A New Journey for China-ASEAN Relations

Xu Bu & Yang Fan

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A New Journey for China-ASEAN Relations

Xu Bu & Yang Fan

Xu Bu is Chinese Ambassador to ASEAN. Yang Fan is an assistant research fellow at the Wuhan University China Institute of Boundary and Ocean Studies.

On December 31, 2015, the Association of Southeast Asian Nations officially completed the building of the ASEAN Political-Security Community (APSC), the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Community (ASCC). These represent new milestones in the development of ASEAN and a new chapter in China-ASEAN relations. Standing at a new historical starting point, China and ASEAN should seize the opportunities, meet challenges and comprehensively deepen their practical cooperation for mutual benefit and to forge an even closer “China-ASEAN Community of common destiny.”

Fruitful Results of China-ASEAN Cooperation

Since the start of the dialogue process in 1991, China and ASEAN countries have joined hands and broken new ground on the path of relations featuring win-win cooperation, good-neighborliness, friendship, mutual trust and mutual benefit. Their relations have been elevated from a dialogue partnership to a strategic partnership. Bilateral trade and investment are growing rapidly and practical cooperation in all fields has yielded fruitful results.

Cooperation in political security is deepening.

The dialogue mechanism should be improved and sound strategic planning should be made. China and ASEAN have common objectives inpursuing their own development, common interests in upholding regional peace and stability and common positions in international and regional affairs. Since the establishment of the China-ASEAN strategic partnership, China has been giving priority and is committed to deepening its goodneighborly friendly and cooperative relations with ASEAN. Of ASEAN’s partners, China was the first to join the Treaty of Amity and Cooperation in Southeast Asia, the first to establish a strategic partnership with ASEAN, the first to give clear support to the Southeast Asian Nuclear-Weapon-Free Zone Treaty and the first to confirm it would build a free trade area with ASEAN. The two sides have a complete dialogue and cooperation system, covering leaders, ministers and senior officials. China and ASEAN reached the Plan of Action to Implement the Joint Declaration on the China-ASEAN Strategic Partnership for Peace and Prosperity (2016-2020) in November 2015, drawing a blueprint for China-ASEAN relations over the next five years. Multi-tiered exchanges and practical cooperation have provided an important platform for deepening mutual trust and laid a solid foundation for the sound and stable development of relations.

Security cooperation should be utilized to enhance mutual trust. In recent years, security cooperation has grown to be an important part of China-ASEAN cooperation to deal with non-traditional security threats in the region. The two sides keep expanding their military and defense exchanges and engage in exchange events of different forms under the framework of ASEAN-China (10+1), ASEAN Regional Forum (ARF), ASEAN-Plus Defense Ministers’ Meeting (ADMM-Plus) and ASEANChina, Japan and South Korea (10+3). In 2011, the defense ministers of China and ASEAN held exchanges for the first time. 2015 witnessed the first ASEAN-China Defense Ministers Informal Meeting and the ASEANChina Ministerial Dialogue on Law Enforcement and Security Cooperation. The two sides have held the ASEAN Plus China Ministerial Meeting on Transnational Crime (AMMTC + CHINA) every two years since 1997 and signed the ASEAN-China Memorandum of Understanding on Cooperation in the Field of Non-Traditional Security. Under this mechanism, the twosides have maintained close cooperation in combating drug trafficking, illegal migration, pirates, terrorism, arms smuggling, money laundering and international economic and cyberspace crimes. Chinese Premier Li Keqiang proposed at the 18th China-ASEAN Summit to jointly elevate security cooperation, noting that China hopes to see the current informal defense ministers’ meeting institutionalized at an early date, and wishes to explore with ASEAN a direct line between Chinese and ASEAN defense authorities and set up a China-ASEAN law-enforcement academy in due course. He suggested that China would provide 2,000 training opportunities for the law-enforcement agencies of ASEAN countries in the next five years and the two sides step up cooperation in non-traditional security fields such as crossborder crime, counterterrorism and disaster management.

