Asia’s leaders stress unity to mitigate growing global uncertainty at Belt and Road Summit

HONG KONG – Political and business leaders in Asia highlighted the need for greater unity among economies of the region amid growing global uncertainty, at Hong Kong’s 10th edition of its annual Belt and Road Summit.

“No single country can navigate the challenges alone; we succeed only by working together,” Cambodia’s Deputy Prime Minister Sun Chanthol told the two-day forum at the Hong Kong Convention and Exhibition Centre on Sept 10.

He also extolled the Belt and Road Initiative (BRI) – a China-led initiative to build infrastructure particularly in developing countries – as a lifeline for Cambodia’s socio-economic development. BRI projects in the Asean country include roads, an airport and an expressway.

“In today’s interconnected world, no country can develop in isolation. The roads, bridges, ports, power plants and digital highways revealed today are the foundation for tomorrow’s prosperity,” he said.

He was speaking against the backdrop of geopolitical and economic turbulence wrought by the US’ shifting foreign policy as its strategic rivalry with China intensifies, protectionism and wars, all of which have cast a shadow over global trade and development.

In particular, the high trade tariffs imposed by the US are affecting economies in the region negatively, because of the impact on not only their exports to the US but also their trade with China.

These tariffs have created challenges for South-east Asia’s merchandise trade with China, as local production now faces more competition from Chinese goods re-routed away from the US, said Dr Wilson Chan, director of policy research and co-founder of Hong Kong think-tank Pagoda Institute.

Asean countries are hence emphasising more cooperation on concrete projects, particularly in green and digital technologies for industrial upgrades, while China is also seeking to expand its trade and investment ties with the region through the BRI, he told The Straits Times.

The sense of the need for the region to get together and build economic strength through greater cooperation was echoed by participants at the Hong Kong summit.

Said Malaysia’s Transport Minister Anthony Loke: “In our very, very unsettling world today, we need to empower ourselves; we need to encourage more cooperation within the region.”

Mr Loke pointed out that Malaysia’s ongoing BRI project, the 665km East Coast Rail Link, would improve trade connectivity and development between the hinterlands and the more industrialised parts of the country.

An initiative to build a pan-Asian railway network connecting Malaysia through Thailand and Laos to China could also provide an alternative means of transport for traders, he added.

Among the participants, there was also a view that Asean could play a key part in fostering trade in the Asian region.

Malaysian entrepreneur Tony Fernandes said he believed in Asean as a main engine of growth for BRI projects and in the region. This is because Asean has a policy of neutrality and can be a bridge for different nodes, he added.

There is also growing political will within the grouping to remove trade barriers, he noted.

“For the last two years, I’ve been seeing the leaders of Asean really get on with each other, and I think because of geopolitics, they see it as important to break down the barriers that existed and allow more trade and commonality,” said Mr Fernandes, who is chief executive officer of Capital A, the investment holding company that owns budget carrier AirAsia.

He added that this was “the best time” for Hong Kong to boost trade and cooperation with Asean, referring to the grouping’s US$4 trillion (S$5.13 trillion) economy and 700 million people as a “tremendous opportunity”.

His remarks came as Hong Kong Chief Executive John Lee promoted the city as “the ideal Belt and Road hub”, functioning as the “premier gateway for cooperation... across the region, connecting Asia and the world”.

The summit saw $1.3 billion worth of business deals inked between Hong Kong and BRI countries in the areas of finance, technology, logistics, professional services and education.

More than 30 agreements for multilateral cooperation involving countries including Australia, Indonesia, Kazakhstan, Malaysia, Qatar and the United Arab Emirates were also signed.

In separate discussions at the forum, Hong Kong’s Fung Investments chairman Victor Fung said the world was now witnessing the “second wave” of the BRI.

“The first wave was infrastructure building,” he said. “What we’re seeing now is a second wave of the BRI, of people using what has been built (in the first wave) as a conduit for globalisation, scientific research, and the movement of people and technology.”

Saudi Investment Promotion Authority CEO Khaled Al Khattaf said he saw Hong Kong as having “a vital role to play between East and West, which is even more critical as we navigate this shifting global landscape”.

“This isn’t just about individual projects or transactions,” he said during a policy dialogue at the summit. “It’s about how we collectively build a resilient supply chain, accelerate sustainable growth and create shared prosperity during uncertain times.”

Dr Chan of Pagoda Institute described the latest BRI summit as “a showcase of how the economic relationship between China and BRI countries, as well as the role of Hong Kong, has changed in the last decade”.

Hong Kong, with its robust financial infrastructure and strong ties in the region, can facilitate investments between Chinese and South-east Asian firms, he added.

“But the key issues are, to what extent these US$1 billion worth of projects can materialise and bring genuine economic benefits to the region, as well as how South-east Asian leaders and businessmen position themselves between the US and China,” Dr Chan said.

“While in the past, Asean countries may have taken a balancing approach between the two powers, this strategy has now become increasingly difficult under the Trump administration. How to mitigate the tensions and pressures may take extra political wisdom,” he added.