Photo credit: New Mandala
Economy, Investment and Trade
China-ASEAN trade volume hits record high in 2018
(15 March 2019) Trade between China and ASEAN saw a 14.1% year-on-year increase in 2018 to reach a record high of US$587.87 billion, according to the Chinese Ministry of Commerce. Furthermore, total two-way investments amounted to US$205.71 billion last year, in which mutual investment stock grew 22 times since 2004. The figures were presented by a senior ministry official during a meeting on the 16th China-ASEAN Expo, which will be held in South China’s Guangxi Zhuang autonomous region from September 20 to 23. This year’s expo will be themed “Building the Belt & Road, Realizing Our Vision for a Community of Shared Future”, with Indonesia as the Country of Honor.
Chinese garment manufacturer begins construction on US$150 million factory in Cambodia
(14 March 2019) Shenzhou International Group (SIG) Holdings recently began construction works on what will be the largest garment production facility in Cambodia in the Phnom Penh Special Economic Zone. The US$150 million Marvel Garment Company, slated for completion in 2021, is expected to eventually employ 17,000 workers to meet its needs. Meanwhile, the Bank of China announced that it will establish a ‘Chinese Desk’ in the Cambodian Ministry of Commerce to facilitate Chinese businesses operating in the country. According to the head of the bank’s Phnom Penh branch Chen Changjiang, the desk will also allow Chinese businesses in Cambodia to make payments via WeChat Pay and Alipay.
Chinese courier increases stake in Myanmar logistics company
(13 March 2019) China’s largest listed courier company SF Holding will acquire a 25% stake in Myanmar logistics company Kospa for US$4 million to help fund an expansion of Kospa’s fleet and warehouse capacity, according to a joint statement issued. Kospa is a joint venture between Myanmar’s Yoma Strategic and Japan’s Kokubu Group. Yoma Strategic will retain its 50% stake while Kokubu Group will hold the remaining 25% in Kospa. The injection of capital from the Shenzhen-listed company comes as Yoma looks to meet the growing appetite for e-commerce in Myanmar. Furthermore, the group hopes to contribute to the development of China-Myanmar cross-border trade, which according to Frontier Myanmar Research (FMR), holds latent potential for “higher end logistics solutions” in the long run. However, FMR notes that the Myanmar government will have to first address issues surrounding the country’s transportation infrastructure, trade finance and customs regulations before such potential can be unlocked.
Chinese investors keen to expand ASEAN supply chain through Thailand’s EEC
(15 March 2019) A group of public and private sector investors, led by representatives of China’s government, expressed interest in procuring a 10,000 rai plot of industrial land in Thailand’s Eastern Economic Corridor (EEC). The request for land was due to China’s desire to create its own community within the EEC to serve investors and improve its supply chain in ASEAN, according to Industrial Estate Authority of Thailand (IEAT) governor Somchit Pilouk. Somchit further said that this interest comes as part of China’s investment expansion plan in 12 key industries in ASEAN, which is expected to attract over 500 Chinese businesses to the special economic zone. To this end, the Chinese investors have identified three key Thai provinces to advance their goals — Rayong, Chon Buri and Chachoengsao.
The Philippines denies that Chinese loans are disadvantageous to the country
(17 March 2019) The Philippines finance secretary Carlos Dominguez released a statement denying assertions that loans from China puts the country at a disadvantage. In fact, he said loans negotiated by President Rodrigo Duterte’s administration benefited from even lower interest rates and better terms than those obtained by the previous administration. For instance, the Philippines’ US$211 million loan for the Kaliwa Dam Project carries a 2% annual interest rate — one percentage point lower than the 3% per annum rate secured by President Duterte’s predecessor for a similar project. Moreover, the loan has a maturity period of 20 years with a grace period of seven years.