Rise to a New Level for ASEAN-China Cooperation in the Post-Pandemic Era: Turning Crisis into Opportunities

By Li Hao

ASEAN and China have achieved fruitful results in various fields since the bilateral dialogue relations have been established in 1991, laying a solid foundation for building a community with a shared future. Facing the great changes not seen in a century intertwined with the epidemic in the century, only by strengthening closer cooperation can ASEAN and China maintain their economic growth and social development and get out of the economic downturn.

Joint fight against COVID-19 strengthens ASEAN-China relations

The outbreak of the COVID-19 will not only reshape permanently the future pattern of the world but also have profound effects on the bilateral relations between China and ASEAN. During the pandemic, China and ASEAN have jointly played a vanguard role in the international synergy by standing shoulder-to-shoulder to combat the pandemic, stabilizing the economy, and ensuring the well-being of people. Thanks to the joint efforts, the China-ASEAN economic and trade cooperation has increased despite the pandemic. ASEAN, being China’s largest trading partner for the first time in the first quarter of 2020, serves as the new development powerhouse in building a closer China-ASEAN community with a shared future and elevates the bilateral strategic partnership to a new height. 

2021 marks the 30th anniversary of China-ASEAN dialogue relations. Over the past three decades, the China-ASEAN relationship has become the most dynamic and the most profound one among ASEAN’s relationships with dialogue partners. It has not only given a strong boost to the self-development of China and ASEAN but also made a great contribution in creating the cutting-edge regional governance paradigm based on ASEAN centrality. In the post-pandemic era, China will continue to prioritize ASEAN as the direction in the neighboring diplomacy while classifying ASEAN into a key region under the high-quality joint construction of the “Belt and Road” Initiative.

Cooperation enhancement: an invaluable experience amid the common crisis

Reviewing the course of China-ASEAN relations over the years, one may come to be aware that it features a noticeable crisis-driven bilateral cooperation. Representing the most challenging public health emergency all around the world, this pandemic has proved to be a major test for the world’s capacities in the emergency response, in which China and ASEAN have passed the major test leaving far more extraordinary achievements than western counterparts. Consequently, rather than thwart further development in cooperation within East Asia, the COVID-19 has empowered the East Asian countries including China and ASEAN to stay more committed to regional cooperation to confront the shared problems and challenges head-on

Rethinking the status quo with a global-focused mindset, one may assume that we live in an era when traditional and non-traditional security issues are entwined, and when local issues easily become global and vice versa. No country can stay immune from the crisis or address all challenges on its own. Standing in solidarity to combat the pandemic, China and ASEAN have marched worldwide to convey a message that only by pulling together through adversity can we roar toward a shared future. 

Cooperation enhancement: a panacea for the economic doldrums

Striking Southeast Asia earlier, the COVID-19 has battered its economy out of some key service sectors, namely, tourism, air transportation, hotels, catering, retail, which has produced a far-reaching and extensive impact. As a result, three major chains — industry, supply, and trade chains connecting the North America Economic Circle, EU Economic Circle and East Asia Economic Circle — have been disrupted. The financial market has swung wildly, forcing a flock of businesses to go bankrupt, amid the accelerating flight of foreign capital and soaring unemployment rate. As a result, the world’s leading credit rating agencies have been lining up to lower their expectations for economic growth in ASEAN. Southeast Asia, on the other hand, has played a vanguard role in combating the COVID-19 following a shared commitment to outperform its counterparts globally. In contrast to India and Brazil — the major emerging economies, ASEAN’s economic recovery is projected to get back on track toward a sound and escalating development. By 2021, the emerging ASEAN’s GDP is expected to grow by 6.2%, outperforming its European and American Counterparts amid economic recovery, according to the “Global Economic Outlook 2020” published by the IMF.

Not only is China among the earlier batch to get the pandemic under full control and proceed to the stage of work resumption, but it is the only major economy to achieve positive economic growth. Under the current circumstances, numerous ASEAN corporations seek opportunities from the Chinese market in hopes of catalyzing their economic recovery. In retrospect, the past three decades have witnessed increasingly closer economic and trade ties between China and ASEAN, namely: the commencement of negotiations on a bilateral free trade agreement (FTA) in 2003, the full establishment of ASEAN-China FTA in 2010, and the full implementation of the Free Trade Area Upgrade Agreement in 2019, which results in a geometric increase in bilateral trade, or a great leap from US$ 8 billion in 1991 to US$ 684.6 billion in 2020. Making its debut in 2013, the Belt and Road project has gradually evolved as a major source of foreign investment in ASEAN and a principal engine of economic growth. It therefore follows that China and ASEAN, sharing common interests, have long established a community entwined with integrated development and interdependence. The commercial engagement between China and ASEAN has been further enhanced despite the challenges caused by the pandemic, behind which a profound economic logic underpins: the unimpeded flow of goods and materials, complementary industrial structures, and well-coordinated policies. Based on these prerequisites, bilateral trade keeps expanding. In the post-pandemic era, China and ASEAN, further expanding the positive spillover effects of cooperation and upgrading the bilateral cooperation, must also make every effort to catalyze the recovery of the regional economy and social prosperity.

