Integration Vital to Regional Growth

Integrating China’s Belt and Road Initiative with ASEAN development strategies is the only way for bilateral economic and trade relations between the two parties to fully develop.

China’s way of thinking is to allow all the countries along the route to complement the strengths of one another for the benefit of common development and shared economic prosperity. After a long period of observation， both parties have realized that traditional methods such as trade and investment are insufficient for the next phase of economic growth， which is also a main reason behind the decision to upgrade the China-ASEAN Free Trade Area (CAFTA).

The Belt and Road Initiative can be integrated with ASEAN development strategies in two ways —integrating China’s 13th Five-Year Plan with the blueprint for ASEAN Community building， and integrating the Initiative with ASEAN member states’ respective development strategies. The path to integration lies in the areas of bilateral economic cooperation through policy support， enterprise engagement and other means.

There should be no limit on the areas of integration — whatever is conducive for bilateral economic growth can be integrated — including the integration of industrial development planning， institutional building and that of infrastructure construction and interconnectivity.

Meanwhile， based on the objective realities of China and ASEAN countries， such integrated planning must focus on the following key points:

Production capacity cooperation should be the main focal point directly contributing to the economic growth of both sides. China is the largest producer in the world of more than 200 industrial products. In terms of production capacity， China has a wealth of advantages in equipment， technology， construction， capital and management.ASEAN countries are generally at the early or intermediate stage of industrialization， actively pursuing industrialization and urbanization， which in turn will generate strong demand and potential for industrial development， especially in the areas of equipment， technology and capital. China’s production capacity cooperation with ASEAN countries will enhance the industrial capacity of the countries concerned， benefiting local populations across the region.

The financial sector should regulate the function of the economic growth of both sides. In the future， bilateral financial cooperation should focus on expanding the scale of capital operations， establishing a sound financial system and a corresponding system of regulation.

Connectivity should be a powerful force indirectly driving the economic growth of both sides. The two parties should accelerate their work on the Master Plan on China-ASEAN Connectivity so that the connectivity plans of the two sides can be synergized as early as possible.

Political guidance as well as institutional and financial support should be secured. Since the Initiative was proposed， all ASEAN member states have voiced their support for the Initiative， expressing their willingness to deepen exchanges and interaction with China. Both China and ASEAN countries should monitor the situation on the ground and follow the integration process with timely improvements.

A new industrial division of labor should be built. It is the common aspiration of China and ASEAN countries to forge a “diamond decade” of cooperation， which targets two-way trade of US$1 trillion by 2020. The scope and depth of business cooperation is set to see further upgrades.

However， it is noteworthy that Asia’s industrial division system remains at the service of traditional markets outside the region — mainly those of developed countries， resulting in Asia’s economic structure with features of steady production but stagnant consumption.

However， this structure is beginning to change. Wage increases in China and ASEAN countries are increasing levels of consumption. Therefore， Chinese and ASEAN enterprises no longer gear production towards the demand of Western developed markets. Instead， they turn their attention to the huge demand of regional and domestic markets.