ASEAN Roundtable Series on “China’s Belt and Road Initiative in ASEAN: economic opportunities and ASEAN centrality”
From left to right: Unny Sankar, Senior Principal Assistant Director, Ministry of International Trade and Industry Malaysia; Dr. Zhang Miao, Research Fellow at the Institute of China Studies, University of Malaya; Tan Sri Dato’ Dr. Michael Yeoh, Chairman of the World Chinese Economic Summit and CEO of Asian Strategy and Leadership Institute; Tan Sri Dr. Munir Majid, Chairman of CIMB ASEAN Research Institute (CARI) and President of the ASEAN Business Club; Dato’ Sri Nazir Razak, Chairman of CIMB Group and Dato’ Abdul Majid Ahmad Khan, former Malaysian Ambassador to China and President of the Malaysia-China Friendship Association at the ASEAN roundtable discussion organised by CARI, in collaboration with the ASEAN Business Club.
Kuala Lumpur, 19 July 2017 – Although ASEAN stands to benefit greatly from China’s Belt and Road Initiative (“BRI”), experts believe that the region must also balance the welcomed infrastructure investment with its principle, “to maintain the centrality with ASEAN as the primary driving force in its relations and cooperation with its external partners,” as prescribed in the ASEAN Charter.
This was discussed during a roundtable titled, “China’s Belt and Road Initiative in ASEAN: economic opportunities and ASEAN centrality” which was organised by CIMB ASEAN Research Institute (CARI) today, in collaboration with the ASEAN Business Club.
The roundtable was chaired by Tan Sri Dr. Munir Majid, Chairman of CARI, and President of the ASEAN Business Club and the panel of speakers comprised of subject matter experts, namely Pauline Loong, Managing Director at Asia-analytica and CARI’s Senior Fellow, Dr. Zhang Miao, Research Fellow at the Institute of China Studies, University Malaya, and Tan Sri Dato’ Dr. Michael Yeoh, Chairman of the World Chinese Economic Summit and CEO of Asian Strategy and Leadership Institute.
The BRI involves more than 65 countries, including several ASEAN countries, covering various land and sea routes. In 2015, China invested close to US$8.3 billion in ASEAN. Additionally, total trade in goods between ASEAN and China in 2015 stood at US$354 billion, which has seen an upward trajectory since 2011. The upgrade of the ASEAN-China Free Trade Agreement came into force on 1 July 2016, with the aim of achieving US$1 trillion total two-way trade by 2020.
The participants of the roundtable agreed that BRI can provide the impetus to generate greater economic value to ASEAN. It will also aid ASEAN’s ambitions to improve infrastructure and connectivity among its member states.
“BRI is crucial to bilateral relations between China and ASEAN. ASEAN can leverage on China’s technological advancement in infrastructure development to realise the Master Plan on ASEAN Connectivity. There is already an influx of Chinese companies in various railroad, port, power generation and other infrastructure projects in ASEAN. Medium-sized enterprises in the ecosystem will thereby benefit from the BRI,” said Tan Sri Michael Yeoh.
He went on to add that, “The investment, infrastructure development, innovation and inclusive development (4I’s) that BRI will benefit four main sectors namely education, environment, energy and engineering (4E’s) and a few other sectors as well including tourism, healthcare and fintech.”
Pauline Loong cautioned that while the BRI offers promising prospects in the region and beyond, further details are crucial to attract the private sector, as the initiative is still in its early stages.
“There is much hype around the topic but little in the way of specifics. So far, the Chinese government and China’s state-owned enterprises are the driving force behind this initiative. However, the private sector – both in China and abroad – have held back due to the lack of details on important issues, such as funding and prioritisation of projects. Businesses must also factor in the political risks inherent in large-scale and cross-border undertakings envisioned in BRI. A clear medium to long-term BRI blueprint would go a long way towards strengthening private sector confidence and making the initiative a success in ASEAN and other countries involved,” she said.
Dato’ Sri Nazir Razak, Chairman of CIMB Group, who was also in attendance, suggested that Malaysian and ASEAN governments focus on the value of projects under BRI not just the cost and size, “It is very important that we don’t get overly excited about the size of the projects and the total investment amounts as this can be very dangerous. Governments should instead be focused on the real value of each project, what they are designed to deliver and at what cost on the overall economy, society and the environment, as well as the impact on local business, for example the crowding out of local players and so on.”
ASEAN centrality could also be tested due to different geopolitical dynamics between China and ASEAN countries involved in the BRI projects.
“China could concentrate in developing routes in countries it enjoys stronger bilateral relations with. This may challenge ASEAN’s ambition to have all of its members equally benefit from the BRI. However, this should not be seen as a reason to oppose BRI but rather as an opportunity for ASEAN nations strengthen unity and integration as a regional entity and speak with a common voice, which will result in a coordinated, cohesive and coherent position on issues of concern to the region,” said Dr. Zhang.
In conclusion, ASEAN needs to carefully balance its centrality with economic gains of BRI.
“The BRI presents a massive opportunity for Malaysia and ASEAN. The roundtable came to the view that both Malaysia and ASEAN should not be overwhelmed but should look at projects one by one in their own interest. It was also the view at the roundtable that there must be a national and regional strategy on the BRI. All speakers and the participants who spoke agreed on this,” said Tan Sri Dr. Munir.
Malaysia’s Ministry of International Trade and Industry is the national secretariat for BRI and is working on key projects under BRI in the country.
Over 60 senior corporate executives, government officials, and diplomats attended the roundtable.