18 January 2020

POLICY WATCH: China seeks deeper ties with ASEAN neighbors

As part of its efforts to sustain economic growth, China has been nurturing diplomatic relations with countries both far and near. It has been investing heavily in Africa to ensure the supply of resources it needs to fuel its progress and strengthening ties with Europe which offers a vast market for its products and is a hub of technologies it needs to upgrade its economy. 

It is also linking arms with neighboring nations in Asia, the world’s most dynamic region whose vibrant economies offer enormous possibilities for mutual benefit. Southeast Asia, in particular, is of growing strategic importance to China because of its proximity, progress and history. With the United States declaring that it is rebalancing its strategy toward the Asia Pacific, China recognizes the need to enhance mutual trust with its neighbors.

President Xi Jinping {習近平} has just visited Malaysia and Indonesia before attending the Asia Pacific Economic Cooperation summit in Bali. US President Barack Obama canceled his trip to attend the APEC summit because of the congressional impasse in Washington, his absence presenting a stark contrast to the Chinese leader’s active engagement in the meetings.

The summit gave Xi an opportunity to personally talk with leaders in the region to assure them of China’s peaceful and mutually beneficial goals in the region, and to explore new cooperation opportunities.

Premier Li Keqiang was also paying official visits to Brunei, Thailand and Vietnam from Oct. 9 to 15. 

During his trip to Brunei, the chair nation of the Association of Southeast Asian Nations (ASEAN), Li attended the 16th China-ASEAN leaders meeting, the 16th ASEAN Plus Three (China, Japan and South Korea) Summit and the 8th East Asia Summit in Seri Begawan.

In a written interview with media from the Southeast Asian region, Li said both sides should remain committed to building good-neighbor relations and to strengthen exchange and cooperation in the security field, according to Xinhua news agency.

He noted that China is now ASEAN’s biggest trading partner and ASEAN China’s third-largest trading partner. Last year, two-way trade exceeded US$400 billion, five times that of 10 years ago, while mutual investment totaled over US$100 billion, three times that of a decade earlier.

“Over the past decade, China and ASEAN have advanced practical cooperation and set up the world’s largest free trade area among developing countries,” Li said, adding that the goal is to increase two-way trade to US$1 trillion by 2020.

Some ASEAN nations have used the renminbi for trade settlement or added it to their foreign exchange reserves, thus helping advance Beijing’s goal to internationalize the Chinese currency.

In his talks with his Indonesian counterpart Susilo Bambang Yudhoyono in Jakarta, Xi proposed the establishment of an Asian infrastructure investment bank to promote interconnectivity and economic integration in the region.

China is also calling on the ASEAN to work for closer coordination of macroeconomic policy to improve their flexibility in fighting financial crises.

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EJ Insight writer