China must strengthen its economic ties with Asean through FDI and soft power
China must strengthen its economic ties with Asean through FDI and soft power

Beijing: China's economic presence in Southeast Asia has recently come under the spotlight for the international community. The Jakarta-Bandung high-speed railway successfully completed its test run earlier this month in front of Indonesian President Joko Widodo and his Chinese counterpart Xi Jinping as world leaders gathered in Bali for the G20 summit.

The first high-speed railway in Southeast Asia, with a target speed of 350 km/h, aims to reduce the distance between the two major cities from three hours to just 40 minutes.

The equipment, technologies and standards used are mainly from China, in what has been called a landmark cooperation project between China and Indonesia.

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The venture is a reflection of China's growing economic clout in Southeast Asia. Bilateral trade between China and ASEAN, the regional bloc, totaled US$798 billion in the first ten months of this year. China has been the largest trading partner of the Association of Southeast Asian Nations for 13 consecutive years.

However, China's advantages go far beyond its ability to produce in large quantities and its large market. China is positioning itself upstream in the global value chain through industrial upgrading.

Along with the Jakarta-Bandung railway, the Kunming-Vientiane and Baleh hydroelectric power stations in Malaysia are two other projects that rely heavily on Chinese equipment, technology and standards.

Apart from this, Huawei Technologies Co. Included in Thailand's 5G network. Chinese technologies are being incorporated into the daily lives of ASEAN citizens, thanks to contributions from ASEAN and the Beidou Satellite Navigation System, China's equivalent of GPS.

China is viewed by 76.7% of respondents in Southeast Asia as the most important economic power in the region, behind the United States, the European Union and Japan, according to an annual survey conducted by the Singapore-based ISEAS-Yusof Ishak Institute. drop offs.

However, this does not mean that Beijing has consolidated its position as the economic leader of the region. China's economic sphere of influence could be undermined by unseen threats.

First, there is a disconnect between the trade volume between China and ASEAN and Chinese FDI in ASEAN economies. More China-invested projects are gaining traction, a reflection of China's cumulative FDI stock in the region over the past decades, but China is still the fourth largest investor in ASEAN economies in the last two years, behind only the US, ASEAN members. leave behind. and Japan.

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Unlike FDI, which often requires long-term working relationships and provides ongoing economic and social benefits for recipient countries, import and export trade may involve only one-time or brief transactions.

Due to China's insufficient FDI in the region, it is more difficult for China to maintain strong ties with ASEAN than its competitors, the US and Japan.

there is more; Beijing must overcome its weakness in soft power. A distinction must be made between objective and subjective praise for China's strong economic power.

According to data from ISEAS-Yusuf Ishaq Institute surveys conducted in 2020-2022, respondents in China are more concerned about China's growing economic influence in ASEAN than Americans, with the US figure at around 30%.

More than half of respondents were concerned that "China's economic and military power could be used to threaten my country's interests and sovereignty" with "China's growing economic dominance and political influence". in the respective countries.

The "China threat" narrative has drawn criticism for China's economic expansion. Walden Bello, a former Congressman from the Philippines, issued a warning in 2010 that the China-ASEAN FTA could reproduce "the old colonial division of labor".

allowing China to reap most of the benefits. He attributed the disintegration of the ASEAN economy to the widespread smuggling of Chinese goods that occurred after the 1997 Asian financial crisis.

Consider the Morowali Industrial Park in Indonesia's Central Sulawesi region, which is abundant in nickel. Chinese joint venture, which the Jakarta Post referred to in 2017 as "a fascinating story of China's grip on the prosperous region".

They came under fire when it was discovered that Chinese workers were treated better than local workers. Received salary and working conditions.

The Jakarta–Bandung high-speed rail project has come under criticism from Indonesian politicians and the media for cost overruns as well as environmental pollution, evictions, and disruption to local livelihoods.

Weak public support for China's investments in specific Asian economies poses risks. This could begin to influence ASEAN collective policies in favor of China, preventing additional deals or initiatives, and ultimately reducing China's economic influence in the region.

The importance of Asia to China is understated as the starting point of the "21st Century Silk Road", a maritime route included in the Belt and Road Initiative. Beijing must adapt its economic foreign policy when it comes to Asia.

One of the easiest ways to achieve a better balance between your business and business inflow is to grow your business consistently and steadily.

A more complete and appropriate implementation plan should be implemented for each project to better understand and comply with local customs, values, laws and conditions as they govern business operations, labor protection and environmental regulation are related to, in the light of the finance plans by China have been told in the local shop.

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The only way to get rid of some people's prejudice towards the Chinese affair is to do so. Hopefully, there will be a change in public opinion about China's economic power.

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