Asean

Sabrina Moles published in Asean, Culture and society, THE ROAD TO DUBAI

Water governance in ASEAN countries

By Sabrina Moles

From climate change to the economy, from human security to neighborly relations. Water management challenges bring the ten Southeast Asian countries closer together

There is no life without water. Today, the management of water resources is one of the most delicate issues for Southeast Asian countries, where new and old challenges threaten an already very complex economic, political, and social environment. ASEAN is home to countries where the issue of water management is critical and threatened by climate change, while some member states have already developed the technical and logistical expertise to tackle water management challenges. This is precisely because water management affects a wide range of very different sectors, which are at the same time deeply interconnected and essential to development. Consequently, cooperation becomes one of the strengths of the group. But there is still a long way to go.

First, the pandemic has brought water security to the fore in terms of health, as underlined by the OECD report on management, access and safety of water sources. In 2012, the ASEAN Declaration on Human Rights explicitly guaranteed "the right to safe water and sanitation", but the 2021 budget shows that only a few member states include the right to water in their legislation and have been able to implement truly inclusive projects. In many areas of Southeast Asia, the provision of water services is inadequate and uneven, with unequal access between urban and rural areas. It is estimated that at least 1.7 billion people in Asia do not have access to basic sanitation, while in Southeast Asia alone, levels of contaminated water and unfit for human consumption are estimated to range between 68% and 84%.

Access to safe water resources is also a socio-economic problem, with the weakest sections of the population being penalized. Water privatization has, in some cases, contributed to poor coverage and high prices. An example is that of Indonesia where, since 1997, the British and French companies Thames Water and Suez have signed a 25-year public-private partnership contract for water supply of the capital city, Jakarta. Back then, only 42% of its residents had access to water at home, while many others still relied on bottled water or groundwater (also one of the main reasons why the city is sinking). The project promised that by 2017 it would reach 98% coverage but, in 2020, only 59.4% of the inhabitants could access clean water. This is not an exception. In most Southeast Asian countries, sanitation is underfunded and unevenly distributed, although access to safe water is on the rise in all ASEAN countries, with Cambodia (65%) and Laos (77% again). 5%) among the most penalized.

Another increasingly important element in a water resource management perspective is energy. For instance, the Mekong region offers enormous opportunities for the construction of dams and hydroelectric plants. Opportunities that have been seized mainly by Chinese investors. There are many multilateral mechanisms that have emerged over the years to discuss, study and implement projects around Mekong water management, as in the case of the Mekong River Commission (MRC). In this sense, Vietnam has emerged as a leading force inside these cooperation projects. Energy is understood as a potential push for development in a still very poor area. Indeed, the duties of the MRC include the drafting of ten-year or five-year plans on the various areas of use of the water resources present. According to the data, the energy demand downstream of the Mekong will grow at a rate of 6-7% per year: a trend that has stimulated the conversion of river water into hydroelectric energy, for a total of 89 completed projects and another 30 still in the planning phase.

The fact that the sources of the Mekong are in Chinese territory has often generated friction and provided the ASEAN countries with a reason for cohesion. Among the most controversial structures is the Jinghong Dam in the province of Yunnan, which alternately acts as a “tap” for the countries further south. The latest case dates to July, a particularly anomalous period for rainfall in China, when some "damages to the infrastructure" drastically reduced the water supply along the lower Mekong basin. Consequently, any intervention by Beijing on the waters of the Mekong can have a huge impact on the supply chain of the entire southern sector.

It is also a problem of climate instability. A challenge that exacerbates the impact of the flood and dry periods of Southeast Asian water basins and rivers Across the region, at least 34% of the population is frequently exposed to floods, while droughts have affected over 66 million people in the last 30 years. In a report produced by ASEAN and ESCAP (United Nations economic and social commission for Asia and the pacific), the trend is rapidly growing, with a significant increase by + 17%). Moreover, 4 out of 5 economic damages affect agriculture. From this it follows that the weakest sections of the population are among the most penalized, and are exposed to food insecurity caused by the destruction of crops. This is a very important factor, since the economy of the ten countries largely depends on the agricultural sector. As many as 61% of the labor force in Laos is employed in this sector, and remains stable at 47% in Vietnam, where a severe drought in 2016 led to the loss of more than 60% of revenue.

The management of water resources is therefore an essential factor in many areas: it follows that the problems related to the supply of safe and accessible water can become a conflict accelerator both at the domestic or regional level. It is estimated that 80% of conflicts in the world take place precisely in areas where the level of environmental degradation and the effects of climate change are more pronounced. All this also intersects with the risks associated with the loss of biodiversity.

With the worsening of extreme climatic phenomena and the reduction of water resources in the region, the ten ASEAN countries have begun to focus on regional cooperation to create resilient environments, economies, and supply systems. Among the solutions proposed by the group emerges the awareness that ex post intervention is no longer sufficient. In the intentions, priority should be given to prevention, such as monitoring climate trends and changes in the territory, to implement an alarm system before the phenomena turn into irreparable problems. This should lead to the creation of both technical intervention mechanisms and financial support for the categories most at risk, in particular small farmers and primary sector workers. Examples are the 2020-2025 Drought Management Strategy promoted by the MRC with the support of ASEAN and the United Nations.

