SINGAPORE - Asean and China can benefit from exploring new “building blocks” of growth in areas such as digitalisation and sustainability, in addition to deepening cooperation in existing areas such as trade, said Deputy Prime Minister Heng Swee Keat on Monday (July 12).
With sound economic fundamentals and a total combined population of two billion people, there is large potential for catch-up growth, he added.
But even as it ramps up collaboration with China, Asean must stay united and keep engaging all major partners, Mr Heng said. This is especially the case when South-east Asian countries get caught up in the intensifying strategic competition between the United States and China.
He was speaking on the first day of the two-day FutureChina Global Forum at the Sands Expo and Convention Centre at Marina Bay Sands. The forum brings together government and business leaders on a range of China-related issues.
Mr Heng also took part in a panel discussion on Asean and China, at which academics and bank representatives shared their thoughts on China's growing role in the international arena and how US-China relations will be shaped by these developments.
This year's theme of economic cooperation in the "never normal" is apt, given the uncertainty and swift changes - such as digitalisation and climate change - taking place in the world, Mr Heng noted. "We cannot predict the future, but we can, and must, seek to create a better future," he added.
One part of this effort will be fortifying the foundations of existing partnerships. This can be done by strengthening the rules-based multilateral framework for trade and investments, Mr Heng said.
He pointed to the Asean-China free trade deal as a cornerstone of such collaboration, calling on countries to work towards upgrading this agreement by reducing non-tariff measures and addressing new priorities.
In addition, countries should maintain the momentum for global trade liberalisation and build confidence in multilateralism, he said.
And beyond trade deals, countries can work together on new "building blocks" such as digitalisation. For instance, Singapore already has a Smart City Initiative with Shenzhen and has signed digital economy agreements with Australia, Chile and New Zealand, Mr Heng said.
Another building block will be increased cooperation on sustainable development, including catalysing a green recovery from the crisis. On top of that, countries can also look to exploring carbon sequestration - that is, the long-term capture of carbon dioxide from the atmosphere.
South-east Asia, with more than one-third of the world's mangroves and up to 120 million hectares of land for reforestation, has significant potential to contribute in this area, Mr Heng said.
But in both areas, investments are needed to realise this potential, he added. "One important building block is to set common standards, improve traceability and create vibrant exchanges for the trading of carbon credits."
Turning his attention to the broader strategic context in which Asean-China economic ties are set, the minister noted that frictions are often exacerbated by disparities in size. Still, even when there are disputes, relations between all countries must be conducted within the framework of international law, he said.
An open, transparent, inclusive and rules-based approach will benefit all countries, not just South-east Asia and China, but also the US and other trading partners, Mr Heng stressed, observing that the biggest challenge facing the region is strategic competition between the US and China.
While relations between the two great powers have become less volatile under the new Biden administration in the US, underlying tensions remain and are unlikely to abate in the foreseeable future.
Even so, it is in the interest of both countries to cooperate on common challenges, he said. These include tackling the Covid-19 pandemic, coordinating global economic recovery and addressing the issue of climate change.
"For Asean, we do not expect to change the course of the strategic competition, but we must do all that we can to keep the region open and inclusive," Mr Heng said. "It is not a question of choosing sides, but of retaining our ability to make choices for ourselves, to advance our collective interest and do what is best for our peoples."
The region must remain firmly anchored on its own interests, he added.
"This is what Asean centrality is about."