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Overview Of China-ASEAN Economic And Trade Relations, Opportunities And Challenges

--Remarks by H.E. Ambassador Huang Xilian, Chinese Ambassador to the Philippines

(From Chinese Embassy in Philippines)

2021-09-16 09:03

President & CEO Dante "Klink" Ang II, The Manila Times,
President Henry Lim Bon Liong, Federation of Filipino Chinese Chambers of Commerce and Industry Inc,
Secretary General Ruben Jimenez Pascual, Philippine Chamber of Commerce and Industry,
Dear Friends,
Ladies and gentlemen,

Good morning!

It gives me great pleasure to attend this forum. As one of the longest-running broadsheets in this country, The Manila Times has witnessed the development of the relations between the Philippines and its neighbors over the century, and has played a positive role in enhancing communication and exchanges between China and ASEAN, including the Philippines.

This year marks the 30th anniversary of China-ASEAN dialogue relations, and the Regional Comprehensive Economic Partnership(RCEP) is expected to take effect soon, this forum is highly relevant as it seeks to answer the calls of our time. On behalf of the Chinese Embassy in the Philippines, I would like to thank The Manila Times for the efforts in putting this meeting together. I look forward to our discussion on China-ASEAN cooperation and the RCEP's potential for common development into the future.

As the previous Chinese ambassador to ASEAN and the current ambassador to the Philippines, I had the honor to witness and facilitate the development of China-ASEAN mutually beneficial cooperation as good neighbors, and also the concerted efforts of China and the Philippines to promote and benefit from China-ASEAN relations.

Over the past three decades, China-ASEAN relations have developed by leaps and bounds. Among the ASEAN dialogue partners, China has created a number of "firsts": the first to join the Treaty of Amity and Cooperation in Southeast Asia, the first to establish strategic partnership with ASEAN, the first to discuss with ASEAN to establish free trade zone, the first to express clear support of the ASEAN's centrality in the regional cooperation, and the first to express its willingness publicly to sign the Protocol to the Treaty on the Southeast Asia Nuclear Weapon-free Zone. Our merchandise trade has skyrocketed 85 times since we established dialogue relations. The personnel exchanges exceeded 65 million in 2019. We have formed more than 200 pairs of sister cities. Through our joint efforts, China and ASEAN have become the largest trading partners, the most connotative partners, and the most dynamic strategic partners, and have served as an important pillar for peace, stability and prosperity in the Asia-Pacific.

After COVID-19 struck, our two sides have extended each other a helping hand and worked together to safeguard our pragmatic cooperation. China and many ASEAN countries have established fast tracks and green lanes to facilitate the movement of personnel and goods and stabilize regional industrial and supply chains. Against the backdrop of shrinking world trade, China-ASEAN trade and investment have bucked the trend and risen to a higher level in both scale and quality, providing strong support to regional economic recovery, as well as enriching and invigorating China-ASEAN community with a shared future.

Our bilateral trade reached a milestone in history. In 2020, China-ASEAN trade in goods reached US$684.6 billion. ASEAN surpassed the EU to become China's largest trading partner for the first time in history. China has been ASEAN's largest trading partner for the past 12 years in a row. In the first half of 2021, China-ASEAN trade totaled US$410.75 billion, up by 38.2% year on year and accounting for 14.7% of China's total foreign trade. China's exports to ASEAN reached US$225.83 billion, up by 38.3%, and imports from ASEAN reached US$184.92 billion, up by 38.1%.

Our two-way investment was booming. In 2020, China's direct investment in ASEAN reached US$14.36 billion, up by 52.1%, and ASEAN's actual investment in China reached US$7.95 billion dollars, up by 1%. According to preliminary statistics, in the first half of 2021, Chinese enterprises invested US$6.81 billion in ASEAN, and the bloc's actual investment in China was US$5.63 billion. As of June this year, accumulated mutual investment between China and ASEAN exceeded US$310 billion, with cooperation booming in sectors such as manufacturing, agriculture, infrastructure, high-tech, the digital economy, and the green economy. As our Belt and Road cooperation has continued to make headway, a number of major infrastructure projects have pressed ahead with growing regional connectivity.

Our regional economic integration further deepened. With the potential and dividend of China-ASEAN Free Trade Agreement and the upgrading protocol being unleashed, Lancang-Mekong cooperation and China-BIMP-EAGA cooperation have been deepened and substantiated. Thanks to the China-ASEAN Free Trade Area, which was fully established more than decade ago, 90% of our goods could be traded at zero tariff. We doubled our efforts along with other participating countries to sign RCEP in November last year, marking a new milestone in regional economic integration.