The key to these risk absorption and prevention plans led to discussions on financial solutions capable of predicting the extent of damage and how to distribute aid. Among the objectives that emerge, the mitigation of climate change and universal access to water stand out as starting points for thinking about new plans for the management and exploitation of water resources at the regional level. The problem in this sense is not so much represented by the lack of funds (which are often part of aid packages promoted by international organizations), as by the careful management of the same to carry out projects capable of being first of all economically and structurally sustainable. in time.

Finally, the challenge will be to continue cooperating as a group on the delicate topic of water management, regarding the underdeveloped countries in the region, which in large part belong to the group. In this scenario, given the complexity of the sectors it involves, water management is threatened by new challenges. At the center of the debate will be the health crisis, the decline in GDP growth (down to a forecast of 4.3% for the second half of 2021 in ASEAN-5 compared to April of the same year), and the exacerbation of extreme climatic phenomena that are disrupting ecosystems.

0 Share
Agnese Ranaldi published in Asean, Economy and trade

South Korea relaunches trade with ASEAN

A few months before the presidential elections of 2022, Moon Jae-in relaunches trade relations with the ASEAN economies. Amidst economic and diplomatic challenges, Seoul’s government is trying to honour the commitments made at the beginning of its mandate

South Korea inaugurated tatalks to revive trade relations with ASEAN. At the beginning of its mandate, Moon Jae-in’s government was committed to developing the country's diplomatic potential, promoting solidarity and cooperative relations with the Asian neighbourhood. During the last months before the 2022 presidential elections, Moon Jae-in seems to be willing to honour this commitment, as evidenced by recent diplomatic contacts with North Korea and declarations about the desire to update the free trade agreement with ASEAN economies.

The free trade agreement with Southeast Asia was signed in 2007, and today ASEAN is one of South Korea's main trading partners – right after China. Bilateral trade with Beijing amounted to approximately $241.4 billion in 2020 and accounted for 24.6% of the trade between South Korea and the rest of the world. On the other hand, ASEAN has carved out a 14.6%, despite a global health crisis and the recession that followed. From 2006 to 2019, the volume of trade between the parties grew by about 60%, having risen from 61.7 to 151.2 billion dollars, according to the International Trade Center database. When global trade contracted due to the Covid-19 pandemic, the volume of transitions between the two countries dropped to 143.8 billion in 2020. Despite this, ASEAN remains a significant economic partner, of which Vietnam is the major flagship: with 69.1 billion dollars, Hanoi represents 28.4% of the total bilateral trade.

The main vector of trade relations with Southeast Asian countries is the "New Southern Policy", officially launched by Seoul in November 2017. "The Korean government will strongly push its New Southern Policy to achieve decisive progress in its cooperation links with ASEAN, "said President Moon Jae-in, at the Korea-Indonesia Business Forum in 2017," It is my wish that the New Southern Policy can create a community for people, which unites people with people and minds to minds; a peaceful community, contributing to peace throughout Asia; a community of shared prosperity in which the ASEAN countries grow together through mutually beneficial economic cooperation ”. The desire to deepen trade relations with the countries of the region is also part of this renewed cooperative approach with Southeast Asia. South Korea had agreed with ASEAN to further reduce their tariff barriers in 2016, but the update of the free trade agreement then took a back seat to the Regional Comprehensive Economic Partnership (RCEP), which was finally signed at the end of 2020.

Unfortunately for the Korean government, despite efforts to strengthen cooperation, on trade and investment in the ASEAN area, Seoul is still lagging behind Beijing and Taipei. "Amid the intensifying trade friction between the US and China, ASEAN nations have emerged as an alternative market," said Kim Bong-man, head of the international affairs division of the Federation of Korean Industries. "To broaden the nation's trade ties with the ASEAN market, the National Assembly should ratify a series of trade agreements," he continued, "including the comprehensive economic partnership with Indonesia and a bilateral free trade agreement with Cambodia ".
The renewed diplomatic activism of the Korean government – which recently celebrated the possible rapprochement with North Korea, with the restoration of the communication line interrupted a year ago – is also aimed at Southeast Asia. A few months after the end of his mandate, amid the efforts to recover the national economy and the geopolitical challenges posed by the Sino-US tensions, Moon Jae-in seems to want to honour the commitments made at the time of his inauguration. “He is not trying to overcome the challenges alone, but rather the solidarity and cooperation that will make us stronger in overcoming the pandemic. Let us embrace this recognition and strive to make it a reality” the President said in Davos</a last January. The economic diversification projects promoted by Seoul to free itself from excessive economic dependence on Beijing seem to be reconciled with the fervour of post-Covid-19 diplomacy.

0 Share
Michelle Cabula published in Asean, Politics and strategy

In the 5G race, ASEAN chooses the path of pragmatism

By Michelle Cabula

ASEAN hosts a series of pioneering projects that have earned it the reputation of a “laboratorio globale dell’innovazione digitale”. Here national ambitions are intertwined with the logic of the US-China technological competition, but governments look to costs and efficiency to choose the partners with which to design their national telecommunications systems.

In Southeast Asia, the pandemic was not enough to stop the 5G race. Indeed, the Covid-19 has made it clear that access to a fast and stable connection has become essential to carry out most of the daily activities, thus highlighting the urgency of developing infrastructure that can withstand the accelerated digitization. 

