Chinese President Xi's visit to ASEAN countries amid U.S. tariff threats underscores the importance of regional cooperation. Rajiv Biswas, CEO of Asia-Pacific Economics highlights the need for coordinated responses and stronger intra-regional trade to mitigate the negative impact of U.S. protectionism.
Category
šµ
MusicTranscript
00:00Rajiv Bezwoz is the CEO of Asia Pacific Economics, an economic group based in Singapore.
00:06Joining us now, hello Rajiv.
00:08Clearly, ties are really strong between these four nations.
00:12What is the significance of President Xi's visit to the region right now?
00:17Well, President Xi is visiting a number of ASEAN countries
00:22at a time when much of Asia is facing severe threats from rising U.S. tariffs.
00:31And Asia is a very export-driven region.
00:34The success of East Asia has been very much driven by trade liberalization over the last 50 years.
00:42And the export economies have been very important for the growth of many countries in ASEAN, for China,
00:50and also much of the whole of the Asia Pacific region.
00:56So at a time when U.S. policy is shifting towards trade protectionism,
01:02President Xi's visit is very crucial for building regional cooperation
01:07and also a common approach to how to respond to the threat of U.S. tariff measures.
01:15And in particular, I think the upcoming visit to Malaysia is crucial
01:21because at the moment, Malaysia is the chair of ASEAN.
01:26So the meeting between President Xi and the Prime Minister of Malaysia,
01:32who's leading the ASEAN initiatives to have a coordinated response to the U.S. tariffs,
01:40will be very important.
01:41Do you think that this tariff turmoil actually presents an opportunity within the Asian region?
01:50I think the U.S. tariff increases are severe disruption to world trade
01:56and are actually a very significant economic shock to the world economy
02:01if they are implemented in the way that's been communicated.
02:06It is still under negotiation, so we'll have to see what the final tariff rates are.
02:12But this is a very negative factor for the world economy in the near-term economic outlook.
02:19And it's particularly negative for Asia because Asia is such a trade-driven region.
02:25And therefore, I think what is needed now in Asia is a much greater coordination amongst Asian countries
02:34to find not only a common response to the U.S.,
02:38but also what can Asia do amongst the region, amongst the partners of Asia and the broader Asia Pacific
02:47to try to support economic growth momentum in the next couple of years.
02:53And that can be a range of measures such as fiscal policy.
02:57Some countries may have room for monetary policy stimulus, but also greater intra-regional trade.
03:05Already, East Asia and the broader Asia Pacific have a very important platform
03:12with the RCEP free trade agreement, which is already in place.
03:16So further initiatives to strengthen RCEP, to strengthen other forms of regional trade cooperation,
03:24and also bilateral trade cooperation will be very crucial to try to put more momentum
03:30for Asia's own domestic-driven growth and be less reliant on trade with the U.S.
03:39over the medium to longer term, because clearly what has happened now
03:43is forcing Asia to really look towards its own consumer markets.
03:49And there are very big consumer markets in Asia.
03:52China, of course, is a vast consumer market.
03:55Japan is a large consumer market.
03:58South Korea and ASEAN and India are also very large consumer markets.
04:02We have to remember that Asia is now a very big part of the global economy.
04:10About 37% of world GDP comes from the Asia Pacific region.
04:15So Asia has a lot of muscle now to do more amongst itself.
04:19So I think greater cooperation is now needed to try to drive domestic-driven economic growth
04:27amongst the Asian countries in the face of these tariffs from the U.S.
04:31All right. Well, thank you so much for speaking to us.
04:34That's Rajiv Biswa, CEO of Asia Pacific Economics, which is an economic group based in Singapore.