In response to the U.S. "Liberation Day" tariffs, China has escalated measures, imposing retaliatory tariffs as high as 145% on U.S. goods. This escalation has significantly disrupted bilateral trade, with Chinese exporters facing substantial losses and uncertainty.
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00:00Hello and welcome to Niagara Spotlight with me Tamina Kaoschi.
00:10Niagara Spotlight takes us through the week in economic analysis and future affairs.
00:14This week on Analysis, we discuss strengthening ASEAN-China economic ties.
00:19As President Xi Jinping wraps up his three-nation ASEAN tour visiting Vietnam, Malaysia and Cambodia,
00:25he's not just signing memorandums of understanding, he's signing a manifesto for multilateralism.
00:30In a world where unilateral tariffs and trade wars are the new normal, Xi's message is clear, cooperation over coercion.
00:38In Malaysia, the ink dried on 31 memorandums of understanding covering everything from green development to digital economy.
00:46That's not just a deal, that's a commitment to sustainable growth.
00:50Prime Minister Anwar Ibrahim, ever the pragmatist, emphasized that Malaysia's foreign policy will remain balanced and inclusive.
00:57He reaffirmed Malaysia's commitment to the One China policy and underscored the importance of ASEAN centrality in a shifting global order.
01:05Prime Minister Anwar's vision, a region where no nation, regardless of size, dictates the terms of engagement.
01:11This visit, of course, comes on the heel of President Trump's Liberation Day tariffs and the subsequent 90-day suspension.
01:18While Washington plays chess, Beijing is playing bridge-building connections, not walls.
01:24In Cambodia, Xi's visit is a reminder that infrastructure is the backbone of economic diplomacy.
01:30Discussions centered around the $1.7 billion FUNAN-TI COCANEL project, which China poised to cover 49% of the cost.
01:38It's a partnership, not a bailout.
01:41So, as ASEAN prepares to chair the world stage, the message is unmistakable.
01:45Unity, not division.
01:47Collaboration, not confrontation.
01:49In the grand tapestry of global politics, ASEAN and China are weaving a narrative of shared prosperity.
01:54Chin Duosu, senior fellow with Panggol Institution, a Beijing-based think tank, joins me now online to weigh in on strengthening ASEAN-China economic ties.
02:04A very good morning.
02:05How are you doing, Chin Duosu?
02:07Thank you for having me.
02:08I'm good.
02:09Fantastic.
02:10So let's get the discussion started, Chin Duosu.
02:12I'd like to focus first by beginning on talking about beyond bilateralism and can ASEAN-China economic integration lead to a new multilateral model?
02:23Perhaps a couple of thoughts on this to get the conversation going.
02:30Obviously, it's a very important task for a lot of countries to think about multilateralism or true multilateralism.
02:39It reminds me of the Munich Security Conference back in February in Germany.
02:46I mean, there, the United States senior officials at the meeting basically talked about their relationship with the European countries and also their relationship with the world.
03:00It appears to be, you know, more and more unilateral.
03:04That's a startling moment for the Europeans because they have a strong cross-atlantical relationship.
03:10And then there, the Chinese Foreign Minister Wang Yi talked about, you know, multilateralism in a sense of a true multilateralism, meaning that every member in the international community should be equitable.
03:23We are equal.
03:24We are equal.
03:25You know, we deal with each other on equal footing and with mutual respect and respect for sovereignty, cultural integrity, internal affairs, respect for their own system.
03:36But at the same time, we do cooperation in the manner of a mutual benefit, in a mutual beneficial way.
03:43Otherwise, it will not be sustainable.
03:45You cannot have a relationship with that benefit.
03:48One side alone, well, at the expense of the benefits of the other side, then that will not last long.
03:56So, you know, that's a very different, let's say, idea from, you know, just the surface on the surface of the meaning, like multilateralism means, okay, there are a lot of powers, a lot of poles, you know,
04:12the U.S. is the one pole, European Union, Russia, China, India, ICM, et cetera.
04:19It's not that sense.
04:20It's really about, yes, there are multilateral factors, but at the same time, you know, what kind of relationship would we want to have?