In Thailand, Advanced Info Service (AIS) and True Corp., the main mobile operators in the country, collaborate with health facilities ensuring their access to 5G coverage, indispensable for benefitting to the maximum of some innovative solutions of robotics and telemedicine. At Chulabhorn Hospital, which is set to become the first hospital in the country to provide a comprehensive medical care service that integrates 5G technologies in all its dimensions, robots support the medical staff and the results of a CT scans of lungs are delivered within half a minute. In line with the goal of reaching a total 5G coverage by 2025, Singapore is activating to support research on artificial intelligence and cybersecurity with a $50 million investment plan, as announced by Deputy Prime Minister Heng Swee Keat on 13 July. In general, the vision expressed in the ASEAN Digital Masterplan 2025 adopted earlier this year demonstrates how the completion of the transition to digital communities and economies, with an eye to the security and inclusiveness of technologies, represents an ambition shared by all governments in the area.

The ASEAN digital market, which is growing at an unparalleled rate in the world, is expected to add about a trillion dollars to regional GDP over the next ten years. A potential that does not leave China and the United States, global champions of the telecommunications sector, indifferent. Their political and commercial tensions are poured into Southeast Asia triggering a race to provide Internet connection and 5G services. In the ASEAN context, however, geopolitical pressures have produced different results than elsewhere. Generally, governments have approached the issue of supplier choice pragmatically, avoiding openly advocating for one of the two competing technological superpowers. Despite Washington’s push on its main partners in the area, no country has opted for a total renunciation of the network equipment of the two Chinese manufacturers ZTE and Huawei within their national strategies. Except for Vietnam, where anti-Chinese sentiment has prevailed and Beijing’s technologies are currently banned, at least de facto.

In general, however, Chinese providers can boast a number of collaborations in the area. In May 2019, at the same time that the United States decided to blacklist Huawei, the Chinese ZTE signed a Memorandum of Understanding with Ooredoo Myanmar to collaborate in the development of 5G. In addition, Huawei Asean Academy will help provide 30,000 Thai workers with training aimed at developing functional digital skills to support the Eastern Economic Corridor infrastructure project. Huawei Technologies is also among the partners involved in the design of a 5G Cybersecurity Test Lab in Malaysia, as well as in the development of Forest City, the first smart city built on four artificial islands within the Malaysia Iskandar Special Economic Zone, located along with one of the Belt and Road Initiative routes.

However, the Malaysian government itself decided to diversify its 5G network. On 1 July, it was announced that the Swedish Ericsson (among the eight suppliers, including the Chinese Huawei, who had participated in the tender) has been chosen as the recipient of the $2,6 billion contracts designed to secure a fifth-generation connection to 80% of the population by 2024. The range of 5G licenses in the different countries remains quite varied. In Singapore, the construction of the 5G network was entrusted to a composite partnership between Singtel, the joint venture Starhub-M1 and Ericsson and Nokia. Even in this case, rather than the desire to join the anti-Chinese campaign promoted by Washington, the decision seems to be dictated by practical considerations, such as the compatibility between the 4G hardware used previously and those of the new generation. The case of the Philippines is particular: the main telecommunications service provider (DITO) is in fact a consortium that includes Udenna Corporation alongside China Telecom; nevertheless, it benefits from some Nokia NetAct solutions provided by the Finnish company for the management of daily network operations, including monitoring and software management.
While the choices of governments are limited by the absence of competitive alternatives to the Chinese offer and the need to simultaneously maintain good relations with both technological superpowers, on the other hand, ASEAN countries prove to be key players in the search for a balance between the US and Chinese influence. In a context where technological ambitions are realized through pragmatic cooperation that transcends the geopolitical camps, it is tried to curb the logic of commercial escalation carried out by Beijing and Washington.

0 Share
Lorenzo published in Asean, Editorials

Editorial | USA - China, in the South-East the challenge is (also) digital

It is not only geopolitics, in the ASEAN region the giants of Washington and Beijing compete for a fast-growing market

Editorial by Lorenzo Lamperti, Editorial Coordinator Associazione Italia-ASEAN

South China Sea, diplomatic relations, strategy and geopolitics. All true, but the rivalry between the US and China in South-East Asia also concerns purely economic issues. In particular, the competition between the technological giants of the two countries. Yes, because the digital market in the ASEAN area is experiencing a very strong growth, made even more impressive and rapid by the Covid-19 pandemic. It is not a coincidence that a bit all the big companies are investing in the area: Amazon, Facebook, Google and Microsoft on one side, Alibaba and Tencent on the other. For example, as Nikkei Asian Review underlined, on cloud computing: Singapore is one of the main headquarters of data centres at world level. Mark Zuckerberg’s company is building one, its first in Asia, from 170 thousand square meters in the city-state making about billion dollars of investment.

It is not the only case. Amazon will open a new center in Jakarta by early 2022. Microsoft has announced the opening of two plants, in Indonesia and Malaysia. Chinese actors don’t just stand by and watch. Alibaba already has three data centers active in Indonesia and by the end of the year it will open one in the Philippines. The company founded by Jack Ma also announced investments of over USD 1 billion over the next three years in Asia-Pacific startups. Tencent has also taken root in the South-East, with offices spread across several countries of the region. On the other hand, the growth prospects are considerable: 650 million people and a constant increase in the penetration of connection and digital devices. An unparalleled trajectory in the world that offers a wide range of opportunities for e-commerce, fintech and online entertainment. It is therefore no coincidence that there is strong competition to win the trust of the local middle class.

