Expanding Cooperation Scales and Areas

In the process of China-ASEAN regional economic integration， production capacity cooperation between the two sides has begun to take shape. China has been ASEAN's largest trading partner for the past seven years， while ASEAN has been China's third largest trading partner for five consecutive years.

In terms of infrastructure， enterprises from China have undertaken many projects including roads， railways， power stations and telecommunications in ASEAN member states.

Major projects include the Surabaya-Madura Bridge， the largest cross-sea bridge in Indonesia， built by China Communications Construction Group; Cambodia’s Stung Atay Hydropower Project contracted by China Datang Corporation; the Bali coal-fired power plant built by China Huadian Corporation in Indonesia; and Indonesia’s first 4G LTE network constructed by ZTE Corporation.

In traditional industries， investment from Chinese companies in ASEAN countries continues to grow， covering areas such as agriculture， fisheries， manufacturing， mining and real estate.

In terms of emerging industries， with China's economic restructuring and the industrialization of ASEAN countries gaining momentum， the cooperation between China and ASEAN on production capacity has been extended from traditional industries to areas like information technology， rail transportation equipment， marine engineering equipment， energy saving and new energy vehicles.

In addition， industrial parks have become a new area of production capacity cooperation. Statistics from the Chinese Ministry of Commerce show that Chinese enterprises have established 23 economic and trade cooperation zones in eight ASEAN countries (excluding Singapore and the Philippines)， which have attracted a total of US$5.15 billion investment from 421 Chinese companies and achieved an accumulated output of US$21.39 billion.

Based on existing accomplishments made in regional economic cooperation， China and ASEAN should deepen their collaboration in production capacity in 2017 and further expand their cooperation fields， so as to achieve mutual benefit and win-win results.

First， the two sides should explore new ways of production capacity cooperation within the frameworks of both China’s Belt and Road Initiative and ASEAN development strategies. Regional connectivity and industrial cooperation are mentioned in the ASEAN Economic Community Blueprint 2025 and the Master Plan on ASEAN Connectivity 2025， which echoes the need to strengthen production capacity cooperation proposed in the Belt and Road Initiative. Therefore， China and ASEAN countries should make efforts to promote bilateral and multilateral collaboration in line with regional and national development plans.

Second， the production capacity cooperation should focus on some carefully-selected key areas. In accordance with the principle of \"China supplies what ASEAN needs\"， the two sides can launch a number of key projects with great market potential， strong support in resources， complete infrastructure and sound industrial development systems.

Third， the two sides should promote enterprise-led cooperation and create a new type of regional value chain. In China-ASEAN production capacity cooperation， enterprises should be the principal players. Governments can provide policy support and guidance for enterprises to carry out cooperation projects. Enterprises on both sides should strictly abide by market principles and international rules， insist on independent decision-making， and accelerate the construction of China-ASEAN industrial parks， thus gradually building a regional value chain dominated by China and ASEAN countries.

Last， policy and financial support should be further strengthened. Governments should provide enterprises with practical guidance on foreign investment as well as policy support in personnel， information， customs services， taxation and professional certification.