04:28That is the true multilateral or multipolarism means.
04:33And multilateral, on the other hand, is really, you know, when it comes to trade, you know, Windows WTO, World Trade Organization, that is an organization that regulates, you know, trade between nations.
04:45So that means we have rules to follow for all the players.
04:49We have rules to follow.
04:50We are equal.
04:51If we have a dispute, if we have a problem, we know where to go.
04:55And we know there are rules that will measure whether our own behavior, whether our behavior or our policies are the right ones, are proper or not.
05:06And then we will accept that kind of ruling if we are wrong and we will correct ourselves.
05:12If the other side is wrong and we expect them to correct their own behavior.
05:16That is a world I think that the international community looks forward to.
05:23Instead of one that's unilateral with a strong sense of protectionism, like, you know, America first.
05:32Everything is about American interests and they don't care about the interests of other partners.
05:38So that's why we are seeing this tension, this confrontation, this challenging moment.
05:47We see even the U.S. has with even the closest partners like Canada, like Mexico, like the European Union.
05:54So I think in this part of the world, China, ICM, the Asian countries, you know, in this region is the most dynamic economic growth.
06:05And I think, you know, what with the people, I think it's not difficult for people somehow because of maybe Asian value, Asian culture.
06:14We understand this without much difficulty and we conduct ourselves without much difficulty in handling with China.
06:22Clearly, the tone has been incredibly positive.
06:25And of course, it helps to underscore the fact that bilateral trade between ASEAN and China reached a total volume of close to $912 billion in 2023 alone.
06:36Thanks for that, Chindro.
06:37Now, moving along to looking at perhaps a digital Silk Road, perhaps versus a digital divide.
06:43And there is also a clear need to focus on navigating the digital economy when it comes to ASEAN-China relations.
06:50Now, both regions, of course, Chindro are investing heavily in our digital infrastructure.
06:55So how can we then ensure equitable access and avoid exacerbating the digital divide?
07:00This, of course, coming from the fact that across ASEAN, the rate of digitalization, of course, differs.
07:06Some thoughts on that.
07:07Well, that's an important task.
07:09You know, internationally, when we talk about the digital divide, usually we refer to, you know, some countries are in a leading position.
07:19Other countries are lagging behind because of lack of technology transfer, lack of technology sharing with the poorer countries or less developed countries in that area.
07:31You know, inside the country, we often say, you know, different regions because of economic reasons.
07:37Some regions are more advanced.
07:40Others are less developed.
07:42And then there's a problem.
07:44I think, you know, inside the country, it's really about, you know, we saw poverty or equality or equal access to internet, for example.
07:55You know, once people have access to the internet, you know, they, in particular the young people, will be able to figure out, you know, what's the best technology I can access to?
08:08How can I use this technology for my purpose, for my business, and for my study, for example?
08:14So, if you look at what's happening in Africa, that is the case, you know, people, also in China's case, China basically, leap forward from, you know, the, you can say it is diesel fuel cars, leap forward from its fixed phone line to mobile and to EV, respectively.
08:35And in this sense, on the international platform, I would say, it's about the technology sharing.
08:45For example, like, let's say, artificial intelligence, you know, in the use of artificial intelligence, large language model.
08:52ChatGPT or DeepSeek is a bit different. ChatGPT is, you know, it's a commercial product, it's a real product.
08:59You know, their purpose, obviously, is a commercial commodity, commercial body, you know, entity, their purpose is to make money.
09:10DeepSeek, of course, is also a private entity in that sense, but its technology is open source.
09:17It is open source, meaning that, you know, you can, everybody can access DeepSeek, and everybody can train in their own sphere of expertise in their own technology area.
09:31And it can train the large language model to work for their study, for their research.
09:38So, you know, many countries, many people are using DeepSeek as part of the sense.
09:44And then, in a large sense, you can say that the Chinese side promotes the idea of sharing with its partners in terms of technology.
09:53You know, China is ready to do technology transfer along Belgian World Initiative, for example, partnership there, as long as that works for the partner side, for the country.
10:06And also, you know, some people would call it Chinese modernization.
