24 April, 2013
Political Security

The South China Sea conflict continues to serve as a political minefield for the disputants involved as tensions escalate following the aggressive stance that Beijing has adopted.

• The conflict which involves sovereignty claims over the South China Sea / West Philippines Sea from Malaysia, Brunei, Vietnam, the Philippines and China has overshadowed high-level meetings between the nations all year and is top of the agenda at the ASEAN Summit just concluded in Brunei
• A legally binding Code of Conduct is one of the outcomes sought at the ASEAN Summit to ease tensions and relief pressure in a region which already has North Korea threatening nuclear warfare
• With the South China Sea dispute at the forefront, the Asia-Pacific region is predicted to hold 26% – nearly US$200 billion – of global naval and maritime security in the next 20 years as complex rivalries and relationships develop

24 April, 2013
Trade and Investment

China has made several significant political moves in the recent week bolstering relationships amongst its ASEAN neighbours, coincidentally in the week leading up to the ASEAN Summit in Brunei from 24-25th April 2013.

• There has been a flurry of international relations developments with China renewing ties with several ASEAN countries, emphasising healthy relationships with Singapore, Thailand, Vietnam and Cambodia
• Delegates from all four ASEAN states have met with Chinese officials, with each underlining the important economic and political association they hold with China, calling for stronger economic development and cooperation across various industries
• The timing of these political meetings is curious with this week being the lead up to the ASEAN Summit where leaders from all 10 ASEAN nations will gather, with the South China Sea dispute at the top of the agenda

24 April, 2013
Trade and Investment

China continues to be the economic powerhouse in the Asia-Pacific region constituting a significant partner with Outbound Direct Investment (ODI) into ASEAN countries nearly doubling in Q1 2013.

• China’s ODI in the first quarter of 2013 totalled US$23.8 billion being a 44% growth on the 2012 equivalent with ODI into ASEAN increasing by 99%, second only to ODI into US at 104%
• The importance of China and its economic influence was underlined by its effect on the 2013 Cambodian growth expectations which was lower than the average indicator over the previous decade with the slowdown explained by the drop in China’s investments and ongoing land acquisition disputes
• Why it matters: Asia-Pacific nations and ASEAN member states rely to a significant degree on China and its economic actions which is placing the 10-nation bloc in a precarious position with its dispute with China over the South China Sea conflict.

17 April, 2013
Trade and Investment

In spite of the growing tensions in the region between China and its neighbours, China still plays a significant role in investment in the ASEAN region.

• Several ASEAN members have conflicted with China following the aggressive stance taken by Beijing since the change in Chinese leadership, going as far as the Philippines having lodged an official complaint to the UN against Chinese intrusions and harassments in the disputed areas of the South China Sea
• Notwithstanding, China is a large integral component of ASEAN trade – reports coming from the Malaysia External Trade Development Corporation (MATRADE) show China being Malaysia’s largest trading partner since 2009 with trade in 2012 amounting to RM180.6 billion (US$59.5 billion); the inaugural China (Guangdong) – ASEAN convention brought US$10.4 billion worth of deals across a range of sectors
• Furthermore, innovation and development in China has been touted to solve the Philippines’ long standing rice shortage problem, with the country’s dependence on the import market for rice making it the world’s largest importer for rice.

17 April, 2013
Trade and Investment

ASEAN entities are set to contribute to infrastructure development in China

• Malaysian building company Giant Consolidated Limited has taken over the Thai-Laos-China Rail Project after the Chinese construction company pulled out of the joint partnership. Construction on the 418-kilometre railway is slated to begin later this year with the Malaysian company currently carrying out studies and environmental analyses.
• SM Prime, the largest mall development company in the Philippines, is set to invest PHP88 billion (US$2.1 billion) over the next 3 years to grow its portfolio across Philippines and China. The development company already owns 5 shopping malls in China with greater expansion into China in its horizon.

17 April, 2013
Foreign Affairs
The government’s top peace negotiator for ethnic conflicts Aung Min, is touring the United Kingdom this week to discuss Myanmar’s peacemaking efforts with former British Prime Minister Tony Blair, Foreign Secretary William Hague and other UK officials. Officials discussed how British experts could best support further progress in Myanmar. “We agreed on the need to take forward negotiations to achieve a permanent ceasefire in Kachin State, and to address the hostility behind the recent outbreak of anti-Muslim violence in Meiktila,” Hague said in the statement.

17 April, 2013
Foreign Affairs
The European Union is expected to lift all sanctions on Myanmar next week, except for an arms embargo, in recognition of the “remarkable process of reform” in the country. Last year the EU suspended most sanctions on Myanmar for one year, but is now expected to lift them permanently. The move, approved by EU ambassadors and is waiting ministerial approval, will allow European companies to invest in Myanmar.

17 April, 2013
Politics
Speaking to students at Tokyo University on Wednesday while on a visit to Japan, Aung San Suu Kyi made rare comments on sectarian violence in Myanmar, but said she was “not a magician” and will not be able to solve long-running ethnic disputes. She stressed the importance of establishing rule of law and added that Myanmar’s courts do not meet democratic standards as they are dominated by the executive.

16 April, 2013
Political Security

China looks to work with its ASEAN neighbours amidst growing tensions and conflicts, and instead shifts the blame onto the US for exacerbating the matter

• China’s Defence Ministry Spokesman Yang Yujun has indirectly shifted blame to the US for the growing tensions in the Asian-Pacific region, claiming that they stem from the US having emboldened these countries with its presence and support, influencing them in a time when political relations between China and the US have been strained.
• Despite the conflict and tension with its Asian-Pacific neighbours, China seems to be showing signs of cooperation, working together with the US, Philippines, Australia, Indonesia, Japan, Malaysia, New Zealand, Thailand, South Korea and Vietnam in a joint maritime military exercise to prepare for several disaster scenarios
• Further developing ties with ASEAN, this year marks the 55^th anniversary of diplomatic relations between China and Cambodia and has thus been dubbed “The Year of China-Cambodia Friendship” after Chinese leadership had recently met with Cambodian delegates to reinforce the all-around strategic cooperation partnership between China and Cambodia.

16 April, 2013
Foreign Affairs
Aid workers trying to address the needs of Myanmar communities affected by religious violence are hindered by intimidation, humanitarian officials say. A British government report on Myanmar said political progress has been made since democratic elections in 2010, though religious, political and civil rights were still under threat. Human rights organizations have questions regarding Myanmar’s commitment to reforms because of ongoing violence pitting Buddhists against the minority Muslim community.