However, the South-East is not just a battleground between the US and Chinese technological giants. Local realities are emerging on a regional scale and are attracting the attention of international realities. For example, Singapore Grab’s super app benefits from Amazon andMicrosoft’s cloud services. Alibaba and Amazon are competing for the supply of services to the Indonesian Tokopedia. 

0 Share
Redazione published in Asean, Economy and trade

TPP: from the backyard to the epicenter of world politics

By Dmitrii Klementev

It is likely that the interest towards the CPTPP will only increase in the near future. Here is why

The Indo-Pacific represents a tangle of different institutional formats which allow maintaining a fragile balance of power among major geopolitical players in the region. The foundation of this framework was largely laid in the second part of the 20th century. However, at the turn of the century it experienced a rebirth. The end of the Cold War followed by the rapid economic and technological growth of the Asian countries have preconditioned the shift of the center in the world system of international relations (IR) to the Indo-Pacific, for control over which the struggle between the leading powers has already begun.  

In 2002, the history of the Trans-Pacific Partnership Agreement (TPP) started with Chile, New Zealand and Singapore signing the Trans-Pacific Strategic Economic Partnership Agreement, which was later joined by Brunei. In 2008, the US decided to adhere to the initiative and use the agreement to contain the Chinese influence in the region. However, in 2017, the Trump administration left the deal that seemed to bring the negotiations on the TPP to a standstill. At that time, the agreement had already 11 members apart from the US and the decision to continue talks were eventually made. Joining the negotiations Japan took the lead. 

Finally, in 2018 the remaining countries signed a renewed version of the TPP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which entered into force the same year after being ratified by the six signatory-states. CPTPP covers a wide range of issues, including trade in goods, services, investment, customs checks, labor and environment provisions. Altogether the eleven countries’ economies account for more than 13% of global GDP and 15% of global trade, that makes the agreement comparable to the largest free-trade areas of the world.

Nevertheless, at that point the US was no longer the party to the treaty, even despite the fact that “America is back” has become the leitmotif of the Biden’s administration, which replaced D. Trump in the office in 2021. The absolute majority of experts in the White House were quite skeptical about the prospects of renewing talks with the CPTPP members in the near future. However, if the possibility of rejoining the CPTPP has been frequently questioned by the US officials, the very goal of engaging economically in the Indo-Pacific region through “alternative measures” has always been considered a top priority. The newly adopted Interim National Security Strategy Guidance lists the Indo-Pacific in the first place among the US “vital national interests”.

It is worth mentioning that to date, the United States has been not the only country that paid attention to the CPTPP initiative. On February 1, 2021 the UK expressed its will to join the agreement. This step has become well-enshrined in the logic of the revised system of foreign policy priorities of the United Kingdom, set up after the decision to leave the EU. In March 2021 the British Government presented a new edition of the Integrated Review, which stated explicitly the UK’s goals up until 2030. In particular, the Review emphasized the necessity to “forge new trade deals… adapt to major challenges in the world…, including the growing importance of the Indo-Pacific region”. With regards to the latter point, the British government considered ASEAN and the CPTPP as two key initiatives to focus on. For the UK, potential accession to the CPTPP is assessed unambiguously positively, as it will allow the country to replace the previous free trade frameworks that it possessed as a member of the EU.

Based on the dynamics examined, it is likely that the interest towards the CPTPP will only increase in the near future due to a number of conclusions. First of all, the above analysis demonstrates that the Indo-Pacific countries are capable of making independent foreign policy choices and can be considered as credible partners. Such a circumstance also testifies to a strengthening multipolar order. Second, an increased interest towards the CPTPP will be also explained by the ongoing transition to a new system of IR centered on the Indo-Pacific region. Third, the more important geopolitical dimension of trade tools makes them indispensable for promoting states’ interests in the international arena today. In addition, the spread of such practices gives a hope for the formation of a more or less rules-based order in the future centered on “mega-trade FTAs”, such as CPTPP.

0 Share
Redazione published in Asean

EMERGENZA COVID-19 IN ASEAN: RICHIESTA DI AIUTO

Il Ministero degli Affari Esteri e della Cooperazione Internazionale (MAECI) ci segnala la drammatica situazione che il Sud-Est asiatico sta attraversando, trovandosi ad affrontare una nuova fase della pandemia di COVID-19, caratterizzata da un incremento preoccupante dei contagi e dei decessi, specie tra le fasce più vulnerabili della popolazione. L’impegno delle Autorità locali nella lotta alla pandemia si scontra con la limitatezza dei mezzi a disposizione, sia in termini di dosi vaccinali che di materiale sanitario.

In tale contesto, il Ministero sta ricevendo diverse richieste di aiuto da parte dei Paesi dell’ASEAN. Fra questi in particolare l’Indonesia, che ha fatto pervenire alle istituzioni UE e alle Ambasciate degli Stati Membri presenti a Giacarta la lista dei materiali sanitari necessari.

