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Directory Of Year 2020, Issue 12
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CHINA'S NEW APPROACH TO ECONOMIC DEVELOPMENT

Year:2020 Issue:12

Column: OPINION

Author: By Zhai Kun

Release Date:2020-12-01

Page: 60,61

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Two students learn how to drive a high-speed train in a simulation cockpit at the Luban Workshop in Phra Nakhon Si Ayutthaya Technical College in Thailand.The workshop was established in July 2018 as China's first overseas training center for high-speed rail techniques.(YANG ZHOU)

Two students learn how to drive a high-speed train in a simulation cockpit at the Luban Workshop in Phra Nakhon Si Ayutthaya Technical College in Thailand.The workshop was established in July 2018 as China's first overseas training center for high-speed rail techniques.(YANG ZHOU)

The global economy has been floundering since the outbreak of the COVID-19 pandemic in the beginning of 2020.Facing growing uncertainty,China unveiled a new economic development strategy of “dual circulation”with domestic and international markets reinforcing each other.

With two-way trade volume climbing despite the global health crisis,China and ASEAN have become each other's largest trading partners.ASEAN has become the prime destination for further Belt and Road Initiative(BRI)projects and is poised to be a crucial region for integrating the China-proposed BRI and the “dual circulation”strategy.

A Prime Destination

China's collaboration with ASEAN member states under the BRI framework has remained fairly fruitful despite the pandemic.ASEAN becoming China's largest trading partner is strategically important.Three key factors contributed to the historic milestone.First,the China-ASEAN partnership established in 1991 laid a solid foundation for sustained bilateral trade growth,which peaked at 20 to 30 percent annually.Second,trade between China and the UK began being excluded from China's trade with the European Union(EU)after Brexit,so ASEAN overtook the EU as China's largest trading partner in 2020.The ASEAN market has to some extent helped make up for China's losses in the sluggish Western market.Third,implementation of the BRI since 2013 has helped China facilitate deeper two-way trade with a wider range of developing countries,and ASEAN's newly-gained edge over developed economies in terms of trade with China is a natural result of it.

Progress of China-ASEAN cooperation under the BRI can be measured across five priority areas: policy coordination,facilities connectivity,unimpeded trade,financial integration,and people-to-people bonds.

So far,the two sides have made notable achievements in promoting policy coordination.In 2018,the China-ASEAN Strategic Partnership Vision 2030 was approved as a blueprint for the long-term development of bilateral ties.In 2019,a joint statement on aligning the Master Plan on ASEAN Connectivity 2025 with the BRI was issued at the 22nd China-ASEAN Summit,providing strong policy support for future cooperation.

Throughout more quantifiable aspects such as facilities connectivity,unimpeded trade,and financial integration,ASEAN has performed admirably compared to the other regions along the Belt and Road.Singapore,Malaysia,Indonesia,and Thailand are among the leading individual countries on leveraging the BRI to improve infrastructure.

Steady progress has been made on major projects such as the China-Laos railway,the China-Thailand railway,and the China-ASEAN Port Cities Cooperation Network.Bilateral cooperation in digital facilities has also been strengthened in 2020,dubbed the China-ASEAN Year of Digital Economy Cooperation.Chinese technology giants like Huawei have been warmly received in most Southeast Asian nations.

In terms of unimpeded trade,ASEAN has become China's largest trading partner.

With emerging economies like Thailand,Vietnam and the Philippines as major destinations,China's investment in ASEAN has succeeded thanks to a sound regulation system in the region.ASEAN will remain a priority area for financial integration in the post-epidemic era.

Closer people-to-people bonds have been forged between China and ASEAN through education and tourism.Many surveys have ranked Bangkok,Singapore,and Bali among the most popular destinations for Chinese tourists.Tourism will play a key role in boosting the ASEAN economy in the post-epidemic era,and favorable policies are now being designed by Southeast Asian countries to attract more visitors from China.

A Hub Region

The idea of “dual circulation”pattern was first put forward at a meeting of the Central Committee of the Communist Party of China(CPC)on May 14,2020.Chinese President Xi Jinping,also general secretary of the CPC Central Committee,emphasized the need for creating a new development pattern,in which domestic and foreign markets could boost each other,with the domestic market as the mainstay.The model represents a strategic decision by Chinese policymakers in consideration of the long-term economic development needs of China as well as new changes in the international landscape.

China has stayed steady on the fast track to global economic integration since the BRI was proposed seven years ago.The COVID-19 pandemic,a once-in-a-century phenomenon,disrupted almost everything including the BRI.

A heated but abbreviated debate on the future of the BRI broke out in the academic community after implementation came to a halt due to the raging virus.At the end of March 2020,the Office of the Leading Group for Promoting the BRI convened a meeting and decided that high-quality development of the initiative should carry on.

Before the COVID-19 pandemic,globalization was the dominant theme of world development.The breakout of the health crisis,however,sparked a unified retreat from globalization.Under such circumstances,China needs to take resolute action to fortify the resilience of its industrial and supply chains.

The “dual circulation”strategy thus arrived to address the fracturing global supply chain.Such adjustment to China's economic development strategy seeks to balance reliance on “internal circulation”and “external circulation.”Subsequent policy has underscored reliance on the domestic economic cycle while fostering optimal interaction between domestic and international markets.

China will choose priority destinations and directions when translating the new model into concrete results.Considering its advantages and conditions,ASEAN will become a hub for promoting synergy between the “dual circulation”policy and the BRI.

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