The South China Sea issue should be managed and differences should be properly handled. China and ASEAN countries signed the Declaration on the Conduct of Parties in the South China Sea (DOC), demonstrating their commitment to a stronger partnership and mutual trust and peace and stability in the South China Sea. They agreed on the guidelines for followup actions in the implementation of the DOC in July 2011. Two informal consultations on a Code of Conduct (COC) were conducted by the two sides in 2012 and COC consultations were officially launched in 2013. China and ASEAN have held several senior officials’ meetings and joint working group meetings on the COC implementation in which they adopted the first list of commonalities on COC consultation, agreed to establish a hotline for maritime search and rescue among China and ASEAN member states and a hotline among foreign ministries on maritime emergencies as the early harvest of the COC. By December 2015, the two sides had held 10 senior officials’ meetings and 15 joint working group meetings on the implementation of the DOC and adopted the second list of commonalities on COC consultations and the Term of Reference of the Eminent Persons and Experts Group (EPEG). At present, the two sides are working steadily on the basis of two preliminary leaving documents, namely, the list of crucial and complex issues and the list of elements for the outline of a COC, whichwere reached at the 10th Senior Officials’ Meeting on the Implementation of the DOC. Premier Li Keqiang put forward five proposals for the resolution of the South China Sea issue.

The ground breaking ceremony of Jakarta-Bandung high-speed railway project was held in Walini, West Java province, on January 21, 2016.

Economic and trade cooperation is booming.

Development strategies should be synergized between China and ASEAN. Given that both China and ASEAN countries are at a critical period of development, it serves the common interests of all parties to promote their development by deepening China-ASEAN cooperation. China will begin implementing its 13th Five-Year Plan (2016-2020) on economic and social development, which will guide China’s future development through innovative, coordinated, green, open and shared development with the view to building a well-off society by 2020. ASEAN has issued the ASEAN Community Vision 2025 and blueprints for the ASEAN Political-Security Community (APSC), the ASEAN Economic Community (AEC)and the ASEAN Socio-Cultural Community (ASCC). ASEAN is faced with the pressing tasks of accelerating development, narrowing gaps and improving people’s livelihoods. The next five years will present precious historical opportunities in synergizing development strategies between China and ASEAN and among ASEAN countries and witness a higher level of development and the attainment of the goal of completing the building of the East Asia Economic Community by 2020.

The China-ASEAN FTA should be upgraded. ASEAN is China’s largest trading partner of developing countries and a major region for Chinese businesses to go to. The China-ASEAN FTA is the first FTA China discussed with other countries. The building of the FTA was completed in January 2010, bringing about rapid growth in bilateral trade. The FTA benefits a population of 1.9 billion and creates $4.5 trillion in trade volume. The two sides grant zero tariffs to over 90 percent of each other’s products. China’s tariff rate on ASEAN goods was cut to 0.1 percent from 9.8 percent and the average rate of the six founders on Chinese goods dropped to 0.6 percent from 12.8 percent. Through negotiations on upgrading the FTA launched in September 2014, China and ASEAN signed the China-ASEAN FTA Upgrading Protocol in November 2015 which injected new momentum into their bilateral trade relations by improving the original agreement. This will give a strong boost to the efforts to attain the goal of a trade volume of $1 trillion.

The China-ASEAN Expo should be made full use of. At the 7thChina-ASEAN Leaders’ Meeting in October 2003, Premier Wen Jiabao proposed holding a China-ASEAN Expo in Nanning, the Guangxi Zhuang autonomous region, every year from 2004, which was well-received by the leaders of the ASEAN countries. The Expo is co-hosted by China’s Ministry of Commerce, the economic and trade authorities of the 10 ASEAN countries and the ASEAN Secretariat, its purpose is to “Promote China-ASEAN FTA Building and Jointly Enjoy Cooperation and Development Opportunities,” and covers cooperation in goods, trade in services and investment. To date, 12 Expos have been successfully held simultaneouslywith the China-ASEAN Business and Investment Summit, which has become an important platform for China and ASEAN to conduct allaround economic and trade cooperation. With the theme of building the 21st Century Maritime Silk Road and creating a new blueprint for maritime cooperation, the 2015 Expo held events in production-capacity cooperation for the first time in order to enhance cooperation in production capacity, equipment manufacturing, technology transfer and financial services.