Cooperation in post-pandemic era: priority areas and advice

Non-traditional security. The security community is the guarantee for building a China-ASEAN community with a shared future. Since the implementation of the Belt and Road initiative in Southeast Asia, the biggest security threats faced are not from traditional security threats, but from more complex, more concealed, and more insidious threats. The predicted non-traditional security threats, in particular, include non-traditional security issues dominated by natural disasters, poverty, corruption, public health security, drug trafficking, and transnational and cross-border crimes. At the same time, the demands of ASEAN countries to strengthen cooperation with China in non-traditional security fields have become stronger in recent years. In the post-epidemic era, strengthening public health security cooperation and improving regional governance will become a new growth point for China-ASEAN non-traditional security cooperation.

The second wave of new crown pneumonia has struck, and the mutation of the new virus once again poses serious threats and challenges to the health of the global people and economic recovery. Therefore strengthening the prevention and control of the epidemic and speeding up the development and production of vaccines are the primary tasks facing all countries and the key to the final decision on whether the epidemic can be overcome. In the post-epidemic era, China should give priority to the needs of ASEAN countries, actively cooperate with ASEAN countries in vaccine research and development, and take practical actions to promote the availability and affordability of vaccines and help ASEAN overcome the epidemic. Second, we should establish a sound China-ASEAN public health security cooperation management system, implement the rotating chair system, and make decisions on major issues through voting. Thirdly, China should propose to start the China-ASEAN Public Health Emergency Liaison Network with ASEAN as soon as possible, organize China-ASEAN public health executive training courses and other projects to assist ASEAN countries in strengthening capacity building. 

Digital economy. The continuous emergence of new industries, new formats, and new models of the digital economy has become an important engine for promoting economic recovery since the outbreak of the new crown pneumonia epidemic. This has made China and ASEAN countries once again deeply aware of the importance of the digital economy in enhancing the development resilience of the region. The development of the digital economy in the post-epidemic era will undoubtedly become an important starting point for governments of various countries to cultivate new economic momentum around the new round of technological and industrial commanding heights, and will inevitably become the most dynamic growth point in China-ASEAN economic and trade cooperation. 

Value chain. The sudden new crown pneumonia epidemic has fully exposed the fragility of the industrial chain, supply chain and value chain under economic globalization, and the restructure will become inevitable. From the perspective of the value chain, bilateral trade between China and ASEAN is based on value chain trade characterized by intermediate products and dominated by multinational companies, as an important node in the global value chain and regional production network. In the import and export trade structure between China and ASEAN, the trade of intermediate products accounts for more than 60%, and the trade of intermediate products mainly come from intra-company trade in the regional production network of multinational companies. In the post-epidemic period, if multinational companies seek to return all global value chains and regional production networks to their homeland, it will inevitably have a certain impact on China-ASEAN economic and trade relations dominated by multinational company value chain trade.

Technological innovation. With the new round of scientific and technological revolution profoundly reshaping the world economy and competitive landscape, competition among countries is more manifested as competition between innovation capabilities and innovation systems. The technological innovation cities among RCEP member states, represented by Beijing, Tokyo, Shanghai, Seoul, Singapore, Hong Kong, Sydney, and Shenzhen have entered the forefront of global innovation strategies and directly contributed to the global high-level technological innovation, accounting for 10.2% of the global proportion. Meanwhile, the influence of Chengdu, Wuhan, Bangkok, and Kuala Lumpur in the global innovation network is also rapidly increasing. Undoubtedly, technological innovation has become a new content and new engine for China-ASEAN cooperation to a higher level, and building a China-ASEAN innovation community is also an important part of promoting RCEP regional cooperation, which is conducive to giving play to their respective comparative advantages, optimizing the allocation of innovation resources, and enhancing regional technological innovation capabilities and industrial competitiveness. 

· Author: Dr. Li Hao, Director of the Public Administration Department of Chengdu Academy of Governance