Taking on New Momentum

By Wen Qing

The novel coronavirus pandemic has cast a wide shadow upon the world economy. Nevertheless， trade between China and the Association of Southeast Asian Nations（ASEAN） is seemingly bucking the downward pressure.

Bilateral trade exceeded $481 billion in the first three quarters of the year. ASEAN rose to be Chinas largest trading partner for the first time， overtaking the EU and the U.S.， while China has remained ASEANs largest importexport market since 2010.

On November 30， the 17th China-ASEAN Expo （CAEXPO） wrapped up in Nanning， capital of Guangxi Zhuang Autonomous Region in south China， adding impetus to the uptrend.

Weeks before the expo， 15 Asia-Pacific countries， including China and ASEAN members， signed the Regional Comprehensive Economic Partnership， or RCEP. Covering about one third of the world population and GDP， the pact creates the largest trade bloc in the world.

Moreover， this year marks the 10th anniversary of the China-ASEAN Free Trade Area（CAFTA）. Experts believe that China-ASEAN trade and economic ties will go forward more steadily taking advantage of the bilateral and multilateral trade pacts， and platforms such as the CAEXPO.

Bright results

The CAEXPO and the China-ASEAN Business and Investment Summit held on its sidelines are part of the bilateral efforts to promote trade and economic linkage since 2004. Affected by the pandemic， this years event was rescheduled more than two months later than usual， but its scale was by no means reduced. With an exhibition area of 104，000 square meters， it hosted 5，400 booths.

The expo also took advantage of the current strides in technology by introducing， for example， virtual exhibition halls， online negotiations and cross-border live broadcasts， making itself a combination of online and offline activities and removing the restrictions of geographical distance. More than 1，500 enterprises from home and abroad attended in digital form.

The four-day expo displayed its enormous potential. A total of 86 investment projects worth 263.87 billion yuan （$40.1 billion） were signed， up 43.6 percent year on year. That accounts for about one tenth of the ChinaASEAN trade value in the January-August period， coming to an overall $416.55 billion. Investment projects range from healthcare， big data and logistics to smart manufacturing， new materials， new energy and finance.

On November 28， the Second ChinaMalaysia Economic and Trade Matchmaking Conference was launched online. More than 50 negotiations took place in more than five hours， and nearly 20 intentional cooperation projects were agreed upon， accumulating in a total sum of approximately $69.62 million.

Zhuang Guotu， head of the Southeast Asian Studies Center at Xiamen University in Fujian Province， southeast China， told Xinhua News Agency that China and ASEAN are among the most dynamic and fastest growing regions in the world. More importantly， their complementary resources and industries provide for mutually beneficial economic and trade cooperation in the post-pandemic era.

Since its establishment in 2010， CAFTA， which covers some 1.9-billion population with a total GDP around $17 trillion， has achieved a lot. Statistics from the Ministry of Commerce（MOFCOM） of China show that tariffs on 7，000 products have been scrapped and more than 90 percent of imports are tariff-free under its framework.

Chinese investment is also booming in ASEAN countries. The China-Laos Railway will link the inland country with its neighbor. In Malaysia， Chinas CRRC Corp. Ltd. built the first“railroad factory” in the country， which represents the highest level of technology in railway equipment manufactory in ASEAN.

The upgraded protocol of CAFTA came into effect in October 2019 as both sides agreed to push forward a more balanced and innovative FTA with greater synergy and broader cooperation in new fields.

Thresholds in terms of country of origin， customs clearance， service trade and investment have been lowered， further delivering the benefits of CAFTA， Zhang Jianping， Director of the Research Center for Regional Economic Cooperation at the Chinese Academy of International Trade and Economic Cooperation under MOFCOM， said.

Digital cooperation

This years CAEXPO highlighted new priorities in China-ASEAN trade and economic exchanges， including the digital economy.

The year 2020 has been designated as the China-ASEAN Year of Digital Economy Cooperation. Against the background of the pandemic， demands for online shopping， distance education and telemedicine have swelled.

At the opening ceremony， President Xi Jinping said via video link that China will work with ASEAN countries to seize the opportunities presented by the new round of scientific and technological revolution and industrial transformation.

“We could create more highlights of cooperation in such areas as smart city， 5G， artificial intelligence， e-commerce， big data， blockchain and telemedicine， and strengthen the protection of data security and policy communication and coordination， as these efforts will help nurture new drivers for the social and economic development of our two sides，” Xi said.

The digital economy in ASEAN has enormous untapped potential. It is predicted that ASEANs digital economy will increase from 1.3 percent of the GDP in 2015 to 8.5 percent in 2025. In August， Facebook and Bain Company， a top management consulting firm， jointly released a Southeast Asia digital consumer report， saying in 2020， the proportion of people in the region opting to shop online rose from 21 percent last year to 32 percent. The report also said by 2025， digital consumer spending in Southeast Asia will have tripled compared with the 2020 figures， increasing from $53 billion to $147 billion.

The digital economy is an important area for maintaining the stable development of the ASEAN-China partnership， ASEAN Secretary General Lim Jock Hoi said during the expo， adding that China stands strong in the field of digital interconnection and is well recognized， providing unlimited opportunities for ASEAN countries.

Lim believes that with the support of China， ASEANs digital transformation will be injected with new momentum. Chinas expertise in financial technology and digital payment systems will also support the development of trade and investment between ASEAN and China， he said.

China-ASEAN cross-border e-commerce and other bilateral digital economy cooperation is showing a strong drive for growth. The digital economy will become an important force for the future development of ChinaASEAN trade in terms of efficiency and convenience， Zhang said.