As economic integration deepens, China and ASEAN are cooperating in 11 major fields: agriculture, IT, human resource development, investment, the Mekong river development, transport, energy, culture, tourism, public health and environment. China supports the implementation of the Master Plan on ASEAN Connectivity, and is exploring the establishment of a pool of small- and medium-sized projects for China-ASEAN connectivity and is ensuring the proper use of $10 billion in preferential loans and the $10 billion China-ASEAN special infrastructure loans. The Chinese government has set up a China-ASEAN Maritime Cooperation Fund of 3 billion yuan to encourage and support the launch and development of key cooperation projects.

Remarkable results have been made in people-to-people and cultural exchanges.

Cultural exchange activities have increased considerably. As their strategic partnership deepens, China and ASEAN have reached several important agreements and specific plans on strengthening social and cultural exchanges and conducted activities in various forms. The two sides signed a memorandum of cooperation on cultural cooperation in 2015, identifying the framework for cultural cooperation. The first Meeting of China-ASEAN Ministers Responsible for Culture and Arts (AMCA+China) was held in Singapore in 2012, mapping out the direction of cultural cooperation. 2014 was designated the ASEAN-China Cultural Exchange Year with the theme of “Our Culture, Our Future,” encompassing 20 priority activities in culture, sports, film, tourism and youth and demonstrating the all-around people-to-people and cultural exchanges between China and ASEAN. Atthe 2nd AMCA+China in 2014, the Action Plan of China-ASEAN Cultural Cooperation (2014-2018) was signed, pointing the way for the next five years’ cultural cooperation and signaling the all-around development of bilateral cultural cooperation.

Education cooperation has entered a new stage. At present, 180,000 students are studying in each other’s countries. The two sides are implementing the Double 100,000 Students Plan which aims to send 100,000 students to each other’s countries by 2020. The Chinese government has decided to provide 15,000 government scholarships for ASEAN countries. China has held eight China-ASEAN Education Cooperation Weeks and set up China-ASEAN education cooperation platforms. China’s universities have majors for the languages of all ASEAN countries. A China-ASEAN Chinese Language and Culture Education Base has been set up in Tianjin International Chinese College and 29 Confucius Institutes, 15 Confucius Classes and Chinese Cultural Centers have opened in ASEAN countries. The Chinese government has built 10 China-ASEAN education and training centers in several fields. The exchanges between vocational education agencies and academic colleges are expanding. The Secretariat of the ASEAN-China Network for Cooperation and Exchanges among Engineering and Technology Universities (ACNET-EngTech) based in Tianjin University provides more platforms for the bilateral cooperation and exchanges.

People-to-people and cultural exchanges are richer in content. China and ASEAN countries consider the exchanges between their young people, women, scholars, diplomats, think tanks and media organizations as an important pillar to enhance mutual understanding and trust. The activities of ASEAN students in China, the China-ASEAN Disability Forum, and media mutual visits and interviews of ASEAN ambassadors in China have produced remarkable effects. Tourism is also a key area of China-ASEAN close exchanges. The number of two-way visits is expected to reach 20 million. The two sides have tried new ways of exchanges, improved their understanding of each other’s tourism markets, developed new products with main tourismmedia and businesses and held capacity building seminars for tourism practitioners. At the 18th China-ASEAN Summit, Li Keqiang proposed the establishment of exchange mechanisms between tourism authorities.

Green development is drawing increasing attention. Positive progress is being registered in cooperation in the management of water resources, climate change, biodiversity protection and environmental protection technology. The China-ASEAN Strategy on Environmental Protection Cooperation (2009-2015) was adopted by the two sides in 2009, identifying key cooperation areas. The Chinese government approved the China-ASEAN Environmental Cooperation Center in 2011 and the Center, officially launched the same year, adopted the ASEAN-China Environmental Cooperation Action Plan (2011-2013). Five ASEAN-China Environmental Cooperation Forums have been held according to the Action Plan, during which the two sides have engaged in in-depth discussions on environmental protection and sustainable development. The China-ASEAN Public Health Cooperation Fund was established to step up exchanges, dialogue and communication, and monitor cross-border infectious diseases and avian influenza in order to jointly address public health challenges. Li Keqiang proposed at the 18th China-ASEAN Summit the holding of the first China-ASEAN Health Cooperation Forum in 2016.

