Economy

The conclusion of the EU-UK Trade Cooperation Agreement and the EU-China Comprehensive Agreement on Investment (CAI) in the last days of 2020 sent a strong signal that the EU will not wait for the US to resume a leading role in the world economic order. Building partnerships with countries like China are just the impetus the EU needs to deepen integration and build better prospects for itself. In this move away from a US-centric view of the economic order, the EU is not alone.

China’s willingness to consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is perhaps an admission that emphasising free trade but ignoring fair trade is no longer sustainable. Even sacred cows such as its state-owned enterprises (SOEs) and insistence on the WTO platform for multilateral trade negotiations may be up for discussion. On a practical level, the CPTPP may just be the external push it needs to force its SOEs to reform.

China’s manufacturing sector is known to be the “world’s factory”, and its scale is unrivalled. However, Chinese academic Chen Hongbin notes that this manufacturing behemoth is not as strong as it seems.

With the recent investigation into Alibaba for alleged monopolistic actions, Chinese legal expert Zong Haichao explores the need for balance in the measures taken by the Chinese government to curb monopolies. While many expect 2021 to be “year one” of the anti-monopoly era, Zong cautions that there are many challenges facing China's anti-monopoly moves, including the presence of state-owned enterprises and the lack of a sophisticated Chinese legislative structure.

Law experts Tan Chong Huat and Amanda Chen observe that the recent halting of Ant Group’s dual listing on the Hong Kong and Shanghai stock exchanges augur more regulatory changes in the micro-loans industry. While this lowers financial stability risk, will more of such regulations hinder fintech advancements? Where’s the middle ground? In their opinion, there is much that Singapore and China can learn from each other in the regulation of emerging technologies.

Despite the challenges of Covid-19, China registered 2.3% growth in 2020, the only major economy to do so. A combination of able pandemic containment efforts, expansion in industrial production and fixed asset investment, as well as prompt measures to help micro, small and medium enterprises brought them to this point. If this positive trajectory continues, China looks set to continue its remarkable rebound in 2021.

Cai Daolu of the NUS Business School says that the Comprehensive Agreement on Investment (CAI) between China and the EU can help to reduce uncertainty and facilitate the flow of investment, technology and know-how across borders. In fluid times, good old-fashioned economic integration and openness to foreign direct investment are just the booster shot that the world economy needs.

Talks on the new China-EU investment deal have just concluded. Economics professor Zhu Ying breaks down what this means for China-EU relations, China-US competition and the China-US-EU strategic nexus.

China has received favourable assessments from several quarters recently, from its handling of the pandemic to the way its economy is set to surpass the US’s earlier than planned. However, instead of revelling in such praise, China is keeping a relatively low profile. Zaobao correspondent Yang Danxu looks at why China is playing it cautious.