DESPITE global economic uncertainty and the resurgence of Covid-19, the 17th China-Asean Expo (CAEXPO pic) concluded on Monday in China saw more business deals transacted than before.
With more than 150 trade and investment promotion activities online and offline, a total of 86 investment projects worth 263.87 billion yuan (US$40bil) were signed at the four-day event from Nov 27-30, in Nanning, Guangxi Zhuang autonomous region.
The transactions this year represented an increase of 43.6% over last year, according to Wang Lei, secretary-general of the CAEXPO secretariat.
More than 85% of the investment projects were in the fields of health, big data, logistics, new manufacturing, new materials, new energy and finance, he said in his closing speech at the expo.
Launched in 2004, the expo is an important platform to promote trade and bilateral relations between China and Asean. It is an annual event valued by Asean governments and businessmen.
Government officials and company executives from China and Asean expressed optimism on business outlook, after witnessing strong growth in investment deals in the current and post CAEXPO, reported China Daily.
Wang said at the closing ceremony of the regional expo: “Despite the Covid-19 epidemic, the growth in investment value was the highest in the history of the China-Asean Expo.”
According to him, 1,668 companies participated in this year’s CAEXPO. Out of these, 108 are from 22 economies involved in the Belt and Road Initiative (BRI).
Yan Hao, president of China Pacific Construction Group, told China Daily discussions at the expo have strengthened his company’s resolve to beef up ties with its Asean partners, explore opportunities along the ancient Maritime Silk Road and participate in China-Asean infrastructure projects.
Ranked 97th on the Fortune Global 500 list of the world’s largest companies in 2019, the group posted a revenue of US$86.6bil in 2018.
The mainly infrastructure company, which has investments in Malaysia, has been involved in the construction of roads, bridges, ports and industrial parks in over 1000 cities globally.
An academic from Cambodia told Xinhua on Monday that the expo has added momentum to the region’s economic cooperation in the post-Covid-19 pandemic era and lifted optimism.
The four-day expo featured a BRI exhibition area, online trade and investment promotion activities, as well as high-level dialogues to promote the greater participation of Regional Comprehensive Economic Partnership (RCEP) members in the construction of the Belt and Road.
Asean members are part of the 15-member RCEP, which promotes free trade, regional cooperation and multi-lateralism.
“This expo has accelerated the momentum of the current economic cooperation between China and Asean, and through it, trade and investment volumes between the two sides will grow bigger in the post-Covid-19 era, ” Joseph Matthews, senior professor at the BELTEI International University in Phnom Penh, told Xinhua.
Since early this year, Asean has become China’s largest trading partner. In the first 10 months of 2020, China-Asean bilateral trade increased 7.0% year-on-year to 3.79 trillion yuan (US$572bil), accounting for 14.6% of China’s foreign trade, according to data from China’s Customs.
Matthews said the annual expo demonstrates China’s commitment to further opening up its economy and huge market for Asean.
Thai Deputy Prime Minister and Commerce Minister Jurin Laksanawisit said during the expo that his country is willing to deepen cooperation to make China-Asean trade more convenient.
He said Thailand will fully leverage resources offered by the China-Asean free trade area to create a stable and predictable business environment for companies and investors.
Malaysia’s Deputy Minister of International Trade and Industry Lim Ban Hong said during the expo the RCEP would reduce trade friction, spur free trade and globalisation.
He said the RCEP would lay a solid foundation for wider, deeper, and stronger China-Asean cooperation and bring more benefits to the countries concerned.
Nick Koay, chairman of the Malaysian Chamber of Commerce and Industry in China, told the Global Times investors from China and Malaysia would be able to invest and procure each other’s goods with greater convenience under the RCEP.
He noted Malaysia is currently benefiting from the relocation of some China-based supply chains that seek to mitigate the costs of higher tariffs generated by US-led trade war against China.
Indeed, the restructuring of industrial chains and an urgency to recover economies from the pandemic have boosted demand for freer trade, and it is against this backdrop that the RCEP was inked.
The Indian factor had also added spice to the 17th China-Asean expo, which was seen by Chinese venture capitalists (VC) and tech firms as a platform to look for alternative investment sites.
Chinese VCs are in the midst of shifting focus to business-friendly Asean after encountering geo-political problems and protectionism in the West and more recently, India.
Li Jian, founder and CEO of Chinese consulting firm Draphant, told the Global Times that Chinese VC investors that previously favoured India are now looking at Indonesia and other Asean nations.India’s foreign investment policy was amended in April, making government approval mandatory for FDI from border countries - a policy seen as directing at Chinese in India-China border spat.
“Since those investors cannot invest in India because of policy curbs, they’re leaning more toward Asean markets like Indonesia, ” said Li.
Li noted that Asean countries have generally performed well in battling the Covid-19 pandemic, thus injecting confidence in business recovery.
Richard Ma, an Internet industry practitioner who has returned from working in India, concurred: “Many companies are increasingly looking at Indonesia and Vietnam - traditional hot destinations for Chinese investors - and shifting resources from the Indian market.”
For Asean, China is a country to look up to as the Middle Kingdom has demonstrated it could manage its epidemic well and restart its virus-hit economy with speed and vigour.
China, the first country to be hit by Covid-19 early this year, is expected to be the first major economy to post positive economic growth this year.
The latest figure points to that direction. Growth of China’s manufacturing activities in November hit the highest pace in a decade, according to the private Caixin index released on Tuesday.
The Caixin Manufacturing Purchasing Managers’ Index (PMI) for November recorded a score of 54.9 - the highest in 10 years. A score above 50 reflects expansion in the manufacturing sector.
With the signing of the RCEP, good infrastructure will be needed to serve industrial integration and this is where the BRI of President Xi Jinping can contribute a great deal, said commentators.
Among Asean cities with the most potential to attract BRI projects and deals are Singapore, Vientiane, Jakarta and Bangkok, according to a report released by the China Academy of Urban Planning and Design on Tuesday.
The cities excel in development potential in five dimensions: policy communication, unimpeded trade, people-to-people connectivity, infrastructure connectivity and financial integration.
But for China’s state-backed BRI projects, political and diplomacy may be factors to consider too.