The Association of Southeast Asian Nations and China have agreed to join forces in accelerating the implementation of their respective connectivity plans while, at the same time, utilizing local procurement for the completion of projects.
In a joint statement, the Asean and China have decided to synergize the Master Plan on Asean Connectivity and the Belt and Road Initiative as part of efforts to facilitate trade and enhance people mobility. They have also agreed to maximize the Silk Road Fund and special loans for infrastructure cooperation, but have maintained engineering materials that will be used for the projects must be purchased from domestic firms.
“[We] encourage the cooperation between private sectors from both sides on the investment, construction and operation of infrastructure projects,” the statement read. “Such cooperation could cover, but not limited to, development planning, project designing, investment and financing, design consulting, construction, installation and debugging, operation and maintenance, as well as manufacturing, processing and supplying of equipment and building materials to encourage the utilization of locally available supplies.”
“[We decided to] take necessary measures to promote business practices that will encourage respective domestic production, as well as ensure mutually beneficial implementation of infrastructure connectivity cooperation,” the statement added.
The Asean and China have seen the need to join forces in further deepening the cooperation on infrastructure connectivity due to the “rapid, comprehensive and significant progress achieved” in economic and trade relations between the two parties. Trade volume between the Asean and China stood at $368 billion in 2016, making the superpower the largest trading partner of the regional bloc. On the other hand, the Asean is the third-largest source of foreign direct investments inflows of China.
The Asean and China have concluded their connectivity plans must be in harmony so as to bolster trade and people mobility—two mutual objectives indicated in the Master Plan on Asean Connectivity and the Belt and Road Initiative. With this, they have agreed to “improve the linkages of infrastructure development strategies between each other, encourage information exchange and sharing of best practices through information and experience exchanges.”
The Asean and China have also decided to talk about potential development plans laid on the prospect of consolidating a list of priority projects for infrastructure connectivity. Under the Master Plan on Asean Connectivity, the Asean aims to build multiple connections from within and outside of the region. The master plan includes the establishment of land, maritime, air, information and communications technology and energy infrastructure. One of its major projects, the roll-on, roll-off cargo shipping connecting Davao and General Santos cities with Bitung, Indonesia, was launched by President Duterte and Indonesian President Joko Widodo in April.
On the other hand, the Belt and Road Initiative is the ambitious multibillion-dollar infrastructure campaign of Chinese President Xi Jinping aimed at transforming large areas of Asia into economic zones and trading routes. From Mongolia to Malaysia, Thailand to Turkmenistan and Indonesia to Iran, waves of Chinese projects, including power plants, solar farms, motorways, bridges, ports and high-speed railways, are scheduled to be constructed and funded by China-backed institutions.
The initiative is Xi’s master plan at reviving the maritime Silk Road and estimates indicate Beijing will spend $150 billion each year in countries that will take part in it.
