Affected by the COVID-19, both international relations and the industry structure are confronted with new changes. Ms. Aksornsri Phanishsarn, Adviser to the Senate Foreign Relations Committee of Thailand and Associate Professor at the Faculty of Economics at Thammasat University, indicated that China and ASEAN will have a more intimate relationship after the epidemic. Under this backdrop, Thailand needs to pay attention to digitalization and diversification of cooperation to seize opportunities brought by China’s development. Aksornsri Phanishsarn is an expert on China’s economy and the editor of The Rise of China: Ambitious and Forward-Looking.
A closer China-ASEAN relations after the epidemic
Aksornsri Phanishsarn said that the COVID-19 would undoubtedly pose a threat to the process of globalization, so regional integration would be increasingly crucial and become the general direction of future development.
Trade frictions between China and the United States have forced major adjustments in global supply chains, accelerating the fragmentation of supply chains between the two countries. China’s reliance on trade with the U.S. has been further reduced to limit the risk of trade friction. And these will likely further deepen economic and trade cooperation between China and ASEAN as well as other regions.
It was reported ASEAN surpassed the EU and became China’s largest trading partner in the first three months of 2020, which demonstrated the tremendous energy under China-ASEAN economic and trade cooperation.
China’s massive blueprint for building a “Digital Silk Road”
To advance the construction of the Belt and Road, we can not only push the building of the Silk Road by Land and Sea, but also depict a “Digital Silk Road” to lay a solid foundation for bilateral cooperation in digital economy.
Nowadays, the Chinese is no longer satisfied with outbound tourism and China’s enterprise is not just engaged in product export or overseas market development. Various platforms, such as Alibaba’s E-commerce platform Lazada and short video social platform TikTok, are also going abroad smoothly.
In addition, to adapt to the development of the digital economy and smooth the path to the internationalization of the renminbi (RMB), China has begun piloting its new digital currency in four major cities. There was also a proposal to create a new digital currency proposed by China’s members of the national committee of CPPCC in 2020. The proposed stabilisation currency, backed by four major Asian currencies — RMB, the Japanese Yen, the Korean Won and the Hong Kong Dollar — is undoubtedly a useful attempt to build a “Digital Silk Road”.
“If we have an in-depth understanding of global pattern in the post-COVID-19 era and the development situation of China’s digital economy, it is easy to understand why the key to developing Thailand-China relations is to seize opportunities brought by China’s development and achieve mutual benefit and win-win results,” said Aksornsri Phanishsarn.
To seize opportunities from two critical points
In terms of its long-term economic potential, China is not only particularly important to Thailand’s economic growth, but also the strongest engine of global economic growth. The COVID-19 may dispirit China’s short-term economy, however, in the upcoming five to ten years, the “Chinese Century” will be seen.
Aksornsri Phanishsarn believed that to keep up with the development of China, a policy of “turning China into an opportunity” must be adopted. There are two key points. One is digitization. Thailand should take the initiative to make adjustments to adapt to digital changes and learn from China’s advanced technologies. The other is diversification. Thailand should pursue balanced development by adjusting its export structure to China to spread risks and avoid over-relying on China.
For that to happen, Thailand and China should cooperate in digital economy. Recently, Thailand issued government bonds to the public through an App for the first time. The Central Bank of Thailand will develop a prototype of Central Bank Digital Currency (CBDC) based on the Inthanon project. Since the two countries are developing in the same direction, it is believed that the two sides will further strengthen cooperation in digital economy as 2020 marks the Year of China-ASEAN Digital Economy Cooperation.
Aksornsri Phanishsarn also thought that one of the ways to turn China into an opportunity is to engage in digital technology exchanges and learning. Now many Chinese high-end technological companies are aiming at the Thai market, like Huawei and Xiaomi, which have set up their regional headquarters for Southeast Asia in Bangkok. In addition, Tencent and Alibaba have also entered the Thai market.
Speaking of investment, Thailand is vigorously promoting the construction of the Eastern Economic Corridor (EEC) in order to welcome China’s advanced technology and exchange and cooperation projects between start-ups of the two countries. Of course, Thailand will need to build up its talent pool in language and digital technology if Thailand wants to seize China’s development opportunities by tapping into the digital economy. Specifically, Thai tourism platforms can join hands with the most popular platforms among Chinese people, and translate the tourism content in Thai into Chinese. For example, the online review platform Wongnai is suggested to provide services in Chinese when Chinese netizens seek advice online. This can also promote the transformation and upgrading of Thai tourism since China has formally entered the digital era.
As we approach the new normal in the post-COVID-19 era, Thai enterprises, which relied more on China in the past, should be psychologically prepared not to blindly pursue “recovery as before”, especially as the Chinese tourist market may not recover in the short term. At this time, Thailand should take advantage of opportunities brought by China’s development and pay more attention to the quality of tourists rather than the number of tourists, especially China’s high-end tourists and the elderly group who focus on wellness tourism.
In addition, the diversification of bilateral cooperation also includes the adjustment of the structure of imports and exports. Aksornsri Phanishsarn said, in the past, most of China’s imports from Thailand were raw and semi-raw materials for further export processing. In the future, Thai companies may struggle if they want to maintain their traditional trade model with China. To this end, it is recommended that Thailand should make major structural adjustments and focus on exporting finished products such as beauty products, jewelry and ornaments to China through E-commerce channels.
At last, Aksornsri Phanishsarn stressed that in the future, China and Thailand should help each other go forward and make progress together. It is essential for Thailand to adopt a cautious attitude to seize chances created by China’s booming development, but not to blindly follow suit or arbitrarily reject changes.
“Only when we know about China from all angles and keep a balanced relationship with China, can Thailand embrace digitization and diversification and both sides achieve mutual benefit and win-win results,” said Aksornsri Phanishsarn.
Source: Thailand’s TAP
Editor in Charge: Li Min