COULD A CHINA-ASEAN REGIONAL COOPERATION BLOC EVENTUALLY BE AT PAR WITH THE EU OR NAFTA SPHERES? President Xi Jinpings idea to set up an Asian Infrastructure Investment Bank, which he outilined during his visit to Malaysia, was a targeted response to the construction bottleneck in ASEAN countries. The benefits could be mutual: As a large infrastructure-building country, China possesses both the experience and the funds needed in Southeast Asian countries, which then would become an ever more important market for Chinese contractors. Lingering fears In the financial arena, China proposes to enlarge the scope of bilateral currency swaps to expand cross-border trade currency settlement and reduce exchange-rate risks and settlement costs of trade and investment across the region. This will be a boost to the China-ASEAN interbank consortium efforts. The ASEAN states hit hard by the 1997 financial crisis still face lingering fears and have criticized the International Monetary Funds tough stance of that time. It was in such a context that the sort of mini IMF - the Chiang Mai Initiative - was born. But now, in the face of a European debt crisis and Americas slow recovery, ASEAN states have an even greater need to protect their finances. Of course, China-ASEAN relations arent all smooth. Currently the ASEAN countries that have maritime issues in the South China Sea with China include Vietnam, the Philippines, Malaysia and Brunei. The latter two countries disputes with China are relatively modest, which helps explain why both President Xi and Premier Li visited the two countries. Compared with deep tensions caused by territorial disputes, perhaps an even greater long-term threat to China-ASEAN relations is the evolution of Southeast Asias own questions of self-identity. ASEAN member states have an uneven range of development, one from the other, as well as an array of cultural and religious backgrounds. There are well-developed economies such as Singapore, but also poor countries like Laos and Cambodia. Some states have mostly Muslim populations, but then there are countries such as Thailand where most are Buddhists.
Posted on: Sun, 23 Mar 2014 05:17:45 +0000
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