Opportunities and Challenges of Deepening China-ASEAN Cooperation

Through the past 25 years of continued dialogue and deepening reform, China and ASEAN have built solid foundations for political mutual trust. China, as always, upholds the neighborhood diplomacy principles of amity, security and prosperity, respects ASEAN countries’ independent choices of development paths and values, supports ASEAN in resolving differences and disputes in its own way and opposes external forces intervening in its internal affairs. The ASEAN countries follow the one-China policy, support China’s peaceful reunification, and accommodate China’s concerns on majorissues of principle involving China’s sovereignty. On the basis of the principle of mutual respect and non-interference, the two sides have enhanced their mutual political and strategic trust. China and ASEAN have established complete dialogue and cooperation mechanisms at different levels and in all fields. These have boosted the mutual understanding and trust between the two sides and laid solid foundations and provided strong guarantees for the sound development of bilateral relations. On the South China Sea issue, China proposes that the parties concerned resolve their disputes through direct consultations and negotiations and relevant parties jointly exploit the South China Sea before the dispute is resolved. At present, China and the ASEAN countries are committed to the effective implementation of the DOC and the negotiations on the COC. Thanks to the concerted efforts of all parties, positive progress has been made in the negotiations on the COC. All parties agreed to reach the COC at an early date on the basis of consensus and forged an important consensus on “early harvest.” These efforts and achievements show the confidence and resolution of China and ASEAN to address sensitive disputes though friendly negotiations and consultations.

The Belt and Road Initiative and international cooperation in production cooperation have injected new impetus into bilateral economic and trade cooperation. China and ASEAN enjoy geographical proximity, close economic and trade links and strong economic complementarily, and thus have a good foundation for cooperation in production capacity. China is a big country in the industrial sector with strength in equipment, technology, engineering, capital and managerial expertise, making China rank the first in the output of over 220 industrial products. The ASEAN countries are pushing ahead with industrialization and urbanization and thus strong demand for equipment, technology and capital. China and ASEAN can conduct production-capacity cooperation with ASEAN in electricity, machinery, building materials and telecommunications. ASEAN is the priority area in China’s Belt and Road Initiative. In terms of connectivity, the ASEAN countries need further improvement of infrastructure and connectivity. The AIIB and the Silk Road Fund proposed by China willprovide long-term and low-cost financing services for ASEAN connectivity, which will give full play to finance in infrastructure development and production-capacity cooperation. The cooperation in production capacity under the Belt and Road Framework will go a long way in advancing China’s transfer of competitive production capacity and speed up the industrialization process of the ASEAN countries and strengthen the international competitiveness of ASEAN industries.

The building of the ASEAN Community and the upgrading of the China-ASEAN FTA have given a boost to their economic and trade integration. The ASEAN Community will improve the ASEAN integration in politics, economy and culture so that ASEAN can become a competitive and highly economically integrated single market and production base with a population of 600 million and $2 trillion economic volume. The AEC will facilitate the free flow of trade in goods and services, capital and personnel in the region and the ASEAN economic growth is expected to shift gears and quicken pace. From the perspective of economic integration, the completion of the AEC will help improve the market integration within ASEAN and further promote the negotiations on the Regional Comprehensive Economic Partnership (RCEP). The China-ASEAN FTA Upgrading Protocol covers trade in goods and services, investment, and economic and technological cooperation and it shows the common aspirations and actual needs of the two sides to deepen and expand economic and trade cooperation. It is expected to enhance their cooperation in trade, investment and technology.

The expanding people-to-people exchanges are a strong bridge connecting people. They represent the common wishes of both China and ASEAN to deepen exchanges among people and both sides are active in conducting cooperation in social and cultural fields. Those on the agenda, such as education, culture, public health and environmental protection, are closely associated with the immediate interests of ordinary people, and represent an important way of fostering China-ASEAN friendship generation after generation. Over the years, China and the ASEAN countries have signed memorandums of understanding in the social and cultural fields,mapped out action strategies and plans, conducted activities of different forms, accumulated rich experience and results and created many important institutional platforms of cooperation with positive results. Putting people first, sharing well-being, inclusiveness and harmony are the basic features and components of the ASCC. According to the ASEAN Community Vision 2025, the ASCC will be the priority of ASEAN development in the next decade, which will create new opportunities for China and ASEAN to further deepen their socio-cultural cooperation.