The progress of China-ASEAN relations and fruitful cooperation could not have been achieved without the joint efforts of ASEAN member states. Among which, the Philippines has worked closely with China and other parties and played a constructive role in advancing the relations between China and ASEAN throughout its three-year coordinatorship. Meanwhile, benefiting from the development of China-ASEAN relations, and under the guidance of President Xi Jinping and President Duterte, China and the Philippines have upgraded our ties to comprehensive strategic cooperation. China has become the largest trading partner, the second largest foreign investor, and the second largest source of foreign tourists of the Philippines. The synergies between the Belt and Road initiative and the "Build, Build, Build" program have strengthened, and our economic and trade cooperation has seen a stronger momentum.

Ladies and gentlemen,

China-ASEAN dialogue relations are standing at a new starting point in the year of the 30th anniversary, and we need to answer to the new requirements of building on past achievements and forging ahead into the future at a higher level.

We are currently in a world experiencing changes and a pandemic both unseen in a century, and the pandemic has added momentum to the impacts of the recent increase in protectionism on global industrial and supply chains. The instability and uncertainty facing China-ASEAN economic and trade cooperation are clearly on the rise.

Crisis breeds opportunities, and changes could herald new prospects. The greater the challenges we face, the greater the need for solidarity. We need to take initiatives cohesively and seek new opportunities through tiding over crisis. During the course of China-ASEAN relations over the years, we have always stood together with mutual support and cooperation, each crisis has led to closer ties and stronger cooperation between us.

The crucial and timely signing of RCEP, through our joint efforts of overcoming the challenge of pandemic with other members, is yet another telling example. As the first non-ASEAN participating country after Singapore to formally complete the approval process of RCEP, China has made full preparations for fulfilling its obligations under the agreement. Also, it's gratifying that all member countries of RCEP have expressed their resolve to ratify the agreement before the end of this year and push for its entry into force by January 1, 2022. It is said that the agreement was ratified by the Philippine government earlier this month, and is under deliberation at the parliamentary level. We will work with the Philippines and other member states to expedite their ratification processes for entry into force and implementation of the agreement as scheduled.

Under the framework of RCEP, a free trade area featuring the largest population, broadest commercial scale and greatest development potential would be established, covering roughly 30 percent of the world's GDP, trade and population. Here Comes the question How to realize the potential of RCEP?

First of all, we expect the RCEP to open a new chapter for China-ASEAN economic and trade ties. Once the agreement is implemented, China-ASEAN could further optimize their resource and market advantages through deep integration with the capital and technological advantages of other RCEP members on a larger scale and at a higher level. Thus, RCEP could lead to more promising prospects of our economic and trade cooperation, and promote the post-COVID-19 economic recovery of China and ASEAN.

Second, we expect the RCEP to add new vitality to East Asia economic integration. The agreement integrates and optimizes the region's economic and trade rules in a wide range of fields, including goods, services, investment, intellectual property rights, e-commerce and competition policy, which will further promote the integrated development of industrial chain, supply chain and value chain in the region. Hence the RCEP is expected to become a major platform for economic and trade cooperation in East Asia.

Third, we expect the RCEP to inject new impetus into promoting an open global economic and trade system, and to serve as leading drivers for maintaining free trade, multilateralism, and international cooperation.

Finally, we expect the RCEP to bring tangible new opportunities to the business community in this region, especially to create favorable conditions for those small and medium-sized enterprises(SMEs) so that they could better participate in regional economic and trade cooperation, and tap into markets in various countries by enjoying policy dividends of this agreement.

On top of that, the pandemic has inspired a surge in emerging industries and new businesses. Among which, the significance of digital economy is highlighted. Last year was designated the China-ASEAN Year of Digital Economy Cooperation. China is leading in the development of digital economy, and ASEAN has seen its digital economy industry booming in recent years. The two sides are likely to see the combined value of their digital economies reach US$9.58 trillion by 2025. We should work together to seize the opportunities and intensify cooperation on digital technologies in epidemic prevention and control, digital infrastructure development, e-commerce, smart city, and other areas, so as to nurture new drivers for our economic and trade cooperation, advance digital connectivity and build a digital Silk Road.

Ladies and gentlemen,

The darkest hour will pass. Looking ahead, we can see light and hope. I believe with our concerted efforts, we will win a full victory against the virus and see a full recovery of our economies at an early date. Looking ahead, with sustaining highly complementary advantages for development and deeply integrated industrial and supply chains, China-ASEAN economic and trade cooperation is expected to have enormous space for further development in the post-pandemic era. China is ready to match ASEAN's economic recovery measures, including the ASEAN Comprehensive Recovery Framework. China will also work together with ASEAN to further enhance regional connectivity, create more dividends of the upgraded China-ASEAN Free Trade Area and promote the early entry into force of RCEP. Efforts will also be made to develop new cooperation areas such as digital economy and strengthen cooperation for sustainable development. Let's step up our efforts to deepen our pragmatic cooperation, lay a solid foundation for the building of a China-ASEAN community with a shared future, and deliver more benefits to people in the region.

Thank you.

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