10:12It's an open source modernization.
10:14When China, let's say, you know, gets rid of the poverty and develops fast in terms of modernization,
10:21and it tries to share, you know, what it has experienced and what worked and what it has to share with its partners.
10:31I mean, in this sense, of course, Asian countries like, you know, artificial intelligence, digital technology.
10:38We are talking about, you know, that's part of the 31 MOUs between China and Malaysia.
10:44It's also part of the cooperation between China and Vietnam, for example.
10:50So, it's really about whether we are there with all the conditions, right or not, to work on the digital area, artificial intelligence.
10:59And I think that's the mind, the open-mindedness in terms of when it comes to partnership in this region.
11:07Absolutely. And thank you also for raising the topic of DeepSeek, which, of course, leads to more digital autonomy
11:13and at the same time ensuring that data center investments, for example, are also done on a sustainable scaled model.
11:19At the same time, of course, ASEAN is also negotiating the Digital Economy Framework Agreement, DEFA,
11:24which hopes to unlock up to $2 trillion in digital economic value and this over just the next five years or so by 2030.
11:32Thanks a lot for those insights, Chindul.
11:34Let's move on into looking at, of course, green growth.
11:37Now, another topic you can never let it go when you're talking about sustainability.
11:41Let's look at the fact that there are numerous green development projects which have been initiated.
11:47But, however, what mechanisms could be put in place from your perspective to ensure their long-term environmental sustainabilities?
11:56And how can both parties, ASEAN as well as China, balance economic growth with environmental preservation in our collaborative efforts?
12:06Well, it's a big question. You know, that's a question, a topic for the global community, obviously.
12:12You know, if you take a look, a closer look at the Chinese development path in terms of the green technology,
12:19that goes at least, it goes back at least two decades ago when China made plans to green its economy for green development.
12:32You know, the world, you know, most of the world has noticed very little about what's going on inside China.
12:39That is a long-term plan, probably because, you know, during the certain point of industrialization,
12:46and every nation experiences heavy, serious pollution, air pollution, water pollution, soil pollution.
12:54And you have to deal with that problem.
12:56And that is a serious challenge for the Chinese side.
12:59At one point, the number one priority for the Chinese public is pollution, air pollution.
13:06So the government has to, you know, work hard to deal with that issue.
13:11That's part of the reason why China stresses so much about green technology, green energy, or green development.
13:18You know, politically, the Chinese leadership, they talk about ecological civilization.
13:25That is, I would say, the upgraded, the issue of being green to a level of civilization.
13:33So that's how much importance they attach to this topic.
13:37And then, you know, that's one part.
13:41Another part, of course, China is an important part of this global effort against climate change.
13:48So I think, you know, somehow they work very well.
13:53And, you know, internationally, that's your responsibility.
13:56There's your commitment to reduce carbon dioxide.
14:00And inside, of course, you deal with pollution.
14:03And then Chinese invest heavily in this sector.
14:07And then with technology and with a lot of investment, you do have technology.
14:11You have a market.
14:12You have competition.
14:13So that's why we are seeing this EV, rapid EV rise in China.
14:19Currently, there are more than about 130 companies in the EV sector.
14:25There's a fierce competition.
14:27Competition brings better service, lower price, and high-quality product there.
14:33So that's, of course, in the green energy sector, China is leading in the world.
14:38You know, solar panels, batteries, et cetera.
14:42So in this sense, China has a lot to offer, has a lot to share with its ICM partners.
14:49Either in EV sector, solar panels, you know, batteries.
14:54You know, China can work, both sides can work together to have batteries.
14:59For example, factories, if they just use the conditions, the necessary conditions.
15:04And then there's a green supply chain, I would say.
15:08Supply chain between China and ASEAN countries.
15:11That will be bringing two sides much more integrated in this sector.
15:17And, of course, you know, China alone will not do that.
15:21ASEAN alone will not do that.
15:22We have to work together to fight climate change, to have a sustainable development.
15:27We will push forward for better green technologies and to make our development sustainable,
15:35our environment sustainable, or better protected.