ELENCO DEI MATERIALI NECESSARI IN INDONESIA


Il Ministero ha pensato di sondare la disponibilità dei Soci, dei Partner e di tutti i contatti dell’Associazione Italia-ASEAN di farsi carico dell’acquisto del materiale richiesto.

In questa fase l’Associazione potrebbe raccogliere le manifestazioni di interesse e trasmettere al MAECI un quadro completo (specificando il tipo di materiale e il quantitativo che ciascuna azienda sarebbe disposta ad acquistare).

Ove sulla base delle informazioni ricevute emergesse la possibilità di raccogliere un quantitativo significativo di beni, il MAECI potrebbe valutare di organizzare un volo umanitario e farsi carico delle relative spese.

Tale gesto di solidarietà, oltre a valorizzare il ruolo dell’Associazione nella regione, rappresenterà un esempio concreto di sinergia fra istituzioni e società civile nel rafforzamento delle relazioni bilaterali e nella promozione del Partenariato di Sviluppo tra l’Italia e l’ASEAN, che si fonda anche sull’assistenza umanitaria.

Specifichiamo che le imprese dovrebbero far pervenire il materiale necessario presso la base di pronto intervento umanitario di Brindisi, gestita dal Programma Alimentare Mondiale, dove il personale incaricato dalla Farnesina di seguire i trasporti umanitari italiani si occuperebbe della presa in carico e della predisposizione per la spedizione. Una volta confermata la fattibilità dell’operazione e prima che si proceda all’acquisto dei beni, il Ministero manderà tutti i dettagli da comunicare alle aziende interessate, che dovrebbero idealmente individuare un punto di contatto per la definizione degli aspetti tecnici della spedizione, in stretto raccordo con i competenti servizi del MAECI.

Rimanendo a disposizione per eventuali comunicazioni, vi ringraziamo per il supporto e la disponibilità in questa fase così complessa per i Paesi ASEAN.

0 Share
Carola Frattini published in Asean, Culture and society

The development of the ASEAN Collective Investment Scheme

The Philippines is now officially part of the ASEAN CIS framework and its entry into the scheme is the latest step towards enhancing capital market connectivity in the region.

Gli organismi di regolamentazione del sistema di investimento collettivo dell’ASEAN (CIS) hanno annunciato l’entrata delle Filippine nel framework. L’11 maggio 2021 i 4 membri hanno firmato un memorandum d’intesa supplementare che ha formalmente ammesso le Filippine nel framework e ha segnato la ben sperata espansione. Gli investitori delle Filippine saranno autorizzati ad offrire fondi nei paesi che partecipano all’ASEAN CIS framework. Così, le società di investimento delle Filippine inizieranno ad offrire fondi agli investitori in Malesia, Singapore e Thailandia. Ruenvadee Suwanmongkol, segretario generale del SEC tailandese, parlando del l’ingresso delle Filippine nel quadro, ha sottolineato l’importanza dell’ASEAN CIS framework con queste parole:

“Siamo lieti di accogliere le Filippine come nuovo firmatario dell’ASEAN CIS framework, che promuove una maggior interconnessione, inclusività e resilienza dei mercati capitali dell’ASEAN. Questo nuovo partenariato creerà maggiori opportunità commerciali e rafforzerà la cooperazione economica tra gli Stati membri dell’ASEAN, arricchendo, nel contempo, il pool di fondi disponibili per gli investimenti nell’ASEAN. Ci aspettiamo la partecipazione di più Stati membri dell’ASEAN in questo framework nei prossimi anni.” 

ASEAN CIS framework è diventato ufficialmente operativo nel 2014. L’idea alla base dell’ASEAN CIS framework è che le unità di un fondo autorizzato in uno dei paesi partecipanti al CIS possono essere offerte in un altro paese CIS dopo l’approvazione di entrambi i paesi interessati. I risultati più evidenti di questa cooperazione sono la ridotta burocrazia e maggiori opportunità per la distribuzione transfrontaliera dei fondi, l’accesso ai prodotti, la diversificazione degli investimenti e delle alternative per gli investitori al dettaglio. Più nello specifico, ASEAN CIS framework è regolamentato attraverso una combinazione di leggi del paese d’origine del fondo e del paese in cui viene offerto il fondo straniero. Gli organismi di regolamentazione sono la Securities and Exchange Commission delle Filippine, l’Autorità monetaria di Singapore, la Securities Commission della Malaysia e la Securities and Exchange Commission della Thailandia.

One of the scopes of the ASEAN CIS is to facilitate and expand the possibility of collective investment schemes between the CIS’ countries that at the moment are Thailand, Malaysia and Singapore and the Philippines. Above all, the ASEAN CIS framework is born from the desire to obtain mutual fund recognition and to harmonize the offering of funds in Asian countries. In fact, many Asian countries do not recognise each other funds or do not have agreements to make their capital markets to collaborate. For example, the security and exchange commission of Thailand offers foreign funds through the ASEAN CIS Framework and through the Asia Region Funds Passport or foreign exchange traded. So, in Thailand foreign funds can be offered only through two methods. This again highlights the importance of the ASEAN CIS framework since for some countries is one of the few methods employed to allow for foreign funds. Moreover, this similar types of agreements start to be stipulated not only between ASEAN member states but also with other Asian countries. An example of this is Thailand, that early this year has announced the Hong Kong-Thailand Fund Passport that serves for the mutual recognition of funds.

