Chinese enterprises will continue to play active roles in building a closer China-ASEAN community with a shared future

This year marks the 10th anniversary of both the proposal of the Belt and Road Initiative and the vision of building a China-ASEAN community with a shared future. The Association of Southeast Asian Nations members, which connect the maritime Silk Road with the land Silk Road, are important partners of China in promoting the Belt and Road Initiative. Over the past decade, this initiative has evolved into a significant platform for building a China-ASEAN community with a shared future by sticking to the principle of wide consultation, joint contribution and shared benefits.

In the past decade, Chinese companies have actively participated in Belt and Road Initiative constructions and maintained a strong presence in ASEAN countries through investment and cooperation. In the first five months of this year, Chinese enterprises' non-financial direct investment in countries involved in the Belt and Road Initiative totaled $9.16 billion, a year-on-year increase of 11.8 percent. And the top five destinations of Chinese investment — Singapore, Indonesia, Malaysia, Thailand, and Vietnam — are all ASEAN members.

ASEAN countries are also major markets for Chinese contractors. In the first quarter of this year, the business volume of projects undertaken by Chinese companies grew by 92.9 percent year-on-year.

Chinese investment has yielded mutually beneficial outcomes for both China and ASEAN countries. First, it has fueled the industrial upgrading of ASEAN countries. Infrastructure connectivity is a key area of Belt and Road cooperation, and a major driving force of industrial upgrading. On the one hand, China has dedicated itself to cross-border infrastructure building, such as the China-Laos Railway, the China-Thailand Railway and new international land-sea trade corridors, all of which have facilitated the products and services from ASEAN countries to access the Chinese market.

On the other hand, Chinese enterprises have undertaken some flagship projects within ASEAN countries, such as the Jakarta-Bandung High-Speed Railway in Indonesia, the Phnom Penh-Sihanoukville Expressway — which is the first major highway in Cambodia — and the Hanoi light rail Line 2, which is Vietnam's first urban light rail line. These landmark projects have strengthened transport links within and among ASEAN countries, leading to reduced operational costs and expanded regional trade opportunities.

Chinese enterprises have also built economic and trade cooperation zones in ASEAN countries. Modeled after China's economic development zones, the economic and trade cooperation areas in ASEAN countries boast of relatively sound infrastructure, distinctive dominant industries, and favorable investment policies, thus forming industrial agglomeration and radiation effects.

For instance, since its launch in 2005, the Thai-Chinese Rayong Industrial Zone has attracted over 200 enterprises. It has grown into a manufacturing export base and is the center of the industrial cluster in the East Economic Corridor of Thailand. Chinese investment has helped form industrial agglomeration effects in these regions by drawing enterprises from both the upstream and downstream of industrial chains, thereby boosting the global competitiveness of local enterprises.

Moreover, in the process of building infrastructure projects and expanding overseas markets, Chinese enterprises have taken know-how and technology to ASEAN countries by training local employees, thus promoting their industrial upgrading.

In the case of the Jakarta-Bandung High-Speed Railway, Chinese contractors shared technology and experiences with Indonesian workers, cultivating a large number of local technicians who are able to carry out high-speed rail operation and maintenance work.

In terms of the digital economy, China's information and communication technology companies have joined hands with local enterprises and universities in building training centers to cultivate next-generation engineers and technicians. They have also provided training programs in digital governance to local officials. These practices have boosted ASEAN countries' management capacity and improved their industrial technologies.

Second, Chinese enterprises' investment has improved the livelihood of people in ASEAN countries. Massive investment from Chinese companies in infrastructure building and labor-intensive manufacturing industries has created large numbers of jobs for local people. In addition, Chinese investment has provided many indirect jobs by driving the development of related industries such as the supply of raw materials, logistics and services. Subcontracting has also created indirect jobs.

These new jobs have improved the livelihoods of local people by bringing them stable incomes. For instance, the Malaysia-China Kuantan Industrial Park, the first national industrial park established by China in Malaysia, has created 15,000 temporary jobs and 5,000 permanent jobs for locals through the cooperation model of a "port-industry-industrial zone" over the past decade.

In recent years, Chinese companies have also doubled efforts to shoulder their social responsibilities in ASEAN countries. Chinese companies have directly improved the lives of local people by helping local communities during the COVID-19 pandemic with epidemic prevention and management, building schools in remote areas, assisting ethnic minority groups in gaining access to electricity and communication services, and giving to charitable organizations in the area.

In October 2022, the China Chamber of Commerce in Indonesia released the first report on Chinese companies' social responsibility in Indonesia, which told the story of how Chinese companies shoulder their social responsibilities and actively integrate into local communities.

Third, Chinese investment has boosted the governance capacity of ASEAN countries. On the one hand, investment from Chinese companies has increased tax revenue for ASEAN countries, enhancing their fiscal capacity. By the end of 2021, Chinese enterprises' total investment into overseas economic and trade cooperation zones, including ASEAN nations, was $50.7 billion, contributing a combined $6.6 billion in taxes and fees to investment destinations.

Chinese companies' expanded investment activities in ASEAN countries can enrich the coffers of the host countries by creating more profits and boosting consumption, thus enabling the local governments to increase spending in public services and make long-term investment in boosting governance capacity.

Chinese investment also helps host countries ameliorate their business environment, enhance efficiency of administration, fight corruption and protect intellectual property rights. Chinese companies can also introduce advanced management expertise to help ASEAN countries further boost their public administration and governance capacity.

China pursues an opening-up strategy with mutual benefit and win-win results. Chinese enterprises investing in ASEAN countries have brought tangible social, economic benefits to the region.

Going forward, Chinese enterprises will continue to play active roles in building a closer China-ASEAN community with a shared future, and creating a peaceful, safe and secure, prosperous, beautiful and amicable home for China and ASEAN members.

Source: China Daily