FUTURE OF CHINA-SOUTHEAST ASIA RELATIONS

By U Wynn Lwin

Chinese Premier Li Keqiang (fifth left) poses for a group photo with other leaders at the 21st China-ASEAN Summit, also held tocommemorate the 15th anniversary of the establishment of the China-ASEAN strategic partnership, in Singapore, on November 14, 2018.

S outheast Asian countries are overwhelmingly interested in close engagement with China. China was the first extra-regional country to sign the Treaty of Amity and Cooperation with ASEAN in 2003 and the first to sign a free trade agreement with the regional group in 2002.Current relations have featured high level contact through bilateral visits and strong delegation presence at the multilateral forums and meetings, a trend which has fostered close relations as well as facilitating a full range of exchange between Chinese and ASEAN leaders that has played a strategic leading role and normalized mechanisms for strategic communications.In many cases, meetings took place many times a year.

China has also made tangible achievements with ASEAN member countries at the bilateral level. Because most of them are in initial or middle stages of industrialization, they face urgent tasks to improve economic development.

A Chronology of China-Myanmar Economic Corridor

December 1, 2017

China and Myanmar Reached Consensus

Chinese President Xi Jinping and Myanmar's State Counselor Aung San Suu Kyi agreed to collaborate on the establishment of China-Myanmar Economic Corridor and nurture new growth points, so as to keep China-Myanmar relations on the right track and bring more concrete benefits to the two peoples.

June 29, 2018

Global Promotion of Major ProjectsAt the Third Belt and Road Summit held in Hong Kong, the Myanmar delegation, led by Chairman of Myanmar Investment Commission U Thaung Tun,held a promotional event targeting global investors for five major projects under the China-Myanmar Economic Corridor including construction of the New Yangon City.

September 9, 2018

Memorandum of Understanding

China and Myanmar signed a memorandum of understanding(MoU) on establishing the China-Myanmar Economic Corridor.

September 11, 2018

First Meeting of the China-Myanmar Economic Corridor Joint Committee

During their first meeting, members of the joint committee exchanged views and reached consensus on a series of issues concerning the China-Myanmar Economic Corridor,such as cooperation philosophy and principles, the mechanism of the joint committee, early harvest projects,cooperation planning and implementation of key projects.

September 13, 2018

China-Myanmar Economic Corridor Forum

It was agreed at the event that in order to complete the backbone of the China-Myanmar Economic Corridor at an early date, priority should be given to the implementation of major projects like the Kyaukpyu Special Economic Zone (SEZ)and the Ruili-Mandalay Railway.

October 22, 2018

China-Myanmar Railway Project

An MoU on the feasibility study of Muse-Mandalay Railway was signed by representatives from China and Myanmar in Naypyidaw, and a preliminary field investigation of the project was planned to be launched in early 2019.

Over the past few years, key progress has been made in trade, capacity building and connectivity. According to the latest statistics from Chinese customs, bilateral trade volume between China and the U.S. was still larger than that between China and ASEAN in November 2018, but by May 2019, China-ASEAN trade volume had grown larger than China-U.S. trade volume. ASEAN has overtaken the U.S. as China's secondlargest trading partner. China-ASEAN trade increased last year alongside reciprocal investment of US$205.71 billion.

Social and cultural exchange has become the third pillar of China-ASEAN relations following political security and trade cooperation. In 2017, as well as in 2018, good progress was made in cooperation between China and ASEAN countries, particularly in fields of tourism, culture and education—which contributed strongly to broadening cooperation while promoting mutual understanding between peoples. The 20th China-ASEAN Leaders Meeting adopted the Joint Statement on China-ASEAN Tourism Cooperation.

Mekong-Lancang Cooperation (MLC) is a sub-regional cooperation mechanism comprising China and five other countries in the region designed for the actual needs of member countries.Under the mechanism, a fourlevel structure composed of the connective meetings between Working Groups, Senior Level Officials, Foreign Ministers and Heads of State and Government. So far, all member countries have established a national secretariat or coordinating bodies. The fourth Foreign Ministers meeting convened the year before last.More than two years after its inception, the MLC has established a cooperation concept of “prioritizing development, building equalfooted consultation, focusing on concrete projects and promoting openness and inclusiveness.” The mechanism has been established under guidance from leadership to feature comprehensive cooperation and broad participation in developing a Mekong-Lancang culture of equality, sincerity, mutual assistance and affinity.Members unanimously agreed to each build their own economic corridors and establish a Mekong-Lancang community of shared future.Despite high-level progress,some problems and challenges remain. Some of the problems are inherent and some have arisen in the course of development. On this point some Chinese scholars feel:

(a) A new round of“China threat” scares is likely to proliferate in some countries because of the rapid development of Chinese diplomacy. Eventually some negative factors could be blown up and distorted which could impair China's image.

