Economy

Even as the US government blacklists several Chinese companies for being “Chinese Communist military companies” or a national security threat, Wall Street does not seem fazed; investors seem prepared to put their money where their mouth is when it comes to betting on China.

After taking a hit in early 2020 due to the pandemic, Singapore-China trade quickly rebounded and looks set to be in healthy territory in 2021. China’s increasing focus on regional trade agreements and industrial chains will give an added push. Academics Li Wenlong and Zhang Shiming give their take on what is in store.

The idea of the Kra Canal, prevalent in the 18th and 19th centuries, resurfaced in the late 1990s as the Khlong Thai or “Thai Canal” idea. However, the high investment costs, massive and unpredictable adverse environmental impacts, and security implications have all weighed against its realisation. A mega project proposal that envisions building a “Land Bridge” between Chumphon Province on the Gulf of Thailand and an enlarged deep-sea port in Ranong Province on the Andaman Sea has now been touted, supported by the Prayut administration. Academic Termsak Chalermpalanupap examines the options.

While China has soared ahead in other areas such as expressway construction and port development, it lags behind heavyweights like the US in railway development. A fundamental cause is relying on the government as its single investment channel. Plugging its railway gaps, literally and figuratively, would give China’s economic development a decided boost.

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.