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Singapore, Thursday, 29 August 2019 – ASEAN centrality is key to weathering the Sino-American conflict, according to a report launched today at the 12th ASEAN and Asia Forum (AAF) by the Singapore Institute of International Affairs (SIIA), Singapore’s oldest independent think tank.
The report, titled, “The Sino-American Conflict and ASEAN: Surviving, Transforming, Succeeding”, elaborates on the key implications of the conflict for ASEAN. It highlights how ASEAN centrality and collective leadership can act as a bulwark against long-term negative implications of Sino-American conflict. (The PDF version of the report is available for download on the SIIA’s website here.)
Speaking at the 12th ASEAN & Asia Forum (AAF), SIIA Chairman, Associate Professor Simon Tay, said, “The issues are deep, broad, and long term. It is not just about the trade numbers, it is also about technology and broader competition.” However, he noted there is some “silver lining”. He said, “Some of it will come about with greater ASEAN integration, and I hope Singapore will continue to invest, engage, and serve as a hub.”
The 12th AAF’s Guest-of-Honour Mr Chan Chun Sing, Singapore’s Minister of Trade and Industry, said, “Southeast Asia will be at the intersection of China and US geostrategic interests. He added, “If we position ourselves well, we will be the connector, appreciated by all. If we do not position ourselves well, we will soon come under pressure from all sides.”
However, balancing relations with China and US is challenging.
For Malaysia, the Sino-American standoff is not only about keeping track of potential positive and negative impacts, but understanding how ASEAN countries can enjoy mutual benefits from investment diversion. Malaysian Deputy International Trade and Industry Minister, Dr Ong Kian Ming, said at the Forum, “Investments into one country can have spill-over effects.” Raising the example of Dyson’s investments into Singapore, Dr Ong described the situation as a “win-win” as manufacturing and assembly stages would also take place in Johor. Dr Ong also noted a “shift in the thinking of the Chinese government in terms of standards of transparency and governance” since the second Belt and Road Initiative summit. He presented the East Coast Rail Link (ECRL) project in Malaysia as a positive example of how “a project can be renegotiated on a win-win basis to ensure financial sustainability”.
The effects of the Sino-American tension are cascading across the world. For Japan, to minimise the impacts, the country is looking to build even closer ties with ASEAN. “Asian dynamism has always saved the world trade system when faced with challenges,” said former Japanese Vice-Minister of Economy, Trade and Industry, Mr Kazumasa Kusaka, now the Chairman & CEO of the Japan Economic Foundation. “Facing the risk of economic slowdown triggered by US-China friction, we are urged to work for an early agreement of the Regional Comprehensive Economic Partnership (RCEP), and Japan is in the role to lead it.”
Besides pursuing multilateral trade deals like the RCEP, ASEAN and others in the region are, at the same time, intensifying efforts to harness the digital economy as a new engine of growth. ASEAN members are working to improve digital connectivity while harnessing Industry 4.0 to move up the global value chain.
“With or without the trade war, we have to transform,” said Ms Pimchanok Vonkorpon, Director-General of the Trade Policy and Strategy Office at Thailand’s Ministry of Commerce. She continued, “The digital economy will help facilitate trade and investment, transform ASEAN, and increase its competitiveness. Ultimately it would help in reducing inequality gaps.”
“Transformation allows us to be nimble in a sea of change,” added Ms Shyn Yee Ho-Strangas, Director of Expedia’s Global Product Management team. As tourism contributes 12 per cent of ASEAN’s GDP, Expedia has been investing in technology to better serve its partners and customers, working towards “job creation, improving access, wealth distribution, and sustainable local communities”.
The AAF is a flagship event organised by the SIIA to bring policy makers and the business community together to facilitate dialogue about the region’s political, economic and strategic challenges. Into its 12th edition, the AAF saw an attendance of more than 200 participants from both public and private sectors. The 12th AAF was made possible with the support of the Economic Research Institute for ASEAN and East Asia (ERIA), Expedia Group, the Hong Kong Economic & Trade Office (HKETO), MUFG Bank and Jebsen & Jessen. (The programme for the 12th AAF is attached in the Annex.)
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Established in 1962, the Singapore Institute of International Affairs (SIIA) is a non-profit and independent think tank committed to producing policy analysis, fostering in-depth dialogues and bridging gaps between policymakers, private sector decision-makers and experts to shape public policy and social responses. Centred around ASEAN focused themes, the institute aims to deliver policy analysis in international affairs and on issues driving environmental sustainability. The SIIA has been consistently ranked as one of the leading think tanks in Southeast Asia and the Pacific, in the Global Go-To Think Tank Index by the University of Pennsylvania. Since 2017, the SIIA was ranked the No. 1 independent think tank in Asia. It was also recognised as one of the top 50 think tanks globally, excluding the United States of America.
