Copy Reference In the first half of 2020, ASEAN overtook the United States and European Union to become China’s largest trading partner in goods for the first time. From January to June, the value of trade between China and ASEAN reached US$297.89 billion, up 2.2 percent compared with the same period last year. China’s exports to ASEAN reached US$164.04 billion, flat year-on-year, while China’s imports from ASEAN totaled US$133.85 billion, up 5 percent from the same period in 2019.
Recently, China Report ASEAN interviewed Aladdin D. Rillo, deputy secretary-general for ASEAN Economic Community, who elaborated on ASEAN’s overall economic performance, the economic development outlook, and China-ASEAN innovation cooperation.
China Report ASEAN: How has the overall economic performance of ASEAN countries been affected by the COVID-19 pandemic?
Aladdin D. Rillo: The pandemic has forced ASEAN countries to implement large-scale and multi-form restrictive measures, which have drastically lowered industrial and agricultural production, trade in goods and services, and other economic activities, and left wide-ranging adverse impacts on the regional economy.
ASEAN member states promptly introduced fiscal, monetary, and industrial stimulus policies to minimize the impact of the pandemic on the economy. For instance, ASEAN and its dialogue partners such as China have strengthened cooperation in supply chain and trade facilitation to ensure smooth supply of food and medical supplies. These measures will have a crucial impact on the region’s economic recovery and sustainable development in the coming years.
I want to emphasize three specific things. First, since the outbreak in the region, leaders of ASEAN countries have signed various statements to express determination to engage in cooperation to fight the pandemic and overcome the difficulties together.
Second, the June 4 ASEAN Economic Ministers Meeting adopted the Hanoi Plan of Action on Strengthening ASEAN Economic Cooperation and Supply Chain Connectivity in Response to the COVID-19 Pandemic, reaffirming ASEAN’s mission to ensure the free flow of goods and an open market.
Third, leaders of ASEAN countries announced establishment of the COVID-19 ASEAN Response Fund at the 36th ASEAN Summit on June 26, which will further improve the medical supplies reserve and standardized operating system to lay a solid foundation for better responding to public health emergencies. It will also help drive formation of a future comprehensive ASEAN recovery framework.
China Report ASEAN: What do you think the regional economic recovery and the path going forward will look like?
Rillo: The COVID-19 pandemic has severely hurt the region’s confidence in economic development, financial markets, supply chains, and the tourism industry, prompting ASEAN countries to downgrade their economic growth forecasts for 2020 to varying degrees. The ASEAN economy as a whole is expected to shrink this year, and most ASEAN countries will fall into recession. Even if some countries can achieve slight economic growth, it will be much lower than last year. We look forward to a rebound in ASEAN economic growth in 2021. The ability to control the pandemic, vaccine development and production, and support for vulnerable groups and informal economic sectors, especially small and micro enterprises, are key to the economic recovery of ASEAN countries.
It is worth noting that according to the speed of poverty alleviation before the pandemic, ASEAN countries were expected to basically eliminate poverty by 2030. The proportion of people living below the international poverty line in the mid-level ASEAN countries was only 3 percent, but the pandemic will pull millions of people in the region back into poverty. And as ASEAN countries have successively reopened economic activities, concerns about the emergence of a second wave of COVID-19 pandemic are still real.
Such problems are bound to hinder ASEAN’s achievement of sustainable development goals such as reducing the scale of informal industry sectors, strengthening the social security system, improving public health services, and improving emergency response mechanisms. The situation is teaching us that while effectively responding to crises, we must not sacrifice development.
China Report ASEAN: What do you think about China’s economic recovery and its impact on ASEAN?
Rillo: China is the world’s second largest economy and ASEAN’s largest trading partner. ASEAN is China’s main supplier of raw materials, primary products, and intermediate products. If China’s economic growth rate declines, ASEAN and even the global economy will be weakened. The global economic recovery in the post-pandemic era will largely depend on China’s economic recovery. China’s economy has been affected by the pandemic, and tensions in China-U.S. trade relations have also squeezed China’s economic growth. All these factors have had spillover effects on ASEAN and the world. It was a relief to see that China’s economy achieved 3.2 percent growth in the second quarter of this year, successfully avoiding recession.
Innovation cooperation is a good example. ASEAN countries generally consider 5G infrastructure indispensable if they want to embrace innovative development and digital economics in the Fourth Industrial Revolution. Big data, artificial intelligence, and other information and communication technologies will also provide impetus for ASEAN to promote innovative development projects such as “smart cities.”
To this end, the ASEAN Secretariat is working to issue a guideline on 5G ecosystem development. During the process, China and other dialogue partners have actively participated in relevant cooperation, which will likely enhance ASEAN’s development capabilities in this field. In particular, ASEAN and China launched the China-ASEAN Year of Digital Economy Cooperation this year, opening a window of opportunity for both parties to strengthen mutually beneficial and win-win innovation cooperation in 5G and other fields while driving acceleration of the region’s economic recovery.
China Report ASEAN: Do you have any suggestions for China and ASEAN to work together to fight the pandemic and deepen cooperation?
Rillo: Next year marks the 30th anniversary of the establishment of ASEAN-China dialogue relations. I can offer suggestions in four aspects.
First, both parties need to work together to defuse the negative impact of the pandemic on the regional economy through measures including deepening strategic alignment and coordination, maintaining open trade and investment, improving the regional supply chain system, strengthening regional connectivity, and accelerating the signing of the Regional Comprehensive Economic Partnership (RCEP) agreement.
Second, the two sides should fully leverage the China-ASEAN Year of Digital Economy Cooperation to achieve breakthroughs in areas such as improving digital infrastructure construction, narrowing the digital development gap, and managing cybersecurity issues.
Third, both parties need to strengthen sustainable development and high-quality development cooperation while enhancing middle and long-term resilience of regional development in terms of environmental protection, energy development, climate change response, natural disaster management, and improvement of public health services.
Fourth, the two sides should strengthen implementation of existing cooperation projects and action plans, especially the new framework documents expected to be passed before the end of this year to enhance bilateral cooperation over the next five years (2021-2025).
Aladdin D. Rillo, deputy secretary-general of the ASEAN Economic Community.
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In the first half of 2020, ASEAN overtook the United States and European Union to become China’s largest trading partner in goods for the first time. From January to June, the value of trade between China and ASEAN reached US$297.89 billion, up 2.2 percent compared with the same period last year. China’s exports to ASEAN reached US$164.04 billion, flat year-on-year, while China’s imports from ASEAN totaled US$133.85 billion, up 5 percent from the same period in 2019.