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World / China-ASEAN meetings

Economic community, Belt and Road initiative twin engines for ASEAN development

(Xinhua) Updated: 2015-11-22 18:42

KUALA LUMPUR - The Association of Southeast Asian Nations (ASEAN) will embrace a new starting point in its ambitious integration as the leaders from the 10-member bloc have pledged here at ASEAN's 27th summit their unwavering commitment to the realization of the economic community by the end of 2015 as scheduled.

The China-proposed Belt and Road initiative, or the Silk Road Economic Belt and the 21st Century Maritime Silk Road, has been a hot topic during the ongoing 27th ASEAN Summit and Related Summits, as hopes are pinned on the initiative to contribute to ASEAN's economic takeoff.

The ASEAN Economic Community (AEC) and the Belt and Road initiative are complimentary in each other. They will create vast opportunities for ASEAN and China to cooperate and serve as twin engines for the bloc's future development and prosperity.

The establishment of AEC will open up more regional cooperation and improve efficiencies, dynamism and competitiveness of all ASEAN members by enabling free movement of goods, services, investment, capital and skilled labor forces, thus offering new ways of coordinating supply chains and access to market.

Rather than fragmented economies, AEC envisions ASEAN as a single market and production base. As a single market, AEC will allow investors to seek and increase their market reach to the region with a total of 600 million people. As a single production base, AEC will allow businesses to tap product and services complementation in the region, establish a network across ASEAN and participate in the global supply chain.

AEC will also enable the bloc to look beyond its borders as the region presents opportunities for investors to access not only ASEAN markets but also some of the world's largest economies, including ASEAN's top trade partners such as China, Japan, South Korea, India, Australia, New Zealand, the EU and the United States.

In a recent interview with Xinhua, Cambodia's well-respected scholar Pou Sothirak, executive director of the Cambodian Institute for Cooperation and Peace, said AEC has huge potentials as a single economic bloc and when it comes to fruition, it will have an economy worth $2.5 trillionand will lift the game from the current ASEAN Free Trade Area to the creation of single market and production base.

Located along the path of the China-proposed 21st Century Maritime Silk Road designed to go from China's coast to Europe through the South China Sea and the Indian Ocean in one route and from China's coast through the South China Sea to the South Pacific in the other, ASEAN countries will mainly benefit from the initiative.

Among the ASEAN member states, construction and upgrade of infrastructure such as roads, ports and airports is a must. Improved infrastructure is essential for sustaining economic growth in ASEAN as it enhances logistical efficiency, reduces transaction costs and supports greater flow of trade and investment.

Huge national infrastructure plans for the region have been announced to meet demand of the rapidly growing economy. At least $110 billion a year will be needed in the region through to 2025 which covers transport, power, ICT, and water and sanitation developments, according to ASEAN Investment Report 2015: Infrastructure Investment and Connectivity.

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