Myanmar, Cambodia and Laos.
PBG Program
The Chinese Government has been using every stage, framework and forum available to continuously and seriously promote economic cooperation with ASEAN, including the push for the Pan-Beibu Gulf Economic Cooperation (PBG) program. Chinese Prime Minister Wen Jiabao has been pushing the PBG among ASEAN leaders since 2007.
As a Thai representative invited to join the Joint Expert Group for the PBG since 2008, I made the latest trip to attend the ratification of the feasibility study for the PBG early this month. I would like to cite the PBG as a case study for China's "southward strategy".
The prominence of the PBG is the participation by three key southern Chinese provinces of Guangdong, Guangxi and Hainan. The trade volume that the three provinces have with ASEAN represents one-third of the whole China-ASEAN trade. After the ASEAN-China FTA fully took effect in 2010, the trade between the three provinces and ASEAN has expanded as showed in the table above.
China's 12th Development Plan
For Guangxi in particular, it was designated by the Chinese Government as key player in China-ASEAN relations. Guangxi was officially declared Gate to ASEAN (not Yunnan as many think). It hosts China-ASEAN Expo on yearly basis in Nanning, the principal city of the province, since 2004. With conducing factors and guidance brought about by the government, economic ties between Guangxi and ASEAN have enjoyed a big leap. ASEAN has become Guangxi's No 1 trade partner. Businesspeople from Singapore, Malaysia and Indonesia have flocked to invest in the province. In the latest drive, China's 12th Development Plan targets injecting a mammoth budget of 2.6 trillion yuan in five years into the so-called Guangxi Beibu Gulf Economic Zone (GBEX) covering four key cities of Nanning, Fangcheng, Jinzhou and Beihai.
Some of you may wonder why it must be Beibu, a city bordering the South China Sea. Those who have well followed news on international politics and relations have asked me a hit question what the Chinese Government has in mind for pushing its "southward policy" through the realization of the PBG.
Of course, China does not expect to gain from the PBG only in terms of economy and investment. There are points about military strategies and security involved. China and some ASEAN countries have claimed their rights over overlapping marine territories in the South China Sea. Vietnam's Navy has gone so far as to have conducted a military exercise with live ammunition in the South China Sea recently. Vietnamese people have also staged noisy protests against China over the marine territorial dispute.
Role of Vietnam
Vietnam is sensitive to the issue in every aspect, even in the academic field. We members of the PBG panel of experts had to spend a long time to find a suitable name for the disputed marine border as the Chinese representative preferred the term South China Sea, while the Vietnamese counterpart wanted it changed to East Sea, the official term used by the Vietnamese Government. The Chinese expert would not yield to the Vietnamese counterpart's demand and it took several months for the panel to end up with just the word Sea (LOL) so as not to be biased towards any country.
The South China Sea territorial dispute and the push for the PBG could become boiling regional issues in the future. The Thai Government will have to come up with how to properly handle them. It will be certainly better for all parties concerned to cooperate than fight.
Regional Economic Trend
It is not a matter of coincidence or regional economic trend but the Chinese Government does intend to tighten economic ties with ASEAN under what I would call a "southward strategy." China began with its serious move southward in the year 2000, when Chinese and ASEAN were then fiercely competing in the world market. The China-ASEAN trade volume was not so big at the time. Then came the day when then Chinese Prime Minister Zhu Rongji wooed ASEAN to form ASEAN-China Free Trade Area (FTA). The Chinese Government has been seriously pushing for the FTA since then. The trade cooperation started with a gradual cut of import tax until the rate became zero in January 2010.
Chinese have paid frequent visits to ASEAN countries to pave the way for an army of Chinese investors. Chinese Prime Minister Wen Jiabao has visited almost all ASEAN members. Prospective fifth-generation Chinese top leader Vice President Xi Jinping has also visited Myanmar, Cambodia and Laos.
PBG Program
The Chinese Government has been using every stage, framework and forum available to continuously and seriously promote economic cooperation with ASEAN, including the push for the Pan-Beibu Gulf Economic Cooperation (PBG) program. Chinese Prime Minister Wen Jiabao has been pushing the PBG among ASEAN leaders since 2007.
As a Thai representative invited to join the Joint Expert Group for the PBG since 2008, I made the latest trip to attend the ratification of the feasibility study for the PBG early this month. I would like to cite the PBG as a case study for China's "southward strategy".
The prominence of the PBG is the participation by three key southern Chinese provinces of Guangdong, Guangxi and Hainan. The trade volume that the three provinces have with ASEAN represents one-third of the whole China-ASEAN trade. After the ASEAN-China FTA fully took effect in 2010, the trade between the three provinces and ASEAN has expanded as showed in the table above.
China's 12th Development Plan
For Guangxi in particular, it was designated by the Chinese Government as key player in China-ASEAN relations. Guangxi was officially declared Gate to ASEAN (not Yunnan as many think). It hosts China-ASEAN Expo on yearly basis in Nanning, the principal city of the province, since 2004. With conducing factors and guidance brought about by the government, economic ties between Guangxi and ASEAN have enjoyed a big leap. ASEAN has become Guangxi's No 1 trade partner. Businesspeople from Singapore, Malaysia and Indonesia have flocked to invest in the province. In the latest drive, China's 12th Development Plan targets injecting a mammoth budget of 2.6 trillion yuan in five years into the so-called Guangxi Beibu Gulf Economic Zone (GBEX) covering four key cities of Nanning, Fangcheng, Jinzhou and Beihai.
Some of you may wonder why it must be Beibu, a city bordering the South China Sea. Those who have well followed news on international politics and relations have asked me a hit question what the Chinese Government has in mind for pushing its "southward policy" through the realization of the PBG.
Of course, China does not expect to gain from the PBG only in terms of economy and investment. There are points about military strategies and security involved. China and some ASEAN countries have claimed their rights over overlapping marine territories in the South China Sea. Vietnam's Navy has gone so far as to have conducted a military exercise with live ammunition in the South China Sea recently. Vietnamese people have also staged noisy protests against China over the marine territorial dispute.
Role of Vietnam
Vietnam is sensitive to the issue in every aspect, even in the academic field. We members of the PBG panel of experts had to spend a long time to find a suitable name for the disputed marine border as the Chinese representative preferred the term South China Sea, while the Vietnamese counterpart wanted it changed to East Sea, the official term used by the Vietnamese Government. The Chinese expert would not yield to the Vietnamese counterpart's demand and it took several months for the panel to end up with just the word Sea (LOL) so as not to be biased towards any country.
The South China Sea territorial dispute and the push for the PBG could become boiling regional issues in the future. The Thai Government will have to come up with how to properly handle them. It will be certainly better for all parties concerned to cooperate than fight.
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