15:38I think that's the way to go.
15:40There's basically no disputes about that, maybe, except for the Maka people in some part
15:47of – in the United States, you know, some people still deny climate change.
15:51It's a different story.
15:52But in the rest of the world, people are committed to fighting climate change, committed to a better environment,
16:03committed to a sustainable development.
16:05And in this sector, I think, you know, there's governments-to-government cooperation from the
16:10Chinese side to Malaysia to ASEAN side.
16:13And then there is a private sector cooperation, firms from the Chinese side and business leaders from
16:21Malaysia, from ASEAN countries.
16:23They need to – and they are doing that, actually – meet each other frequently,
16:28talk to each other in an intensive manner to see how we can work together to offer better products,
16:36products, you know, that will protect the environment, that will ensure long-term development,
16:42that will ensure less and less pollution, less and less waste in terms of manufacturing,
16:50in terms of serving communities.
16:53Certainly.
16:54And of course, it bears repeating that, quantifiably so, China's investments over the years 2000
17:00to 2020 across ASEAN for renewable energy efforts exceeded about $31 trillion.
17:06So that is definitely very important.
17:09And moving from there into supply chain resilience.
17:12Trinjo, do you feel that ASEAN-China cooperation will be able to mitigate global trade disruptions given,
17:19of course, the recent challenges in global supply chains?
17:22And how can we move towards enhancing cooperation to build a more resilient and diversified supply chain?
17:28Perhaps we could discuss a little more on the Belt and Road play and how these initiatives come in for this context.
17:35Yes, I think it has different aspects.
17:40On one hand, you know, resilient global supply chain requires, of course, infrastructure and connectivity,
17:51physical infrastructure.
17:53You want to have better roads, highways, ports.
17:56And then I would call it, let's say, non-tangible connectivity or infrastructure,
18:04financial infrastructure, for example, or digital infrastructure, et cetera.
18:10That's very important for connectivity of the inside of the country and also in the region,
18:17or in this sense, China and ASEAN countries.
18:22That's a connectivity.
18:24Infrastructure, that's resilient, you know.
18:27Why are we talking about that?
18:29Partly because of the pandemic, partly because of this geopolitical tension.
18:35You know, somehow, some countries decided to, you know, reroute their supply chain or rewrite supply chain,
18:44you know, so-called French shoring or near shoring.
18:48That's a change of global supply chain that brings disruption, unfortunately, to the global community.
18:55And then for countries that are concentrated on free trade and multilateralism,
19:03so they are talking about, you know, resilience of global supply chain or of regional supply chain, either way.
19:12And then, in this sense, China and ICM is, I think, you know, global supply chain, of course, you have one place,
19:20that's the starting point.
19:21And then there's the end place, probably, you can call it consumption market.
19:26Currently, there's probably, in a sense, there's heavy reliance, I'll call it over-dependence on the U.S. market, our final product.
19:38Chinese final product, Vietnamese final product, et cetera, ASEAN countries.
19:43The final product often lands in the U.S. market.
19:47That gives the U.S., of course, a lot of power.
19:50You know, they have the consumption power.
19:52It gives them the power to impose tariffs on countries like China, like, you know, ASEAN, Cambodia, Vietnam,
19:59in this part of the world, Japan, South Korea,
20:01there's every country, you know, Australia, et cetera, or Singapore, despite the U.S., the fact the U.S. enjoys, you know,
20:10Twitter surplus with Singapore, with Australia.
20:13They still impose 10% tariffs.
20:15But anyway, I think the idea of resilience here in one way is really about an increase of our own power of consumption,
20:26a growth of our own market inside this region, China and ASEAN.
20:31On the Chinese side, of course, China has made it a priority to boost domestic consumption.
20:38Not only, you know, consumption of Chinese goods, but also consumption from other parts of the world that we call import, of course, in terms of trade.
20:47We purchase products from Malaysia, from Vietnam, from ASEAN countries, agricultural products, and other kinds of products, of course.
20:57And then there's the idea of the region-wide consumption increase.