More specific and technical information on this topic can be found at this link.

0 Share
Agnese Ranaldi published in Asean, Economy and trade

The ASEAN regional and global automotive competition

Automotive is a strategic sector for ASEAN economies, integrated through complex global value chains. The pandemic has transformed preferences of consumers and producers, opening the sector to new developments

The Covid-19 pandemic has forced people to rethink daily habits and priorities. In Southeast Asia, the cornerstone of global value chains, the automotive sector has proved particularly sensitive to these transformations. As reported by the consulting firm Deloitte, some significant trends emerge, on both the production and consumption side, which could strongly affect competition in the sector, with consequences at a global level.

For what concerns the demand, the preference for personal vehicle travel has increased since the pandemic. Before the health crisis, an average of 37% of consumers preferred to travel by their own means, but with the outbreak of the pandemic this percentage increased significantly, reaching 52%. Local consumers, according to Deloitte, are also rethinking the type of vehicle they would be willing to buy: fuel-efficient vehicles are gaining ground, but the lack of efficient infrastructure means that consumers continue to prefer hybrid electric vehicles (HEVs), compared to battery electric vehicles (BEVs). About 38% of respondents in the region prefer these fuel-efficient vehicles - particularly in Indonesia, the Philippines and Thailand, this preference was expressed by more than 40% of the sample analyzed. Furthermore, according to the report, since a large part of the population interviewed said they were unwilling to pay more for the purchase of electric vehicles, the government support for production and sales could be useful in encouraging their diffusion. 

As for the supply side, if ten years ago Thailand could claim the undisputed primacy in automotive production in Southeast Asia, things are bound to change. To fully grasp this transformation, it is good to observe the growth of local emerging markets from a genealogical point of view. The production of automobiles, assembly and the creation of intermediate parts has always been one of the favored sectors by regional economies. Southeast Asia represents, on a macroscopic level, one of the strategic hubs of global supply chains. Building a car involves a long and fragmented process, through integrated transnational networks that provide hundreds of thousands of jobs, attract billions of dollars in investment, and require skills and technologies that can foster long-term growth of economies. of the region. Countries such as South Korea and Japan have based their economic growth on a model that hinges on the production and export of automobiles, and this success has made them references to emulate in East Asia.

Thailand is an emblematic case. It is one of those emerging markets in Southeast Asia that has meticulously followed the instructions to the free market promoted by the International Monetary Fund and the World Trade Organization, opening the value chains to foreign investment and imports. For economies so dependent on interactions with foreign markets and investments, the health crisis represented a real shock, and Thailand's leadership in the automotive sector was challenged by the emergence of another challenger. Indonesia has taken a different path to launch its automotive sector and national economic growth. Exports to Jakarta took off thanks to strong domestic demand, which increased from 486,000 in 2009 to 1.2 million in 2014. The Indonesian experience, according to James Guild from The Diplomat, questions the development model prescribed by international institutions for the growth of emerging markets.

However, competition between car manufacturers is not just a local issue. Among the effects of globalization is the extreme mobility of investment flows, which also perform the strategic function of channeling geopolitical competitions. Southeast Asia has always been a particularly attractive destination for Japanese car manufacturers: around 90% of the vehicles produced and sold in Thailand come from Japanese manufacturers. However, Tokyo seems to want to stay in the footsteps of traditional gasoline fueling, while the preference of local fuel-efficient and hybrid consumers is growing, especially in Thailand. Chinese companies seem willing to seize this opportunity. Chinese company Great Wall fully entered the Thai market last year, acquiring a plant from General Motors in which it has invested over $ 700 million. The entire facility has been transformed into a state-of-the-art factory, with production lines powered by artificial intelligence, which began producing hybrids in June and plans to launch production of electric models by 2023. The Great Wall would take advantage of a Thai government program that offers concessions for the design of electric vehicles. Bangkok, in fact, aims to make 30% of locally produced vehicles electric by 2030, and the reluctance of Japanese manufacturers to resort to the electric breakthrough is diversifying competition.

Therefore, the Southeast Asian automotive sector is in transition. Consumption and production are slowly adapting to the new circumstances of the post-pandemic globalized economy, with different speeds depending on the emerging economies. It will be interesting to observe which directions the sector will take, which will tell something about the economic development of the entire region.  

0 Share
Emilia Leban published in Asean, Culture and society

The importance of connectivity between Europe and Asia

The European Union strategy to relaunch relations with the Asian continent

Asia has strategic importance for Europe. In recent years we have experienced that the economy and financial markets of Europe and Asia are increasingly interdependent and integrated. Changes in the economic performance of one region have a direct influence on the economic conditions of the other. With a population that far exceeds that of any other continent and its fast-growing economies, in 2019 alone, Asia was the recipient of 28% of EU exports and 40% of its imports. Not to mention that China is the only world power to close 2020 with economic growth, with a GDP increasing by 2.3%.