Having said that, some complicated factors affecting the deepening of bilateral cooperation should be properly handled.

First, the ASEAN integration process remains a daunting task in the long-term. ASEAN leaders have emphasized on many occasions that the building of ASEAN is an ongoing process which has yet to be finished. Even after the announcement of completing the FTA building, there will remain a lot of work for ASEAN. As the ASEAN countries differ in their political and social systems and development stages, the largest problem lies in how to narrow the economic and income gaps which can up to 50 times. ASEAN upholds non-interference of internal affairs, consensus through consultations and accommodation of the comfort of all parties, but it lacks strong enforcement and effective supervision. For some ASEAN countries undergoing economic and social transition, complicated and turbulent domestic situations compel politicians to pay more attention to domestic problems instead of focusing on regional integration. A poll by the Indonesian Academy of Sciences shows that about 80 percent of the Indonesian people don’t understand how the ASEAN Community will affect their national economy. Obviously, the benefit of the Community is yet to be widely known, which will hinder China-ASEAN pragmatic cooperation.

Second, different speeds in regional trade liberalization are causing complex influences. The substantive negotiations on the Trans-Pacific Partnership (TPP) were concluded in October 2015. The TPP involves higher levels of opening-up in investment, services, e-commerce, government procurement, intellectual property rights, labor and the environment. As themember states of the TPP account for 40 percent of the world’s % GDP, its implementation will exert enormous influence on the global economy and trade. At the same time, negotiations on the RCEP are making headway and are expected to bring about agreement in 2016. The RCEP, once reached, will become the most dynamic FTA in the world with the largest population, the largest gap in economic development and the most diverse membership. The 10 member states of ASEAN are all involved in RCEP negotiations and four of them are at the table of TPP negotiations. Indonesia and Thailand have also expressed their willingness to join the TPP. The simultaneous advancing of two different trade arrangements facilitate trade and investment in the region but also cause complex influences on the original existing trade arrangements including the China-ASEAN FTA and ASEAN communitybuilding. Under such circumstances, ASEAN countries have to balance between the TPP and the RCEP, distracting their attention from building the AEC and imposing uncertainties on an upgraded China-ASEAN FTA which the two sides are pushing forward and on China trade relations.

Third, the intervention of countries outside the region has caused shocks to political and security cooperation in the region. ASEAN upholds a Balance of Powers Strategy and has established dialogue partnerships with 10 countries or organizations including China, Japan, the Republic of Korea, the United States, Russia, India, Australia, New Zealand, Canada and the European Union. The partnerships present cooperation opportunities to ASEAN but some countries also pose challenges to the dominant position of ASEAN in East Asia cooperation process. Since the United States declared its “rebalancing to Asia” in 2009, the United States has scaled up political, military and economic input into the region, and reinforced its influence in the East Asia cooperation process. The United States is highlighting political and security issues and attempting to manipulate the East Asia cooperation process. Due to the US’ instigation and attention to the selfish desires of several countries in the region, the process of East Asia Cooperation with economic development as the core has been disturbed to some extent. Some scholars argue that large numbersof dialogue partners are turning ASEAN into a platform of battles and struggles. China is committed to forging deeper economic development and practical cooperation with ASEAN but this process has been disturbed by powers outside the region and some countries within the region. It is safe to conclude that ASEAN’s attempts to strike a balance among its dialogue partners and even to contribute to attempts to contain the China have weakened the momentum of East Asia Cooperation.

Fourth, certain countries are hyping up the South China Sea issue, which is heightening tensions in the region. Some Southeast Asian countries are in a hurry to turn it into a multilateral and international issue and even push it into focus at ASEAN meetings and the East Asia leaders’meetings. The South China Sea issue is a problem between China and some ASEAN countries, not all ASEAN countries and a small part of the cooperation between China and some ASEAN countries, not the entire China-ASEAN relations. Bu the South China Sea issue has produced negative “spillover” effects on China-ASEAN relations, as several ASEAN countries deliberately play up the issue supported by certain countries outside the region. Some countries become disruptive factors to the sound development of China-ASEAN relations by abusing the principle of consultations through negotiations and hampering their specific cooperation from time to time.

