China-ASEAN Monitor

Photo credit: AP

 

Economy, Investment and Trade

Singapore, Guangdong to tie up on high tech, smart cities
(24 August 2018) Fourteen Singapore companies signed agreements to partner with Chinese companies from the South China province of Guangdong to further cooperate in areas such as transport, education, training and professional services. The deals were signed during the Singapore-Guangdong Collaboration Councils (SGCC) ninth meeting on 24 August 2018 in Singapore. The agreement introduces new opportunities for Singaporean firms to develop its research and development sector, technology, smart cities development, transport and logistic, education and biomedical sciences in Guangdong. The Greater Bay Area project, which is a Chinese government’s scheme to link nine cities in the Guangdong Pearl River Delta Economic Zone with Hong Kong and Macau, is expected to lure in more investments opportunities and partnerships. Singapore-Guangdong bilateral trade saw an increase of 10.3 per cent year-on-year, peaking at US$29.7 billion in 2017. In terms of trade with Chinese provinces, Guangdong ranks as Singapore’s top trade partner.
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China-Myanmar Economic Corridor sets to export agricultural products once completed
(25 August 2018) According to Myanmar‘s Minister for Commerce, agricultural goods produced locally would be exported to the lucrative Chinese market via the proposed economic zones along the Myanmar-China border. At the moment, the Myitkyina economic development zone and Kan Paik Tee development zone are the two areas confirmed for the initiative. The Myitkyina development zone will serve as a livestock breeding sector, as well as an area for processing finished goods from the industrial sector, agricultural production, producing advanced construction materials and small-scale industrial materials. The Myitkyina economic zone will be developed with Chinese investments, spanning a land area of 4,000 acres and over a period of 15 years. It will be developed over a period of 15 years with its share ratio of 80 per cent for China and another 20 per cent for Myanmar.
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Thailand and China pledge to double bilateral trade by 2021
(25 August 2018) Thailand and China seek to boost bilateral trade and investment partnership from US$73 billion to US$140 billion by 2021 through Thailand’s flagship Eastern Economic Corridor (EEC) scheme and China’s Belt and Road Initiative. The US$45 billion EEC project under the Thailand 4.0 initiative aiming to develop its eastern provinces into a leading ASEAN economic zone. The new law providing tax breaks for investors in the EEC project is a centrepiece of Thailand’s policy to boost growth and target investments into hi-tech industries. It also enables investors to rent land for up to 99 years. Five Memorandums of Understanding (MOU) relating to the EEC were inked between both nations to foster significant strategic cooperation in Southeast Asia. Thailand’s Prime Minister’s Office minister also stated that a board would be formed to promote and facilitate the development of investments and all kinds of business activities. Currently, China is the fifth biggest investor in Thailand. In 2017, the bilateral trade volume between the two nations exceeded US$80 billion.
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The Philippines to accelerate Chinese-funded infrastructure projects
(25 August 2018) The Philippines and China have pledged to fast-track the implementation of Duterte administration’s infrastructure projects, which will be financed by the Chinese Official Development Assistance (ODA). Based on a remark by China’s Foreign Minister, the Manila-Bicol Railway and the Subic-Clark Railway projects have been moving rapidly, in line with the Philippine government’s objective to accelerate infrastructure spending. The construction of the north to south railways connecting Manila to Legaspi City will start once both nations agree on the terms of the US$2.83 billion loan, which is due to be signed by the end of 2018. In addition to that, the US$1.07 billion Subic-Clark Railway Project has moved closer to being rolled out after gaining approval by the National Economic and Development Authority-Investment Coordination Committee (NEDA-ICC) last year. Relations between China and the Philippines have warmed in recent times. Net foreign direct investments from China have soared by 534 per cent from January to May 2018 compared to the whole of 2017.
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Fashion retailers shift production to Cambodia and Vietnam as trade war escalates
(20 August 2018) Increased tariffs on Chinese products have given Cambodia and Vietnam the competitive edge for consumer-goods makers to shift their supply chains to these countries. Based on a research by the U.S. Fashion Industry Association on companies sourcing goods from China, 67 per cent are eyeing to decrease the value or volume of production in China over the next two years due to the U.S. trade protectionism. Vietnam’s relatively low inflation, the stability of the Dong and politics are attractive factors to foreign investment while Cambodia’s low-cost labour has garnered interests from investors to invest production capacity in Cambodia. However, labour productivity in Cambodia is lower than China’s, posing a challenge to the manufacturers to produce more elaborate products.
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