On 3 November 2021, the Institute for Foreign Affairs and Trade (IFAT) held an online roundtable discussion on the Recent dynamics of economic relations in Asia with a special focus on relations between China and other economic powerhouses, and on economic great powers rivalry in the region. Dr. Chu Minh Thao, deputy director of the Center for Security and Development at the Institute for Foreign Policy and Strategic Studies of Diplomatic Academy of Vietnam, Prof. Takeshi Daimon-Sato, professor at Waseda University and Dr. Csaba Moldicz, head of research at Eurasian Center of John Neumann University participated as panelist in the discussion. The event was moderated by Péter Goreczky, senior analyst at IFAT.
According to the analysis of Dr. Chu, the increase in trade relations between China and ASEAN, the infrastructural investments under BRI (Belt and Road Initiative) and the conclusion of the RCEP (Regional Comprehensive Economic Partnership) agreement all show that Chinese presence and influence are likely to grow in the region. Therefore, the US regards China as a challenge, and compared to its previous practice of emphasizing security cooperation with its partners in the region, now it is trying to tighten its economic relations with them as well. Southeast Asian countries hold a sort of “centralist” position, which means they do not stand at the side of neither great powers. Vietnam has been improving its economic autonomy by diversifying its relationships and is also trying to take the opportunities coming from the shift in global supply chains. It supports trade and investment liberalization and would like to create a favorable business environment for the foreign investments.
Prof. Takeshi spoke about the policy agenda-setting in the aftermath of pandemic. He emphasized that the evolving ideological battle makes it more difficult to handle the economic crisis caused by the pandemic. He introduced that the region was not as hardly affected by the pandemic, Chinese economy solely could even grow in 2020. Green Silk Road and Digital Silk Road initiatives as part of the BRI could help to achieve the goals of Agenda 2030. G20 cooperation could provide appropriate framework to handle the consequences of the pandemic. Consumer sensitivity will play an important role in forming the post-SDG paradigm, however, we should be cautious about goods promoted as environmental-friendly. The previous principles of “liberal idealism” should be re-evaluated regarding China, while it should be pursued that democracy prevails in Asia.
Dr. Moldicz presented two important factors of the re-evaluation of the Chinese economic strategy. China is seeking to redistribute wealth in a more equal way among social layers through the common prosperity campaign. Dual circulation economic development model represents China’s aim to increase the share of its internal economy in the GDP. Due to the ongoing development of the urbanization, China is not likely to lose its advantage of manufacturing based on low wages, but at the same time technological development opens new business opportunities for it too. The USA does not do all the possible efforts to counterbalance Chinese economic importance in the region, although it is trying to strengthen its military cooperation. Countries in the region should balance between the major powers: they should tighten their economic relationship with China and military and political relationship with the USA.
Some questions were raised at the end of the discussion. The experts agreed that the reality of decoupling from China is quite low, as the economies of the region are highly dependent on China. The BRI answers the infrastructural development needs in the region, and even if its several risks are mentioned by the West, alternatives given by them are not yet promoted enough. Flying geese model is not applicable for contemporary China, as different stages of economic development model coexist there at the same time.
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