Photo Credit: Reuters
ASEAN and China agree on framework for code of conduct
(18 May 2017) After a meeting between Chinese and ASEAN officials China’s foreign ministry said the framework had been agreed upon. However, no further details of the framework were given. The Ministry said that all parties will use the framework of regional rules to manage and control disputes, deepen practical maritime cooperation, promote consultation on the code and jointly maintain the peace and stability of the South China Sea. The framework will be submitted at a meeting of the foreign ministers of China and the ASEAN countries in August 2017. Chinese Vice Foreign Minister Liu Zhenmin also made comments which called on others to stay out, apparently a coded message to the United States.
Source: Reuters (18 May 2017)
Duterte claims China threatens war
(22 May 2017) The Philippines and China played down a warning by President Rodrigo Duterte that China would go to war if the Philippines drilled for oil in the disputed South China Sea. However, the Philippines is now trying to play down Duterte’s comments. Foreign Secretary Alan Peter Cayetano said that the meeting between two leaders was frank and friendly and that the discussion was largely about how to stabilise the region and prevent conflict, not threatening it.
Source: Business Insider (22 May 2017)
Economy, Investment and Trade
Chinese automaker agree to buy Proton
(23 May 2017) Chinese automaker Geely has agreed to buy Malaysian manufacturer Proton from DRB-Hicom. Zhejiang Geely Holding Group, which controls Hong Kong-based Geely Automobile and Sweden’s Volvo Car Group, will acquire 49 percent of Proton. Proton also controls British sports car maker Lotus.Other potential bidders included PSA, the Paris-based maker of Peugeot and Citroen cars, its domestic rival Renault and Japan’s Suzuki Motor Corp. Geely hopes to lift Proton’s sales in right hand-drive markets including Malaysia, the United Kingdom, India and Australia.
Source: Reuters (23 May 2017)
Lack of clarity in reporting of Chinese investments in Indonesia
(23 May 2017) Reporting of Chinese foreign direct investments (FDI) into Indonesia have been inconsistent. Indonesia’s Investment Coordinating Board (BKPM) announced that Indonesia received US$2.7 billion in FDI from China during 2016. Bank Indonesia (BI) recorded only US$163 million from China during the same period. China’s Ministry of Commerce’s (MOFCOM) latest data records US$1.5 billion worth of approved outflows of FDI to Indonesia during 2015. But for the same period, BI recorded US$379 million of FDI inflows from China and BKPM reported a figure of US$628 million. These discrepancies have been attributed to a variety of factors. One being that Chinese companies invest in tranches so while BI takes into account only the investment that has been made, BKPM may be taking into account the entire amount promised. Another reason given was that Chinese companies may be channeling their funds to Indonesia through their Singaporean subsidiaries, which MOFCOM does not consider.
Source: Asia Times (23 May 2017)