When covering the Belt and Road Initiative (BRI), one of the regions that is not receiving enough attention in the European and Swedish media in general and economic and business publications is the ASEAN region (Association of Southeast Asia Nations).
A new report that was commissioned by the Singapore United Overseas Bank and compiled by the Hong Kong University Institute for Emerging Markets, deals with the impact of the BRI in the economic integration among these nations and, also between China and the ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam).
The 30-page report “The Belt & Road Initiative in ASEAN”, which was released in December 2020, gives a comparison between the Chinese investments in infrastructure especially and the rapid economic growth in these countries.
It also provides a list of ongoing Chinese Foreign Direct Investments (FDI) and construction projects in the region, and the roles played by the Chinese state-owned enterprises (SEOs) and private ones. One chapter deals also with the impact of the COVID-19 pandemic on these countries.
The report asserts that since the start of the Belt and Road Initiative (BRI), “Mainland Chinese foreign direct investment (FDI) and construction projects in countries in the Association of Southeast Asia Nations (ASEAN) have increased by 85% and 33%, respectively”. It adds that the growth, however, was concentrated in Indonesia, Malaysia, the Philippines, and Vietnam.
The report also indicates that although the BRI has a global reach and a wide scope, “ASEAN has been a high priority region of the Initiative since the start.”
Its conclusion is: “The BRI is supporting large scale infrastructure projects and promoting other dimensions of connectivity between mainland China and ASEAN countries, although it is too early to tell how BRI projects will shape the development trajectories of host countries. However, the scale and scope of BRI projects commands the attention of anyone who is on the lookout for profitable investment opportunities in one of the world’s most dynamic and fast-growing regions.”
However, the report has certain vague and blanket statements without much substantiation. For example, it states, without giving examples, that the COVID-19 pandemic, although effectively controlled in these countries, caused delays in landmark BRI projects (Page 10). Research by the Belt and Road Institute in Sweden (BRIX) shows, for example, that the work on the China-Laos railway continued unaffected, and in June 2020 the last of the 75 major tunnels were completed, paving the way to tracklaying and station building. Another example is the signing in October 2020 of the contract to build the China-Thailand high-speed railway project, another BRI flagship project.
Otherwise, the report provides an interesting map and a list of key BRI infrastructure projects that are undertaken in the ASEAN region (pages 14-15).
In discussions with economic experts, the Belt and Road Institute in Sweden (BRIX) was informed that other nations, besides China are benefiting from the opportunities provided by the availability of infrastructure such as power, transport, and supply chains in these regions as a result of the cooperation with China. These are Japan, South Korea, and Australia who are increasing their investments in these countries. European countries are encouraged to benefit from the opportunities provided by this emerging region.