ASEAN countries expect to become important transit hub on B&R

By Ei Sun Oh Source:Global Times Published: 2017/5/14 21:13:39

Illustration: Liu Rui/GT

Since its gradual rollout four years ago, the Belt and Road initiative has become the cornerstone of China's regional foreign policy, and has received much attention from not only the Asia-Pacific and Eurasia regions, but around the world. As regional leaders are gathering for the auspicious Belt and Road Forum for International Cooperation in Beijing, it is perhaps time to briefly take stock of what has been accomplished thus far and what is to be expected under the aegis of the bold development initiative. In this regard, a view from Southeast Asia, where the 21st Century Maritime Silk Road traverses, will hopefully be illuminating.

Southeast Asia welcomed the initiative from the very onset, with the "Road" segment having been announced by Chinese President Xi Jinping in Jakarta, capital of Indonesia, the largest country in Southeast Asia. As this is a region which is no stranger to commercial links with China since ancient times, Southeast Asian nations are eager to seize opportunities in trade, investment and other forms of economic cooperation with China and also with each other and beyond as the most fundamental aspects of the initiative.

The trade volume between China and Southeast Asian countries is already quite significant, trailing only those with the US and the European Union. Free trade agreements (FTAs) have also been signed by China with individual Southeast Asian countries as well as with the Association of Southeast Asian Nations (ASEAN). It is high time, therefore, to "upgrade" such significant trade links, as urged by Chinese Premier Li Keqiang, to broaden and deepen the FTAs' coverage of goods and services, so that tariffs and non-tariff barriers could indeed be reduced or altogether removed to facilitate more and better trade.

Moreover, ASEAN countries have finally forged an ASEAN Economic Community (AEC) that is expected to develop into a common market and production base. The market, with a total population almost half that of China, is undoubtedly endowed with huge economic potential. In essence, AEC signifies that ASEAN countries have gathered together economically, and are ready to engage with six other major economic powerhouses in the region, including China, to form the much awaited Regional Comprehensive Economic Partnership (RCEP). The negotiations for the adoption of RCEP must be sped up in light of the imminent collapse of yet another regional free trade bloc, the Trans-Pacific Partnership, which shattered the free-trade dreams of many regional countries. An eventual Free Trade Area for the Asia-Pacific can be within reach, provided RCEP serves as a working model in the near future.

But economically, the Belt and Road initiative should be about not just trade but also investment. Many Southeast Asian countries are blessed with plenty of natural resources but hampered by a lack of basic infrastructure to harness these commodities and thereby bring about national development. Under the of the initiative, China has worked with quite a few Southeast Asian countries to develop their port facilities, upgrade their roads and build new railway and pipelines, such that their overall connectivity is much improved. But, foreign direct investments need to stream in from China to reap the benefits. Factories' setup could provide healthy returns to the many Chinese companies eager to expand overseas, and more employment opportunities could be created for the local population.

And the Belt and Road initiative is ultimately about interactions between the peoples of different countries in the region. Southeast Asia, with its diverse and multicultural societies, is uniquely suited to serve as a super transit hub between China and the far reaches of Belt and Road countries, especially those in South Asia and the Middle East, as aspects of their culture overlap with those in Southeast Asia. And Southeast Asia also looks forward to more interactions with Central Asian and East European countries featured on the Silk Road Economic Belt segment of the Belt and Road initiative, perhaps with Chinese facilitation.

The Belt and Road Forum will proffer a prominent stage for regional leaders to renew their vows to forge closer regional links. These lofty goals will then have to be implemented not only by the national authorities, but by aspiring people of the region. Miracles usually happen when people of differing backgrounds are empowered to work together. And that spells true for both the ancient and modern Silk Roads.

The author is a senior fellow with the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. Follow us on Twitter @GTopinion

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