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Economy, Investment and Trade
Southeast Asia’s e-commerce market to be boosted by investments from Chinese companies
(23 March 2018) According to Credit Suisse’s Head of Emerging Asia Economics, Chinese companies will be penetrating into Southeast Asia’s e-commerce market by bringing investment and technology into the region, with Alibaba announcing an additional US$2.0 billion investment in Southeast Asian retailer Lazada. In addition to capital injection, Chinese giants like Tencent and Alibaba are also bringing in their technological expertise that will help to overcome the two key problems of e-commerce in the region, which are payments and logistics. Credit Suisse added that currently, e-commerce penetration makes up only at 2 percent in the Southeast Asia region.
China and the Philippines to proceed with oil and gas discussion
(22 March 2018) China and the Philippines will cautiously proceed with discussions on joint oil and gas exploration in the South China Sea. Chinese Foreign Minister Wang Yi said both of the countries are looking forward to advance cooperation on offshore oil and gas exploration with Philippines President Rodrigo Duterte describing the proposed deal as similar to “co-ownership” of the contested areas. President Duterte’s willingness to cooperate with China marks a turnaround from the stance of the former Philippines President Benigno Aquino who had accused Beijing of encroaching, occupying, and building structures on the South China Sea territory that Manila had claimed as part of its exclusive economic zone. Under the Duterte leadership, territorial disputes were put aside in exchange for trade opportunities and financial assistance for domestic infrastructure projects.
Thailand rural communities protest China’s infrastructure projects
(26 March 2018) Rural communities in Thailand have been challenging Chinese companies to stop their environmentally-damaging projects with street protests and court petitions. For instance, grassroots activists in the northern province of Chiang Rai have successfully lobbied the state power utility, Electricity Generating Authority of Thailand (EGAT), to suspend its decision to buy electricity from a controversial hydropower dam proposed by one of the Chinese company, thus forcing the company to put its plans to blast stretches of the Mekong River on hold. However, despite the opposition from local communities, other China’s state-owned company is pressing ahead with its plans to exploit rich potash deposits in Sakhon Nakhon.
China and new technology key to drive change in ASEAN
(27 March 2018) Maybank Kim Eng said the rise of China and new technology will be the two key forces driving the biggest change in ASEAN in the next decade. Between 2006 and 2016, China’s outward investment into ASEAN has risen at a compounded annual growth rate (CAGR) of 45 percent, simultaneously making it the third largest foreign direct investment contributor to ASEAN. In addition to that, driven by innovations in e-payments and technology, e-commerce transaction will be also likely to grow exponentially in ASEAN. However, the majority of Asean’s technology deals are still at the beginning stage with relatively low penetration rates of between 2 percent and 5 percent compared to China, South Korea, and the United States that has a penetration rate of 19 percent, 20 percent, and 10 percent respectively.
China authorities freeze Myanmar traders’ accounts due to illegal gambling activities
(27 March 2018) Chinese authorities have frozen a total of seven bank accounts owned by traders from Myanmar who are doing business along the border in northern Shan state after claiming that the funds obtained by the Myanmar traders were from illegal gambling activities. In June 2017, 3 Chinese banks that have local branches in Myanmar’s border area had frozen a total of 132 bank accounts owned by Myanmar businesses who operates in the 105-mile Muse border trade zone across the Shweli River, claiming that their funds were linked to smuggling, gambling, and drug dealing activities.