All facts that the EU could not ignore. Also for this reason, in 2018, European leaders adopted a joint communication, known as “Connecting Europe and Asia – Building Blocks for an EU Strategy”. The strategy proposed by the European Union focuses on building a deep interregional dialogue by creating sustainable connectivity systems and shared rules. This becomes possible, first of all, by restructuring the networks and connections system between the two regions, creating transport corridors, advanced digital connections and improving energy cooperation. Secondly, by setting up partnerships focused on connectivity, which hinge on common rules and standards, capable of enabling better management of the flow of goods, services, people and capital between Europe and the Asian continent. Finally, the European Union is committed to closing the gap in investments dedicated to connectivity with Asia, mobilizing resources and helping to strengthen cooperation with private investors and organizations of an international nature and multilateral development banks.

The strategy evolved with the promotion of an EU-Asia meeting (ASEAM) aimed at expanding connectivity between the two regions. It is an informal platform that also includes a parliamentary dimension (ASEP), which brings at the same table 53 countries from the two regions, about 60% of the global population and 65% of world GDP. Another permanent institution is the ASEF (Asia-Europe Foundation), which is responsible for encouraging intellectual, cultural and interpersonal exchanges between Asia and Europe. The relations between the two blocs were then strengthened with the conclusion of five strategic partnerships - including one with ASEAN - and free trade agreements with several Asian countries, of which the last, negotiated with the ASEAN, concerns the liberalization of interregional air traffic.

However, it is all too evident that improving connectivity costs money. The Asian Development Bank estimates that around 1.3 trillion euros per year are needed, to be used in infrastructure investments, economic growth and green policies. To this must be added investment of 1.5 trillion euros, in the period 2021-2030, to be addressed to the Trans-European Transport Network (TEN-T). The project will also be supported by the European Investment Bank (EIB), the European Fund for Sustainable Development (EFSD +), the European Bank for Reconstruction and Development (EBRD) and by private and international financial institutions.

In a moment of shuffling of the cards on the international scene, Brussels does not underestimate the advantages of connectivity with an emerging area of ​​the world: thinking about the future means relaunching relations with the Asian continent, promoting dialogue and strengthening ties between governments and institutions. financial and private sector actors. 

0 Share
Annalisa Manzo published in Asean, Economy and trade

Rita Bonucchi: "ASEAN fosters innovation, it is impossible not to be there"

ITALY-ASEAN / We begin a cycle of interviews and insights on Italian companies and realities present in Southeast Asia. This interview puts the spotlight on the CEO of Bonucchi e Associati Srl, a consulting company based in Milan and Singapore.
Rita Bonucchi is CEO of Bonucchi e Associati Srl, a management consulting company based in Milan and Singapore (since 2011), which deals with international marketing, export and internationalization strategies, with a long and solid presence in Southeast Asia. She is an Export Strategist, experienced trainer, and Management Consultant. Since 2020 she has also founded BeaConsulting Pte Ltd in Singapore, focusing on local clients and projects.

How did your business in ASEAN start?

Nel 1993 ho avviato un’attività di consulenza per la pianificazione marketing. All’epoca, non essendo così sicura dei volumi di lavoro, ho accettato un progetto di supporto al procurement di guanti monouso. Questo settore era distante dal mio solito focus di lavoro.  Partendo da quella che fu una scelta casuale, ho iniziato a frequentare l’ASEAN dal 1993 e, in seguito a quell’incarico, avendo accumulato contatti e conoscenza di territorio, ho continuato a seguire altri progetti, che tuttavia restavano marginali rispetto alla mia attività principale.

In 2010 I supported the drawing up of a business plan for a consulting activity based in Malaysia. The following year my company, Bonucchi e Associati, came of age. From 1993 to 2010 we accompanied many companies in their internationalization strategies. So, I realized that the time to go abroad had come for us too. Internationalizing a service company is not easy, there are far fewer models. We decided to apply the same modus operandi that we use for our clients: checkup, selection of destinations, plan. The selection of destinations brought out ASEAN, also thanks to all that experience which began by chance. After an initial focus on Malaysia, it was clear that Singapore was the most suitable place for us. we have been investing in Singapore since 2011. Initially, we looked for partners and collaborators. Then we began to stabilize and set up a headquarters in Singapore, also investing in business trips. We went on more than four trips a year, with long stays, especially in summer.

In addition to this, a series of international projects for the European Commission took me to Indonesia, specifically to Bali. There I followed projects for SMEs and local artisans on empowerment for exports to the European Union. Following clients, missions, institutional projects, we reached another turning point in our history in ASEAN. In 2018 we became consultants for a government agency, Design Singapore, which deals with the promotion and development of Singapore design, locally and abroad. We are consultants for the internationalization in Europe of various Singaporean designers and architectural firms. Now we play a bigger role in this project, leading us to have even more specific needs. Until February 2020, I was flying to Singapore every month. A wide-ranging job with a very positive impact on our visibility in Italy, as part of this task, requires a matching between Singaporean designers and Italian producers.

What are the focal points of your work in Southeast Asia?

We do not have a closed sector specialization, but in the last ten years, we have focused our activity in ASEAN on a few sectors, including cosmetics and the whole beauty world. We handle the internationalization process in Southeast Asia of Cosmetica Italia, the association of cosmetics manufacturers within Confindustria. The other sector we focus on is Design: architects, engineers, manufacturers of systems, materials and products that have their destination within a building, up to furniture and furnishing textiles. We are now working a lot with the medical and agri-tech sectors. It is Singapore that guides us according to the new trends and fields it focuses on. We are equipped to follow the trends, also thanks to our local clients. Since 2020 we have found a 100% subsidiary company in Singapore, BeaConsulting pte ltd, focusing on local clients and projects. We operate both as an Italian company in Singapore and as a local company.

