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Business / Economy

Belt and Road to boost China-ASEAN economic ties

(Xinhua) Updated: 2015-11-11 17:16

BEIJING - China's Belt and Road Initiative, highlighted during President Xi Jinping's visit to Vietnam and Singapore last week, is set to boost bilateral ties and facilitate trade and investment between China and Southeast Asian nations.

The deepening cooperation on the Belt and Road with the two countries, major members of the Association of Southeast Asian Nations (ASEAN) and key areas along the routes, will expand and upgrade China-ASEAN economic relations, analysts said.

The Belt and Road was proposed by China in 2013 as a trade and infrastructure network. It will connect Asia to Europe and Africa through the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

During Xi's three-day trip, China and Vietnam reached consensus on expanding cooperation within the framework of the initiative and Vietnam's "Two Corridors and One Economic Circle" plan, as well as on production capacity cooperation.

In a 20-point statement, China and Singapore agreed to cooperate in Belt and Road construction, trade, city planning, education and customs, among others.

Song Hong, researcher with the Institute of World Economics and Politics, Chinese Academy of Social Sciences, said the Belt and Road will generate fresh opportunities and infrastructure cooperation that will boost integration of China and ASEAN economies.

Sharing a land border of over 1,000 km, China and Vietnam have been in close contact on infrastructure cooperation with new express roads and railways starting operations almost every year.

A joint communique issued Friday said the two countries have reached an agreement on a feasibility study of the Hanoi-Lao Cai-Hai Phong Railway in northern Vietnam.

New railways in Vietnam are only part of the infrastructure improvement in Southeast Asia as China promotes the ambitious Trans-Asian Railway that will connect Laos, Malaysia, Thailand and Vietnam.

"Thanks to improved infrastructure, logistics are cheaper and faster, along the routes," Huo Jianguo, former president of the Chinese Academy of International Trade and Economic Cooperation.

Echoing his remarks, Song recognized brightening prospects of China-ASEAN cooperation and cited fresh opportunities in capital-intensive industries, like energy, cement and steel, and labor-intensive sectors including textiles and garments.

"Those industries are mature in China, will help the industrial upgrade of ASEAN members and are the best choice for cooperation," Song said.

China and Vietnam also signed a number of cooperation documents covering such fields as party-to-party exchanges, transportation, production capacity, railway, energy, finance and local affairs.

More than 1,000 km away from Vietnam, Singapore is also a significant link in the Maritime Silk Road.

When meeting Singaporean Prime Minister Lee Hsien Loong, Xi said the two sides will promote a third government-to-government project this time in Chongqing, southwest China, and explore cooperation between the enterprises in third markets.

Zhao Lei, associate professor of the Institute for International Strategic Studies at the Party School of the Central Committee of the CPC, expects Singapore will deepen Belt and Road cooperation and build a fourth project in China's western regions in the future.

Singapore has been a major source of foreign investment in China. Between 1990 and 2014, its cumulative investment in China totaled $72.3 billion.

The two leaders agreed to redefine China-Singapore ties as a partnership of all-round cooperation keeping with the times during Xi's visit to the city-state.

Belt and Road cooperation will help upgrades to China-ASEAN Free Trade Area (FTA) and integration of Asian-Pacific region.

Thanks to the FTA, since 2010, China has become ASEAN's largest trading partner, while ASEAN is China's third largest trading partner. Trade between China and ASEAN increased 8.23 percent year on year to $480 billion in 2014.

Given growing economic ties, the two sides are seeking for an FTA upgrade and have seen steady progress after negotiations in goods and service trade, investment and technological cooperation.

"The FTA upgrade is actually the implementation of the Belt and Road construction," Song said.

Huo said China welcomes countries along the routes to actively participate into the process.

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