Asean members face a number of challenges, including internal divisions and the fact that good infrastructure is desperately needed for smaller and poorer members to attract foreign direct investment.
A key problem, though, is the need for Asean to enhance its centrality in regional economic cooperation. According to the Asean Economic Community (AEC) Blueprint 2025 - endorsed at the 27th Asean Summit in Kuala Lumpur last year - Asean needs to go beyond focusing on reducing barriers and building infrastructure connectivity.
Member countries need to foster regional economic integration by focusing not only on freer movement of goods and capital, but also on better policy coordination and improved mechanisms for cooperation, says the blueprint.
The AEC Blueprint 2025 envisions a deeply integrated and highly cohesive Asean economy. It seeks to increase Asean's competitive edge by moving the region up the global value chains, and to enhance Asean's role globally.
In this regard, Asean should become more integrated with the Chinese economy and other big powers through China's One Belt, One Road (Obor) initiative and other cooperation frameworks such as the Regional Comprehensive Economic Partnership to further participate in developing regional and global economic governance. Their interactions may then indeed aid the emergence of Asean as a world economic power, and enhance its role and voice in global economic forums.
WHEN UNITY WAS STRONGER
A lack of centrality was not always the case. In fact, Asean started taking the lead on regional issues in the early 1990s. And by proposing the Asean+3 cooperation after the Asian financial crisis in 1997, it created a functional platform for East Asian cooperation.
This functional centrality was strengthened further when a series of Asean+1 free trade agreements (FTAs) were signed and enforced. These FTAs laid the foundation for Asean's centrality in global and regional engagement.
But the momentum began to decline in the late 1990s, and especially after 2010 when China shifted towards being an active driver of the regional and global economy.
By the time the Trans-Pacific Partnership and China's Obor initiative were being discussed, Asean centrality in regional cooperation had weakened. Hence, the AEC Blueprint 2025 stresses the need to "reinforce Asean centrality in the emerging regional economic architecture, by maintaining Asean's role as the centre and facilitator of economic integration in the East Asian region".
WHAT PART CAN OBOR PLAY?
In China's official documents, "synergy" sees China taking the initiative to approach other countries or country groups, which then respond, evaluate and avail themselves of the opportunities that arise. This is meant to be an interactive process and South-east Asian scholars have noted that Asean member states would need to adjust their policies to reflect those potential interests in a realistic manner without being too dependent on China.
Concretely speaking, the Obor initiative and the AEC Blueprint 2025 can be synergised with and connect at two levels.
At the national level, China hopes to strengthen policy coordination with individual Asean countries in relation to production capacity. China has the potential to transfer some of its high-quality production capacity to South-east Asian countries, especially Cambodia, Laos, Myanmar and Vietnam. China sees this as a way of dealing with its surplus in production capacity, while also meeting the demand for more investment and technology in South-east Asia.
Some synergies at the national level have been very evident. These include the construction of the Sino-Laos and Sino-Thai railway projects, and several industrial parks jointly developed by China and Malaysia, China and Thailand, and China and Cambodia, which have been effectively linked up with local development projects and plans.
Now, China needs to digest these countries' growing industrial production capacity by importing more of their products, since only when these countries participate in China's big consumption market can the Obor be sustainable.
At the regional level, Obor can also synergise with, and complement, the AEC's vision. Asean has come up with several initiatives in an attempt to close its development gaps, including the Initiative for Asean Integration Work Plan and the Master Plan on Asean Connectivity. The Obor and the Lancang-Mekong Cooperation framework will also help address the gaps by improving connectivity for lagging countries.
China and Asean believe that the Asian Infrastructure Investment Bank and Maritime Silk Road Fund under the Obor framework will play a big role in developing Asean connectivity.
China, in this regard, would hope that Asean would arrive at a regional consensus on engaging with the Obor and playing a more proactive role as a group - although a consensus might be difficult to achieve, due to the various conditions of the 10 Asean countries.
BUT COULD OBOR UNDERMINE ASEAN CENTRALITY?
At present, synergy between the Obor and South-east Asian development plans at the national level seems to be developing well. Many railway construction projects and jointly run industrial parks appear within a bilateral cooperative framework. However, this has aroused serious concerns in South-east Asia that China's bilateral approach lends structural advantage to China to set the terms and shape the economic and political future of some Asean countries.
Vietnamese scholar Truong Minh Vu has said: "The new infrastructural connections - which would tie South-east Asian nations individually to China, rather than connecting China with Asean as a whole - would pose a threat to Asean connectivity, a key principle in the strength of the organisation."
In this sense, the Obor could, at the same time as it brings benefits, also erode Asean unity and undermine its consensus principle. This suggests that Asean needs to arrive at a collective position on how to handle the Obor initiative.
The Obor initiative has evolved from infrastructure connectivity to policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people ties; and from inviting related countries to join the initiative, to stressing strategic synergy and connection with local development plans.
China and Asean have great potential for cooperation. But in order to realise strategic synergy between the Obor initiative and the AEC vision, it is important for China to have policy consultation, coordination and collaboration with Asean, in addition to bilateral policy cooperation for infrastructure construction and production capacity cooperation.
Moving in that direction can bring new momentum to realising the goals of the AEC Blueprint 2025 and to strategically improving China-Asean relations.
- The author is a professor at the Research School For Southeast Asian Studies, Xiamen University, China.
- SEA View is a weekly column on South-east Asian affairs.