(b) Southeast Asian countries are plagued by greater uncertainty. Economic and social transformation in some ASEAN countries coupled with the complex problems resulting from various political parties,classes, religions and ethnic groups as well as other various and intricate contradictions,intertwined together, will create considerable uncertainty which could also affect ASEAN-China relations.

(c) As ASEAN-China relations develop deeply and China's influence rapidly rises, other extra territorial forces will be tempted to bring in stronger counter forces to disturb stability. Competition around ASEAN is likely to intensify as some countries push an “Indo-Pacific Strategy.”

The 21st Century Maritime Silk Road, part of the Belt and Road Initiative (BRI), was introduced to ASEAN by the Chinese President in 2013. A“2+7 cooperation framework”was also proposed by China for building a China-ASEAN community of shared future.The framework comprises a two-point political consensus on building strategic trust and promoting mutually beneficial economic development. It also identifies seven priority areas for cooperation including maritime cooperation, finance,security, environmental protection and people-topeople exchange.

ASEAN has overtaken the U.S.as China's secondlargest trading partner.

China-ASEAN trade increased last year alongside reciprocal investment of US$205.71 billion.

Container ship COSCO Netherlands arrives at Port of Singapore on April 23, 2017.

Under the “2+7 framework,”China proposed to improve the China-ASEAN Free Trade Agreement (CAFTA), establish the Asia Infrastructure Investment Bank (AIIB)modeled after the World Bank and enhance China-ASEAN financial cooperation.The ASEAN response to the economic components of the“2+7 framework” has been generally positive, but the organization interestingly did not officially endorse the BRI.Over the past four years, little impetus has driven ASEAN to launch formal discussion for a multilateral approach to the Chinese initiative.

Given individual member countries' internal economic and security considerations,it would be hard to achieve complete consensus on the BRI. Therefore, it is hardly surprising that ASEAN will continue its cautious response to the BRI. Accordingly, present China actions indicate that it is more interested in promoting the physical infrastructure development aspect of the BRI,which has involved extensive bilateral cooperation. However,the China-ASEAN Strategic Partnership Vision 2030 reflects desire by both sides to further deepen efforts to meet the United Nations' 2030 Agenda for Sustainable Development.

BRI will contribute to intraregional physical connectivity,enhance flow of goods and reduce economic disparities among peoples. BRI investment interacts with local security dynamics and the benefits very much depend on local business economic systems, economic governance capacity and distribution of gains.

ASEAN has also related concerns beyond the region as far as the Mediterranean, the India Ocean Rim, the South China Sea and the East China Sea. As quoted by one analyst,ASEAN is a key feature in the geopolitical game in South China Sea between China and the U.S. as well as China and several ASEAN member states.

Even though the prospect of violent conflict between China and the U.S. over sea lanes of communications (SLOC) and security projection remains low, at the end of ASEAN Regional Summit in 2018, the Singaporean Prime Minister warned that ASEAN nations may be forced to choose between the U.S. and China as concerns deepen about a coldwar style conflict between the two biggest economies.Meanwhile, ASEAN member states are particularly nervous about the prospect of choosing between the U.S. and China because many of them depend heavily on both for trade and investment.

November 8, 2018

Deep-water Port Project in Kyaukpyu SEZ

A framework agreement on the construction of a deep-water port in the Kyaukpyu SEZ was signed in Naypyidaw,which marked a substantial progress in the implementation of one of the key projects under the China-Myanmar Economic Corridor.

December 7, 2018

Myanmar's Steering Committee

Myanmar President Office announced that a steering committee chaired by State Counselor Aung San Suu Kyi was established for the implementation of tasks relating to the China-proposed Belt and Road Initiative and that Myanmar will work with China to advance construction of the China-Myanmar Economic Corridor.

April 25, 2019

China-Myanmar Economic Corridor Cooperation Plan (2019-2030)

Myanmar's Deputy Minister for Planning and Finance U Set Aung and China's National Development and Reform Commission Vice Minister Zhang Yong signed an MoU on China-Myanmar Economic Corridor Cooperation Plan(2019-2030).