China's Belt and Road Initiative complements the development strategies of Asean's economies, and it's not just about infrastructure. In a May 2018 report, UOB economists Suan Teck Kin and Ho Woei Chen said that they see "tremendous scope" for cooperation in trade, financial integration, policy and people-to-people exchanges.
Here are some of the development strategies in Asean economies, and the synergies UOB's analysts see between these and the Belt and Road Initiative:
Thailand: Eastern Economic Corridor
- Thailand's US$44 billion Eastern Economic Corridor aims to upgrade infrastructure, develop new industries and incentivise/facilitate investment across three eastern provinces: Chonburi, Rayong and Chachoengsao.
- Increased connectivity thanks to the BRI is expected to drive investments into Thailand's EEC, particularly in the area of tourism. China already accounts for more than a quarter of tourist arrivals into Thailand.
Malaysia: Logistics and Trade Facilitation Masterplan (2015-2020)
- This masterplan targets more than US$26 billion in infrastructure projects, to bring down business costs and improve the economy's efficiency.
- Key projects under this masterplan include the East Coast Rail Link (US$14-16 billion) which will connect Kelantan, Terengganu and Pahang to Por Klang, the Alibaba-led Digital Free Trade Zone, the Malaysia-China Kuantan Industrial Park, and the expansion of the Kuantan Port.
- Malaysia stands out as a key beneficiary of the BRI, with MoUs worth a total of US$44 billion signed between Malaysia and China, from Nov 2016 to May 2017
- But, with a new government now in power, mega projects are under review and could be postponed or re-negotiated.
Vietnam: "Two Corridors and One Economic Circle"
- China and Vietnam signed an MOU in November 2017 to implement this plan, and co-operate in other areas such as industrial capacity, energy, e-commerce and more.
- According to the Vietnam government, there were 1,747 effective Chinese direct investment projects in Vietnam as at the end of September 2017, worth US$11.9 bn in total.
- The Cat Linh-Ha Dong metro line in Hanoi (due to be completed at the end of 2018) is one of the key projects classified under the BRI.
Indonesia: Global Maritime Axis Vision
- The 2015 GMA Vision focused on five key areas of development: maritime culture, maritime economy and resources, maritime infrastructure and connectivity, maritime diplomacy and maritime security. China has said that the BRI is aligned with this.
- One key infrastructure project between China and Indonesia is the US$5.5 bn Jakarta-Bandung High Speed Rail Project which is funded mainly by a loan from China, but is facing delays due to land acquisition and regulatory issues.
Philippines: "Build, Build, Build" Programme
- The Philippines does not actually lie on the Belt and Road or Maritime Silk routes, geographically. But China intends to play a role in the Duterte administration's US$170 billion Build Build Build infrastructure programme.
- The programme aims to complete at least 75 flagship infrastructure projects - 6 airports, 9 railways, 3 bus rapid transits, 32 roads and bridges and 4 seaports.
- China has pledged US$24 billion to the infrastructure plan (US$15 billion in investment and US$9 billion in loans)
Despite some project delays and concerns over financial viability, the BRI remains relevant to Asean's development, the UOB report says.
"Though there may be valid concerns that China's outward direct investment (ODI) is largely concentrated in expensive transport networks and real estate, the Chinese ODI data has shown that in Asean, the sectors that consistently received the largest investment inflows include the manufacturing and wholesale & retail sectors which have continued to rise through the years," the analysts write.
"As such, the BRI will have significant implications on the economic landscape in Asean in years to come and despite some concerns, the BRI countries are likely to continue to lend support for the intiiatives given the alignment of interests in promoting economic growth and development."