21:04For example, inside ASEAN countries, 10 countries, I think the focus should not only be on the ability to manufacture, to make stuff, to make goods,
21:16but also the ability, people's ability to consume, or we call it like this level of consumption.
21:25Or in that sense, that intra-relationship, that is countries to work together, to do more trade with each other, to consume goods and services from each other.
21:39And in this sense, China and ASEAN, we should trade more goods within our partnership, and we should consume more services within this relationship.
21:51For example, more students from ASEAN countries go to China to pursue their further studies with digital technology, with artificial intelligence, with quantum computing, et cetera.
22:04China is probably one of the two countries leading in these sectors.
22:09And then Chinese choice, we see last year, for example, 20 countries have witnessed about six million visits between Malaysia and China.
22:19So that's an increase.
22:21And if you look at the public perception of each other, obviously, it's very positive.
22:26The sentiment is very positive.
22:28There's a lot of young people in the Chinese side.
22:31On the Chinese side, they want to go to Malaysia, go to ASEAN countries to visit, to study, and particularly in Malaysia.
22:38And it's the same, you know, on the Malaysian side, on ASEAN side.
22:42So that's the purchase of service, right?
22:45Education is part of service.
22:46Tourism is part of service economy.
22:48So in that sense, you know, we will reduce our reliance on the U.S. market, for example.
22:55In that sense, and then that's the resilience of the supply chain.
23:00And because you reduce your reliance on the outside definition, and then you increase your own level of consumption.
23:11And so, of course, by strengthening relationships, by having partnership in the manufacturing sector, and of course, that's the resilience of global supply chain.
23:23Clearly.
23:24And also BRI initiatives have of late been focusing on human capital development, which is most helpful, especially for countries like Cambodia and Myanmar,
23:32focusing on vocational skills, as well as equipping the workforce with regional industrial knowledge.
23:38So moving on from there into geopolitical tensions.
23:41Now, how could ASEAN-China economic relations navigate regional security concerns?
23:47This is, of course, in light of ongoing geopolitical tensions, particularly in the South China Sea.
23:52So any preliminary thoughts on that?
23:54That's a good question, a very important question, because without stability, without peace, there's no development.
24:05I think that's the common understanding in this region, between China and ASEAN countries in particular.
24:11I would say most of the ASEAN countries, because we know that there's a dispute between China and the Philippines ongoing.
24:18And if you look at the majority of the countries, absolute majority of countries in this region, including China, their national priority is development.
24:27It's the same for us, for Malaysia, it's the same for Vietnam, the same for Indonesia, for Singapore, because we know that we need to develop further for the welfare of our people, for the benefit and interest of our nation.
24:44So that's the understanding, that's why this region is the most dynamic in terms of economic expansion.
24:52It's the locomotive of the global economy.
24:54For example, China alone contributes every year 30% of global economic growth.
25:01So we are the important contributor to the global economic growth.
25:06But the prerequisite, of course, for that kind of contribution, for that kind of growth, is regional peace and stability.
25:15For that purpose, I would say an important factor is, on one hand, we should always stick to our traditional practice, you know, respect for domestic affairs.
25:27For example, the one-China policy.
25:29ASEAN countries, you know, they respect one-China policy.
25:34Without change in that policy, you know, because I'm saying this because, you know, some Western countries, you know, tried to make some changes for that policy.
25:49That's very unfortunate, because that's the fundamental interest of the Chinese side.
25:53If any countries that, you know, play with that concept, play with that, the Taiwan question, that creates instability, that creates tension.
26:02And in this part of the world, fortunately, I think there's a wise wisdom among ASEAN countries.
26:11You know, every country basically respects faithfully or implements faithfully the one-China policy, one-China principle.
26:18Thank you so very much for your time and your fantastic insights.
26:33It's been an absolute pleasure having you on Niagara Spotlight.
26:37Well, that's all we have time for today.
26:39That was Kinjuo Xu, who is a senior fellow with Pangol Institution, a Beijing-based think-tank, discussing strengthening ASEAN-China economic ties.
26:47I'm Tamina Khosji signing off for now.
26:49We'll see you again with Niagara Spotlight next round with more economic analysis and issues.
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