Advices for Further Development of China-ASEAN Relations

The year 2016 marks the first anniversary of the ASEAN Community, the 25th anniversary of China-ASEAN dialogue relations and China-ASEAN Education Cooperation Year. In this year of considerable significance, China and ASEAN need to work closely with each other to ensure that China-ASEAN relations can be advanced rapidly and make new headway.

First, political and security trust should be improved. Political and security mutual trust is an important cornerstone in consolidating and deepening bilateral cooperation. As the United States pushes ahead withits “rebalancing to Asia” and Japan and other countries are interfering to a larger extent, the South China Sea issue is becoming more complicated and exerting a negative impact on China-ASEAN relations in a way that affects China-ASEAN regional cooperation. Against this backdrop, it is especially important to strengthen political and security mutual trust. China needs to enhance the ASEAN countries’ perception and understanding of it and continue to discuss the possibility of concluding a treaty on goodneighborliness, friendship and cooperation between China and ASEAN countries to provide legal and intuitional guarantees for the bilateral relations. With regard to the South China Sea and other issues, China and ASEAN should advance negotiations on the implementation of the DOC and the COC, properly handle their differences, and promote practical cooperation to jointly safeguard the peace and stability in the South China Sea.

Second, development strategies should be synergized. The ASEAN Community Vision 2025 and the guideline documents including blueprints for political, economic and socio-cultural community building offer a full view of the future ASEAN. China should better synergize its 21st century Silk Road with the development strategies of Southeast Asian countries and ASEAN, implement “early harvest” projects at an early date under the China-ASEAN 2+7 cooperation framework. ASEAN will revise the Master Plan on ASEAN Connectivity in 2016 and China has proposed the formulation of a master plan on connectivity in East Asia. The two plans can complement and reinforce each other to elevate regional connectivity to a new level.

Third, potential in production capacity cooperation should be tapped fully. ASEAN is better-positioned to undertake competitive capacity China transfers. China-ASEAN cooperation in production capacity serves the transition and upgrading of the Chinese economy, meets the development needs of ASEAN and can help translate the latemover advantage into a growth driver. The two sides should continue to advance cooperation in production capacity relying and find opportunities to build industrial parks in equipment manufacturing, mining andtelecommunications. China has advanced technology and equipment in railway, telecommunications, cement and plate glass, thus strong competitiveness in the ASEAN market.

Fourth, sub-regional cooperation advantage should be given full play. The Lancang-Mekong River Cooperation Mechanism proposed by China is a new mechanism for sub-regional cooperation with relevant countries in ASEAN. It is a beneficial complement to and expansion of their cooperation as it can leverage their geological positions and complementarity. The relevant countries will hold the first leaders’ meeting in 2016. The parties concerned should turn the relevant cooperation concepts into realities as soon as possible to create new highlights. Efforts should be made to implement the Greater Mekong Subregion (GMS) Economic Corridor Strategies and Action Plans, enhance economic cooperation in the Beibu Gulf and practical trade and investment cooperation within the subregional frameworks such as the Brunei Darussalam Indonesia Malaysia the Philippines- East ASEAN Growth Area (BIMP-EAGA).

Fifth, people-to-people exchanges should be further enriched. Efforts should be made for the 2016 China-ASEAN Education Cooperation Year. Steps should be taken to advance the Double 100,000 Students Plan, strengthen exchanges among think tanks and scholars, create cooperation platforms for scientific research and promote the establishment of the proposed China-ASEAN Ocean College. The leading role of social and cultural authorities in China and ASEAN should be further leveraged to initiate practical cooperation projects suited to the actual development of China-ASEAN relations. We should also give greater play to such mechanisms as China-ASEAN youth’s association, China-ASEAN Youth Camp and China-ASEAN Ministerial Meeting on Youth to expand cultural exchanges for youth.