Pushing for Closer Links

By+Yu+Lintao

China pledged more than $20 billion in loans to support the construction of Southeast Asias connectivity on November 13. The offer， announced by Chinese Premier Li Keqiang at the Ninth East Asia Summit in Nay Pyi Taw， capital of Myanmar， includes a preferential loan worth $10 billion for the Association of Southeast Asian Nations （ASEAN） members and a $10-billion special loan set up by the China Development Bank for regional infrastructure development.

As part of a series of East Asian leaders meetings， this years East Asia Summit drew leaders from 18 countries， including 10 ASEAN member states and six dialogue partners—China， Japan， South Korea， India， Australia and New Zealand—as well as the United States and Russia as newcomers.

Observers described the move as another major step by China to push forward regional economic integration so as to achieve integrated development and common prosperity. And in the meantime， it is also paving the way to advance the Golden Decade of China-ASEAN relations in the past 10 years to a Diamond Decade in the next 10 years.

“ASEAN nations include both Chinas continental and maritime neighbors. Helping them enhance connectivity is both favorable for meeting these countries own needs for development and conducive to Chinas going-out strategy，” said Wei Ling， a professor on Asian studies at Beijing-based Foreign Affairs University.

Upgrading connectivity

Since the ASEAN-China Free Trade Area（ACFTA） was established in 2010， ChinaASEAN economic cooperation has never been more dynamic and fruitful. Under the bilateral free trade agreement， tariffs have been reduced to zero on 7，881 product categories， or 90 percent of imported goods. This reduction already took effect in China and the six original members of ASEAN—Brunei， Indonesia， Malaysia， the Philippines， Singapore and Thailand. The remaining four ASEAN nations—Cambodia， Laos， Myanmar and Viet Nam—will follow suit in 2015.

After years of rapid development， China has become ASEANs largest trading partner and ASEAN， Chinas third largest， with bilateral trade growing by more than 20 percent annually on average and surging 37 times over the past two decades.

Observers said that like the ACFTA， connectivity between China and ASEAN as well as among ASEAN nations would become the new dynamism for promoting regional trade and investment liberalization.

Wei noted that connectivity mainly includes three aspects： first， institutional connectivity such as improved convenience in the areas of customs clearance and market regulation， supervision and standardization； second， infrastructure connectivity， which includes sufficient and smooth sea， air and land transportation links and enhanced telecommunication， electric power and Internet infrastructure； and lastly， extensive peopleto-people exchanges.

Ruan Zongze， Vice President of the China Institute of International Studies （CIIS）， believes connectivity between China and ASEAN nations will become a new pillar for a bilateral relationship in the future and create new growth. In an online interview posted on the Chinese Governments website， Ruan said that connectivity infrastructure projects such as bridges， roads and ports would unleash massive growth potential.

The emphasis on the construction of connectivity hearkens back to the Cebu Declaration signed at the 12th ASEAN Summit in 2007， in which ASEAN nations pledged the acceleration of the establishment of the ASEAN Community by 2015.

Li Xiangyang， Director of the Institute of Asia-Pacific Studies under the Chinese Academy of Social Sciences， said that promoting connectivity is one of the major focuses of the establishment of the ASEAN Community. He also noted that the Asian Infrastructure Investment Bank （AIIB） would provide more financial guarantees for the further improvement of ASEANs connectivity construction.

In October， a total of 21 Asian economies inked a memorandum of understanding on the establishment of the AIIB with an expected initial subscribed capital of $50 billion. The bank， proposed by China， aims to fund infrastructure projects in less developed Asian countries.

During the Asia-Pacific Economic Leaders Meeting in Beijing in early November， China also announced a contribution of $40 billion to set up the Silk Road Fund. In late 2013， Chinese President Xi Jinping initiated the construction of the Silk Road Economic Belt， which runs from China via Central Asia and Russia to Europe， and the 21st Century Maritime Silk Road， which runs through the Strait of Malacca to India， the Middle East and East Africa， to connect the economies therein. The Silk Road Fund will support infrastructure， resources， industrial and financial cooperation， as well as other projects， among countries along the belt and road.

Observers said that the AIIB， the Silk Road Fund， as well as additional Chinese loans， provide huge opportunities for connectivity construction and economic growth for ASEAN nations that were faced with a capital bottleneck.

“Many Southeast Asian nations have expressed demand for more infrastructure projects， but they lack sufficient funding，” Ruan said. According to him， Chinas offer to provide financial support in connectivity construction will significantly improve the infrastructure of recipient countries， boost regional economic development and create jobs.

