Photo Credit: The Nation
Economy, Investment and Trade
Large Chinese investments make their presence felt in Indonesia
(2 May 2018) Chinese investments are trending in Indonesia as the country has received large investments from firms based in China. According Indonesian Investment Coordinating Board’s (BKPM), data from January to March 2018, investment from China was valued at US$676.2 million, an increase of 12.78 percent from US$599.57 million the same quarter in 2017. BKPM said the ongoing smelter projects which are controlled by Chinese investors, especially the projects in Sulawesi, were among the most stable investments for Indonesia. The board added that in April, five contracts worth US$23.3 billion, which consist of several infrastructure projects such as a hydropower plant development and a facility to convert coal into dimethyl ether has been signed between both countries as part of the initiative to absorb large amount of capital investment to Indonesia. China investment to Indonesia has experienced a significant increase from US$2.66 billion in 2016 to US$3.36 billion in 2017, and was ranked as the country with the third-largest foreign investment in Indonesia. The Indonesian administration has set an investment target of US$54.77 billion (Rp 765 trillion) for 2018. In the January-March 2018 period, the BKPM recorded US$13.26 billion (Rp 185.3 trillion) in investments, or 24 percent of the target.
Zhejiang province and Singapore to deepen partnership in innovation and urban solutions
(26 April 2018) Singapore and China’s province Zhejiang will work together to look for prospects under the Belt and Road Initiative and deepen cooperation in areas such as innovation and urban solutions. Singapore Senior Minister for Trade and Industry Sim Ann said these include encouraging more Chinese firms to tap Singapore companies’ network and experiences in South-east Asia to cooperatively expand in the region. Fourteen project collaborations were signed on 26 April 2018 between Singapore and Zhejiang companies in sectors such as urban solution, e-commerce, wholesale trade and logistics, which shows Singapore’s continued strong interest in the province. Among them is a joint venture between Anacle, a Singapore software company, and Enjoytown, a Zhejiang real estate developer, to co-develop and provide smart city and township management solutions. Being one of the wealthiest provinces in China, Zheijiang’s gross domestic product stands at US$1.08 trillion, which is three times the size of Singapore’s economy. Trade between Singapore and Zhejiang almost doubled in the past decade by which in 2007, bilateral trade was at US$2.7 billion, and in 2017, it reached US$5.2 billion, 24 percent hike from 2016. Singapore companies have also penetrated into the province with a total investment of $7.2 billion with 1,201 projects in the province.
15th China Asean Expo to promote the China-ASEAN Free Trade Agreement and business opportunities
(26 April 2018) The 15th China ASEAN Expo (CAEXPO) will be held from 12 to 15 September 2018 in Nanning, China, with the theme focusing on building the 21st Century Maritime Silk Road and forging a China-ASEAN Community of innovation, which includes Thailand, Japan, South Korea, Malaysia, Indonesia and Vietnam as the key destinations. The event aims to promote the China-ASEAN Free Trade Agreement (CAFTA) and business opportunities for local companies to enter the China market. Malaysia External Trade Development Corporation (MATRADE) said 179 companies including six government agencies from Malaysia joined the initiative in 2017, generating sales worth US$103.15 million (RM405 million). China’s statistics stated the bilateral trade between China and ASEAN in 2017 stood at US$95.61 billion (RM375.4 billion), an increase of 10.5 percent from year 2016.
U.S.-China trade conflict a concern for ASEAN
(28 April 2018) Singapore’s Prime Minister Lee Hsien Loong said a mounting trade spat between the United States and China was one of the most critical concerns for Southeast Asian nations. On behalf of the ASEAN chair during the 32nd ASEAN Summit, he said that the bloc is deeply concerned over the rising sentiments on protectionism and anti-globalisation between both the economic superpowers. Lee also stated that the political mood in many countries has shifted against free trade and the open and rules-based multilateral trading system seems to be under scrutiny in the region. The United States administration led by Donald Trump has threatened to impose tariffs on up to US$150 billion of Chinese imports, and Beijing has vowed retaliation against American exports. ASEAN is also working on initiatives to cooperatively tackle the threat of extremism and cyber-attacks, as well as to further advance the trade and cross-border e-payment systems.
The Philippines looks to offer 60-40 deal to China in South China Sea joint exploration
(28 April 2018) The Philippines might create a 60-40 sharing scheme in the joint exploration plan with China in the South China Sea. On 26 April 2018, the Philippines President Rodrigo Duterte said rather than go to war over the disputed territory which would only result in the loss of Filipino lives; he suggested improving ties between the Philippines and China by offering a better deal with China to obtain 40 percent of the stake on the joint sea exploration. Insisting that war over the territorial dispute was not an option, President Duterte emphasised that he prefers to fortify the economic and security partnership with China. In recent years, the Philippines were disputing with China over some areas in the South China Asia. However, those tensions were quelled when both countries pursued bilateral talks on territorial conflict while improving bilateral links with China on trade, investment and tourism.