Photo Credit: The Financial Express
Economy, Investment and Trade
China is ASEAN’s largest trading partner for the ninth year in a row
(18 July 2018) China’s vice-minister of commerce Gao Yan said that China remains ASEAN’s largest trading partner for the ninth year in a row with the trade volume between the bloc and country at US$514.82 billion in 2017. It was 6.6 percent higher than the trade volume in 2003, when both sides first established a strategic partnership. For 2018, China and ASEAN saw a trade increase of 18.9 percent in the first five months, up to US$232.64 billion. According to Gao, Investment between both sides over 15 years was more than US$200 billion and more than 4,000 firms had been set up through direct investment, generating over 300,000 jobs for local people in the ASEAN region.
China-ASEAN Investment Cooperation Fund (CAF) to step up investments in Southeast Asia
(16 July 2018) China-ASEAN Investment Cooperation Fund (CAF) will invest another US$3 billion after successfully deploying US$1 billion of capital to infrastructure projects in Southeast Asia over the past eight years. According to CAF, investment activity in the energy, transportation and telecommunication sector were the primary drivers of strong investment flows. The USD-denominated offshore quasi-sovereign equity fund also added that the move of Malaysia’s Finance Ministry to halt work on East Coast Railway Link (ECRL) and two pipeline projects did not act as a deterrence for further investment in Malaysia.
Thai government eyes investments from China to boost its development plan
(13 July 2018) The Thai government is looking to bolster its five year-development plan worth US$50.8 billion for its eastern seaboard by attracting Chinese investors to the country. Thailand’s military junta sees the Eastern Economic Corridor (EEC) project as a linkage to China’s Belt and Road Initiative (BRI). Thailand’s Prime Minister Prayuth Chan-Ocha said China’s BRI policy would pave the way for connectivity within Asia and around the world. The five-year plan, which is from 2017 to 2021 will encompass provinces of Rayong, Chachoengsao and Chonburi and it promotes industries such as biotechnology, robotics and aircraft maintenance. China’s Alibaba Group Holding Ltd is one of the investors for the corridor as the e-commerce conglomerate pledged about US$350 million to build a distribution hub in the region.
China is a key contributor to Cambodia’s agriculture sector
(15 July 2018) Cambodian Minister of Agriculture, Forestry and Fisheries, Veng Sakhon said China had been a significant contributor in developing agriculture sector in Cambodia. Since 2009, the two countries have signed over 60 memorandums of understanding, agreements and protocols covering a wide range of cooperation in the agriculture sector. Agriculture is the backbone of Cambodia’s economy as the kingdom earned US$5.5 billion in 2017, accounting for 25 percent of the country’s GDP. Cambodia’s primary crops are rice and cassava as the state generated 10.5 million tonnes of paddy rice and 14 million tonnes of cassava tubers in 2017. In 2017, China acquired about 200,000 tonnes of milled rice and is expected to purchase up to 300,000 tonnes of rice in 2018.
Philippines-China maritime dispute could cost Philippines economic development
(16 July 2018) China’s continuous blocking of oil and gas drilling on Reed Bank in the West Philippine Sea may bring long-term economic consequences to the Philippines, a maritime law expert warned. The Reed Bank is earmarked as a possible substitute to the nation’s leading source of natural gas, the Malampaya field, which will be depleted in less than a decade. Expert warned that the Philippines’s plan for economic development would be affected if the Malampaya field ran out of oil and gas. The substitute for Malampaya would be more expensive and would take at least 10 years of lead time in pursuing natural gas and petroleum energy projects.