Wei stressed that China is sincere and capable of helping ASEAN nations to build infrastructure and improve connectivity， which will undoubtedly pave the way for a “Diamond Decade” of China-ASEAN relations.

Chinas efforts to promote China-ASEAN connectivity and common prosperity have also gained appreciation among observers from ASEAN nations. Chheang Vannarith， a senior researcher at the Cambodian Institute for Cooperation and Peace， said that China has proven its leadership role in fostering peace and promoting regional cooperation.

Joseph Matthews， Director of the International Cooperation Department at the Asia Euro University in Phnom Penh， Cambodia， told Xinhua News Agency， “China is willing and offering to share its prosperity and economic growth with its all neighbors irrespective of their internal policy toward China or internal political situations.”

Maritime disputes

In his speech at the Ninth East Asia Summit， Premier Li reiterated Chinas commitment to a peaceful resolution to its disputes with some ASEAN countries over the South China Sea.

Premier Li affirmed the “dual-track approach” for dealing with the South China Sea issue， which states that relevant specific disputes should be solved through negotiations and consultations by countries directly concerned， and that peace and stability in the region should be jointly upheld by China and ASEAN countries working together. The premier also stressed that the situation in the South China Sea is on the whole stable and the freedom and safety of navigation in the region is ensured.

China and ASEAN have agreed to actively carry out consultation to reach—on the basis of consensus—a code of conduct in the South China Sea at an early date， which has made initial achievements.

Wei said that Lis remarks showed that the Chinese Government does not hide from these differences， but works to contribute concrete measures to solve disputes. “It demonstrates Chinas sincerity and determination for the long-term and good-neighborly friendship with ASEAN，”she said.

Tang Qifang， an expert on Southeast Asian studies with the CIIS， said that she believes the negotiations on the COC will soon make concrete progress.

“The previous negotiations will probably be advanced and institutionalized later，”Tang said. “All parties will try to tease out the consensus and minimize differences.”

In a chairmans statement issued after the 17th ASEAN-China Summit on November 13， Southeast Asian countries agreed to increase mutual trust with China to enhance maritime security and resolve disputes by peaceful means. ASEAN reaffirmed its commitment to the full and effective implementation of the Declaration on the Conduct of Parties in the South China Sea in its entirety as well as to work toward the early conclusion of a code of conduct in the South China Sea.

The statement also voiced support for the implementation of early harvest measures， including the adoption of the first list of commonalities on consultations for a code of conduct in the South China Sea， the establishment of a hotline platform among search and rescue agencies， a hotline among foreign ministries on maritime emergencies， and a table-top exercise on search and rescue.

ASEAN agreed to designate the year 2015 as the ASEAN-China Year of Maritime Cooperation， welcoming Chinas comprehensive plan for utilizing the ASEAN-China Maritime Cooperation Fund to provide fi- nancial support for their cooperation in the areas of maritime connectivity， marine science and technology， as well as maritime scientific research， search and rescue， disaster management and navigation safety.

Wei added that shared interests between China and ASEAN nations far outweigh their differences over the South China Sea issue. She proposed all sides should view and settle the issue with a focus on making progress.

“With the gradual increase of mutual trust， disputes can be well managed and settled，” Wei added.

Ties with Myanmar

After the East Asian leaders meetings in Nay Pyi Taw， Premier Li paid an official visit to Myanmar， with which China enjoys a paukphaw （fraternal） friendship. It was Lis first trip to Myanmar since he took office as Chinese premier last year.

During his trip， the two countries signed a deal to build power plants fueled by natu-ral gas， one of a number of agreements worth $7.8 billion that touched on agriculture， telecommunications and finance cooperation. The two sides also agreed to establish an electricity cooperation committee as a working-level liaison channel for the energy sector， to keep projects on track.

Observers said that after some frustrating setbacks regarding Chinese investment in its infrastructure over the past few years， Myanmar is seeking to reassure investors from China that they are welcomed. In recent years， certain China-invested projects， such as the Myitsone hydropower plant in north Myanmar， were suspended by the Myanmar Government under the pretext of public will.

Ruan of the CIIS said that Premier Lis visit to Myanmar has further deepened mutual political trust， ushering in a new phase in China-Myanmar relations.

When meeting with Premier Li on November 14， Myanmar President U Thein Sein said that his country will support and actively participate in the Bangladesh-ChinaIndia-Myanmar Economic Corridor， the Silk Road Economic Belt， the 21st-Century Maritime Silk Road and the AIIB.

The president also promised to conduct cooperation with China in largescale projects， increase people-to-people exchanges and promote bilateral ties to a new height.