Photo credit: Reuters
Economy, Investment and Trade
Indonesia proposes BRI investments worth US$91.1 billion
(20 March 2019) Indonesia presented a menu of 28 projects with a combined value of US$91.1 billion to Chinese investors during a Belt and Road Initiative (BRI) forum held in Bali on March 20-21, according to Indonesian coordinating maritime affairs minister Luhut Pandjaitan. Out of the 28 projects, he expected at least two to three projects to be signed. While Luhut declined to elaborate on the details of the projects, he provided that the projects will be developed in four locations — North Sumatra, North Kalimantan, North Sulawesi and Bali — under the country’s the Regional Comprehensive Economic Corridor. However, he stressed that Chinese investors will be required to meet four conditions in order for projects to proceed, i.e., (i) they can use only environmentally-friendly technologies, (ii) local labour use must be maximised, (iii) investors must transfer knowledge to local labour through capacity-building programmes, and (iv) projects must help reduce the country’s reliance on extractive industries and benefit the economy in the long run. It has been argued that Indonesia could benefit from the ongoing US-China trade war as Chinese companies seek a destination to relocate their businesses to.
Chinese and Japanese firms invited to invest in Thai EEC megaprojects
(23 March 2019) A delegation of 200 Japanese and Chinese firms will visit Thailand on April 2 to review five proposed investments under the Eastern Economic Corridor (EEC) and attend business matching events in Bangkok, according to EEC Office secretary-general Kanit Sangsubhan. Kanit provided that the delegation’s primary agenda will be to consider investing in five key EEC infrastructure projects either through solo bids or consortiums. The five projects comprise a high-speed rail connecting three airports; Map Ta Phut industrial port; Laem Chabang maritime port; an integrated MRO (maintenance, repair and overhaul) facility; and U-Tapao international airport. Together, these five projects are worth approximately US$30 billion and are expected to create 475,668 new jobs. Furthermore, the Japan Bank for International Cooperation (JBIC) will reportedly offer financing for both Japanese and Chinese companies participating in these projects in the three EEC provinces of Chachoengsao, Chon Buri and Rayong. Following the announcement of the country’s preliminary election results on March 25, Deputy Prime Minister Somkid Jatusripitak assured the public that major investment projects such as the EEC will proceed despite the impending change in government.
Malaysia to finalise deal on China-backed ECRL project by early April
(23 March 2019) Malaysia is looking to finalise negotiations on the East Coast Rail Link (ECRL) with China on April 2, according to the country’s lead negotiator Daim Zainuddin. The rail project was originally billed at US$20 billion, and was suspended in July due to concerns over costs. Daim was quoted by The Straits Times saying that the revised terms would save billions for the country and carry commercial benefits for the country. Separately, Malaysian Prime Minister Mahathir Mohamad said that the country may also consider procuring fighter jets from China or other countries if the European Union proceeds with the ratification of its proposed palm oil restrictions. He added that another consideration for doing so was because Chinese aviation technology has surpassed Western technology.
Cambodian PM insists that Chinese investments are not a form of colonisation
(22 March 2019) Cambodian Prime Minister Hun Sen denied that Chinese investments are a form of colonisation and that the country would not allow this to happen even if colonisation was indeed Beijing’s intention, according to an AFP report. Hun Sen’s remarks were made during the breaking ground ceremony of the US$2 billion Chinese-funded Phnom Penh-Sihanoukville expressway, constructed by the China Road and Bridge Corporation under the Belt and Road Initiative (BRI). Also in attendance at the ceremony was Chinese vice foreign minister Kong Xuanyou, who reiterated China’s stance that their aid and investments were neither threats nor traps. Similarly, Philippines’ President Rodrigo Duterte again denied that Chinese loans were disadvantageous to the country and that it was not possible for China to seize the Philippines’ natural resources because the country will repay its loans. Duterte’s comments were made in response to domestic concerns over China’s ability to seize the Philippines’ gas fields which the government had earlier provided as collateral for the US$62 million Chico dam loan.
Myanmar’s broken rice, livestock border exports face legal barriers
(22 March 2019) China began the suspension of broken rice imports from Myanmar in the third week of March as part of its crackdown on illegal rice trading at the Myanmar-China border, according to the Myanmar Rice Miller Association. Rice merchants involved in the trade were quoted by Myanmar Times saying that they opted for illegal means because of tight volume restrictions and high tax rates imposed by the Chinese government. Presently, China imposes a 5% tax on broken rice exports and 50%-60% tax on rice exports. The challenges come despite the Myanmar government’s previous request for China to increase its rice import quota to 400,000 tonnes from the present 100,000 tonnes. More recently, Myanmar’s Fruit, Flower and Vegetable Producer and Exporter Association said that it hopes to obtain permits from China for eight more types of crops so that more of the country’s agricultural products can be traded legally at the border. The eight types of agriculture products are avocado, pomelo, banana, pineapple, elephant foot yam, jackfruit, rambutan and lemon.