Trade

Amid the gloom, there’s room for optimism in Asia in the post-Covid-19 landscape, says Benjamin Hung, CEO, Asia, Standard Chartered. The pandemic has speeded up structural changes in this growing region’s business landscape, and created greater opportunities which will pave the way for Asia’s strong rebound in 2021 and beyond.

The China-US trade war looks set to continue under the new Biden administration, says economics professor Zhu Ying. Whether in terms of preventing technology transfer that could have military applications or seeking to enforce "structural changes” in China’s economy for fairer competition, the US will seek leverage through the trade war. Are we heading for a stalemate if the US wants to see a China that is playing by global rules, but the Chinese insist on pursuing an economic model with Chinese characteristics?

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.

Former US Secretary of State Mike Pompeo’s visit to Indonesia in Oct 2020 was aimed at winning over Indonesia to isolate China, while Chinese Foreign Minister Wang Yi’s visit in January 2021 sought to reduce the US’s influence on Indonesia. While Indonesia is caught in between, it has tried to extract economic benefits by not yielding to one particular side. How long can Indonesia continue to walk the tightrope?

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.

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.

China’s Ministry of Commerce recently released new rules targeted at blunting the suppressive impact of the US’s long-arm jurisdiction statutes on Chinese companies. The method, however, looks likely to put stress on third-party companies supplying to Chinese companies. Would this be a case of cutting off the nose to spite the face?