China has considers the Southeast Asian region as one of the central nodes and essential partner of its Belt and Road Initiative. Strategically located on the main path of the Maritime Silk Road (MSR), it became one of the priority regions for physical connectivity improvement under the BRI. Being the first stop of the blue economic passage it serves as principal linkage points between land based economic corridors. The region is made up of several sea-lanes that China utilizes for its vast maritime trade. Also, the world’s busiest commercial shipping route, the Malacca Strait is located in the area. More than 90 percent of global trade passes through these vital sea lanes. In effect, maritime connectivity with the ASEAN nations is fundamental for China that could play an important role on the geopolitical landscape of the region.
For the past several years, China-ASEAN relationship has been steadily improving. Economic relations between China and ASEAN remained strong.
Since 2009, China is the largest trading partner of ASEAN, ASEAN is China’s third largest and in 2011 and the priority investment destination for Chinese companies. The investment between the two had exceeded USD160 billion in 2016. There is also an increase in bilateral trade from USD 7.96 billion in 1991 to USD 472.16 billion in 2015 with an annual growth rate of 18.5 percent. ASEAN and China are aiming to double their trade value, setting a target of USD 1 trillion by the end of 2020. China has a profound economic relation with ASEAN, although China is not a member of ASEAN, it is a member of ASEAN + 3 which also includes Japan and South Korea.
The ASEAN and China economies are also connected through a large number of China-lead agreements and institutions such as the Regional Comprehensive Economic Partnership (RCEP), ASEAN China Free Trade Area (ACFTA), Asian Infrastructure Investment Bank (AIIB), China-ASEAN Investment Cooperation Fund (CAF), New Development Bank (NDB), Free Trade Area of the Asia-Pacific (FTAAP), Asia-Pacific Economic Cooperation (APEC), ASEAN-People’s Republic of China Comprehensive Economic Cooperation Agreement, and the Asia-Pacific Trade Agreement.
The success of China’s Belt and Road Initiative largely depends on the support and active participation of neighboring countries like the ASEAN. China have convinced Southeast Asian countries that they can share the benefits brought by BRI and yet still retain a sense of ownership over their participation in this China-dominated initiative. With the substantial infrastructure deficit across the region for many years, ASEAN members welcome the BRI. Most countries recognized that infrastructure is critical in improving connectivity and to support greater cross-border flows of trade and investments. However, the level of participation among ASEAN countries varied in size and scope. Countries which are long-term strategic allies with China like Cambodia, Laos, and Myanmar readily support the initiative while other countries, such as Vietnam, Indonesia, Malaysia, and the Philippines, are taking a more cautious approach in their participation due to concerns about the risks of economic overdependence on China. They fear that China’s push to implement the initiative will result in the emergence of a China-dominated economic circle and a Sino centric geopolitical order in Asia. For several years, China-ASEAN relationship was stained by the issue of South China Sea. Nevertheless, according to China’s foreign ministry, the South China Sea problem was not a China-ASEAN dispute and should not affect China-ASEAN relations. With the joint efforts exerted by both parties the situation in the South China Sea has been significantly stable in recent years despite the continued U.S. military presence in the South China Sea. China has employed the principle of double track of security and economy in mitigating political risk. It states that disputes over territorial waters should be addressed through bilateral negotiations. Also, the maritime Silk Road is highly valuable for advancing regional cooperation initiatives and international public good, that it not be interfered with by historical and current conflicts. China has made a point to draw a clear line between its security policy and the BRI is consistent with its intention to portray the initiative as an inclusive regional growth strategy, not linked to Chinas strategic aims.
China has realized the immense opportunities in infrastructure development in Southeast Asia. For the past few decades, the pace of infrastructure development in the region I is sluggish since governments continue to under-invest and has encountered challenges in getting infrastructure projects to market and attracting much-needed funds to finance those projects. BRI unmistakably supported the ASEAN need for infrastructure development in the region. It has been estimated by the Asian Development Bank that USD 750 billion will be invested annually for theses infrastructure development. The ASEAN Master Plan for Connectivity (AMPC) is in conjunction with China’s Belt and Road Initiative. Both understood of the importance of transport connectivity and the system of roads, ports and railways to link adjoining ASEAN members bring them closer to one another, facilitating better trade access, investment, tourism and people-to-people exchanges. Better market connectivity is beneficial to both the ASEAN bloc and China. Enhanced connectivity across infrastructure, better communication networks and more open trade regulations will allow access to trade, investment, tourism and people-to-people exchanges.
The Belt and Road Initiative has a crucial role in bridging ASEAN and China. Setting aside the underlying geostrategic and geopolitical considerations, the potential benefits from BRI for ASEAN could be massive. The initiative will not only promote industrial development but also help enhance connectivity among the ASEAN member nations. BRI is also the perfect medium for China to trigger demand for its products by investing intensively in strategic infrastructure projects, and developing economic ties along its Silk Road Economic Belt and the 21st Century Maritime Silk Road.