Economy, Investment and Trade
China is taking advantage of the US pullback from emerging Asia
(11 May 2017) Experts say that China has been asserting its presence in the region since the US has moved away from its Asia-pivot. It has managed to this with the ambitious Belt and Road initiative. At the sidelines of the World Economic Forum in Phnom Penh, Cambodian Prime Minister Hun Sen said that his country welcomes China’s investments and that other countries have a lot of ideas, but no money. China’s infrastructure projects with developing countries along the Silk Road that are planned or underway, are estimated to be worth over $900 billion according to Fitch Ratings estimates.
Source: CNBC (4 May 2017)
China’s Xi Jinping rejects protectionism at Belt and Road Forum
(15 May 2017) – Chinese President Xi Jinping stressed the importance of rejecting protectionism in seeking global economic growth. Xi said it was necessary to coordinate policies with the development goals of institutions including the Asia-Pacific Economic Cooperation (APEC), ASEAN, African Union and the European Union. He said countries needed to look for win-win results through greater openness and cooperation, avoid fragmentation, refrain from setting inhibitive thresholds for cooperation or pursuing exclusive arrangements and reject protectionism. Hence, the Belt and Road initiative will be inclusive and open to all to address deep-seated problems in global development had yet to be addressed effectively. Chinese banks will lend 380 billion yuan (US$55.09 billion) to support Belt and Road cooperation, and China will also inject 100 billion yuan (US$14.5 billion) into the Silk Road Fund.
Source: Reuters (15 May 2017)
Chinese and Laotian leader meet on cooperation
(13 May 2017) During Premier Li Keqiang’s meeting with Laotian President Bounnhang Vorachit, he said that China wants to deepen cooperation with Laos. This cooperation would focus on key projects such as China-Laos railway and cross-border economic cooperation zones and key areas such as infrastructure construction, resource exploration and development, agriculture and power supply. This meeting took place prior to the meeting on Belt and Road Forum for International Cooperation
Source: XinHuaNet (13 May 2017)
Economist warns that China’s growing debt a worry
(11 May 2017) China’s ratio of debt to gross domestic product surpassed 250% in 2016. This is especially worrying because China’s GDP per capita is still much lower than that of developed economies such as the EU. China’s leverage i.e. total private credit already outweighs that of the EU. Yet, China’s GDP per capita is less than one-third that of the EU. Moreover much of its population, as well as many of its small and midsize enterprises, do not yet have full access to credit. This level of leverage may prove to be unsustainable for the country in the long run.
Source: Nikkei Asian Review (11 May 2017
Singaporean Ambassador says the country has not acted again China
(11 May 2017) At the China-Singapore forum Ambassador-at-large Tommy Koh said that Singapore does not take sides in the South China Sea issue and nor is it aligned with or against any of the major powers. This was in response to Senior Chinese diplomat Ruan Zongze’s comments that Singapore has taken actions in recent years that adversely affected bilateral ties. Tommy Koh reiterated that Singapore is merely a facilitator, trying to find out whether there is a consensus among the 10 ASEAN countries and is always conscious that its national interest is to promote peace and cooperation between the region and China.
Source: The Straits Times (11 May 2017)
China and Philippines to start SCS talks this month
(11 May 2017) Incoming Foreign Affairs Secretary Senator Alan Peter Cayetano announced that the bilateral talks between the Philippines and China over South China Sea will start in May. Cayetano said that the previous administrations have focused only on protecting the Philippines’ claims on the disputed waters but seem to have forgotten the country’s overall relationship with the world’s second largest economy which includes economic diplomacy as well. This comes after many had criticised President Duterte’s seemingly softening approach towards China.
Source: Manila Bulletin (11 May 2017)