HONG KONG, Nov 13 — China’s investment in infrastructure development is useful for the Asean Economic Community’s (AEC) development as improving connectivity is a key driver of its growth.
Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said improved infrastructure, including highways, airports, seaports and rail systems, would facilitate intra-Asean trade and tourism.
He said the Belt and Road Initiative (BRI) would help Asean to actualise its Master Plan on Asean Connectivity, particularly road, rail, and sea connectivity.
“The economic logic of connectivity on a trans-continental scale envisaged by the BRI is strong, particularly at a time when globalisation appears to be in retreat in the face of rising protectionism and economic nationalism in the West,” he said in his keynote address at the 9th World Chinese Economic Summit here tonight.
Ahmad Zahid said the slow and stuttering recovery of the global economy from the 2008 crisis, and its diminished prospects meant that the world needed new impetuses to grow and the BRI could certainly be one.
“Chinese participation in the construction of new port and railway projects in several Asean countries will accelerate this connectivity. Digital connectivity is another area where the BRI can facilitate Asean Connectivity,” he said.
By its widest definition, Ahmad Zahid said the BRI would directly involve 65 countries, 4.4 billion people, and 29 per cent of global gross domestic product (GDP) (US$ 2.1 trillion).
The initiative is backed by the New Silk Road Fund, which has committed a total capital of US$40 billion to be provided in instalments.
Ahmad Zahid said the first instalment of US$10 billion, comprised US$ 6.5 billion from the State Administration of Foreign Exchange of China, China Investment Corporation (US$1.5 billion), Export-Import Bank of China (US$1.5 billion), and China Development Bank (US$500 million).
In the past four years the fund invested US$4 billion.
“Let there be no doubt that the initiative has been welcomed by most countries within its geographical scope, including Southeast Asian states. For Southeast Asia, this initiative could be a significant source of funding for the governments in the region to develop their infrastructure.
“According to a report by the Asian Development Bank, the Southeast Asian states will need approximately US$2,759 billion, which is equal to five per cent of their GDP, for infrastructure investment between 2016 and 2030,” he said.
Ahmad Zahid said access to Chinese investments through the BRI was therefore valued by the Southeast Asian countries, especially when funding through private investors and international financial institutions remained limited and fells short of the region's demand.
Promising as it may be, he said the BRI also faced certain challenges in Southeast Asia.
He said some countries, while looking forward to the BRI, were cautious because of the difference in the economic scale between China and the other countries, as well as the changing geopolitical landscape the initiative might bring.
“Despite these challenges, we should not let them get in the way of positive developments in relation to the BRI. Thankfully, there have been areas of progress between both sides.
“In this regard, we are encouraged by the conclusion and adoption of the framework of a Code of Conduct in the South China Sea in August 2017.
“The endorsement of the framework by both sides is indeed a step forward in commitment and consensus,” he said, adding that the reassurance from China of its peaceful intention would be greatly beneficial to the success of the BRI.
He said implementing the BRI agenda would therefore require a high level of mutual cooperation, understanding and trust.
On ties between Malaysia and China, Ahmad Zahid said that China is now Malaysia's largest trading partner and largest foreign investor while Chinese tourists are the largest single tourist arrivals in Malaysia.
“Malaysia and China have enjoyed a strong and robust 43-year relationship ever since the country became the first in Southeast Asia to establish diplomatic relations with China in 1974 and the regular exchanges of high level visits between the two countries further deepen our bilateral relations,” he said.
The two-day summit themed ‘Managing Global Uncertainty: Exploring New Opportunities', gathers government, business and academic and thought leaders to commemorate and celebrate the 20th anniversary of the establishment of the Hong Kong Special Administrative Region and the signing of Asean-Hong Kong Free-Trade Agreement (FTA) which complements the China-Asean FTA.
The event is organised by the Asian Strategy and Leadership Institute (Asli). — Bernama