What are the reasons that led you to invest in Singapore?

ASEAN fosters innovation, that's where things happen. This is the strongest motivation. We can not be there. It is a conviction for us and our clients, not a simple geographical attraction. Not being present in ASEAN means losing not only a slice of the business but above all the main wave of innovation, in terms of quality. It is a privileged observation point, particularly in Singapore, where many currents meet, especially those relating to the digital world. All the typical tools of the Western world and China are present. There is an enormous local liveliness, very visible from the e-commerce sector. Not being there means missing a piece of opportunity.

Other reasons concern the lifestyle and the way of doing business. In Singapore I become more productive, I work on networks much more intensively. Times are compressed: from the beginning of a business proposal to its closure, it takes less time, compared to Italy. The environment is more international. Even if I work in Milan, I feel that Singapore's speed is higher. There is a more developed international community, a concentration of capital that is of particular interest to startups and which tends to increase along with the growth of venture capital. The speed in the establishment of companies is predominant. Over the past year, we have set up various companies for our clients and opened checking accounts without physically being in Singapore, with relatively simple processes.

We employ a model whereby SMEs land first in Singapore and then cover the rest of the ASEAN countries. A traditional model, which response to a single consideration: many of the SMEs we dialogue with are neither ready to choose a single country nor to bear the costs and commitment of a settlement in terms of industrial and intellectual property, legal certainty, starting a business. In our opinion, Singapore remains unbeatable. The time to open in Vietnam, Thailand, Indonesia, and Malaysia can always come. Often, we find partners in Singapore who help us cover the other markets in the region.

Today, how is the response from Italian clients?

Our ten years of experience in the field gives us the strength that clients need. We still cannot get to their settlement that quickly. In addition to finding a partner in Singapore, we encourage companies to set up there as soon as possible and take advantage of the regional advantages, not least the grants available for companies with foreign capital. However, this vision is not yet fully embraced by the companies with which we dialogue. It takes more effort to get them to decide on a direct settlement. The most frequent request remains the development of an export project and the search for distributors. For this kind of service, we are accredited with the main funding programs (Maeci/Invitalia, Simest and others). For some products, we also push for direct access to local e-commerce.

History of your entrepreneurial activity: present and future developments.

Our present leans on our collaborators in Singapore who have allowed us to move forward during this period. First of all, our Project Manager Marianna Fichera.

Bonucchi e Associati is both in Milan and Singapore. The method and the work team are the same, although we are based in two different locations. This is very unusual for companies of our size. We also have local partners who, from the very beginning, have helped us to take root. They are still our point of reference in both Singapore and Malaysia. We can work at different levels because we can count on different types of collaborators. Through our group of collaborators on-site we increase our focus on ASEAN.

Thanks to our role as the brand ambassador of MM Design in Singapore, an award-winning industrial design studio, and membership in various local associations, we have achieved important recognitions as consultants and experts. Local companies can obtain funding from various Singapore government agencies even when working with us. We are working to be equated with a local consulting company also for the benefits reserved for the clients themselves.

We recently changed our headquarters in Milan, replicating what we have in Singapore inside the National Design Center. Paperwork is the co-working space that houses our office for the local team in Singapore, allowing us to benefit from the innovative and vibrant reality of the hub for the Asian market. To reproduce the model already tested in Singapore, we moved our headquarters to YoRoom space, a community of companies, freelancers, and start-ups, where talents and ideas meet in the heart of the Isola/Garibaldi district in Milan.

For the future, we expect a balance of employees in Singapore and Milan, maintaining the concept of a single team, hoping to return to travel soon. Having also strengthened the network that allows us to work in other ASEAN countries, we will formalize and strengthen these relationships. Singapore, Indonesia, and Malaysia are very well manned, followed by Thailand and Vietnam.

Which impact did the Covid-19 pandemic have on business processes?

The pandemic came while we were on the launchpad for many projects. At first, it was complicated, especially for the event’s cancellation, but then we figured out how to adapt to the situation, changing the way we work. Now we have settled down again. 

The inability to travel from country to country is the biggest damage, so we are increasing the emphasis on Singapore. In all the projects, we initially focus on Singapore, expecting to be more incisive on the other countries as well. Before the pandemic, the work involved continuous movement. Now we have to wait and use our local references more. That very strong mobility is still unimaginable, which is one of the main characteristics of the ASEAN market. The lack of mobility was the most significant impact, which led us to concentrate on sectors that have their focus in Singapore: health-tech, agri-tech and food-tech, food security and supply chain, circular economy. 

Regarding the sector of sustainability, we are involved in Coffeefrom, a circular economy project that creates, for example, cups with coffee grounds. The pilot project is in Italy, and we have the task of replicating it starting from Singapore. With the Green Plan 2030, Singapore is certainly the most visionary country in this direction. In addition, agglomeration economies are created, there is a great opportunity both to meet companies in the sustainability sector and their stakeholders. There are venture capital funds exclusively dedicated to startups committed to sustainability, such as Pufferfish Partners. In the need to work remotely and not being able to physically participate in events, it has become more important to deepen and maintain the virtual network with these subjects.

The role of women in Singapore entrepreneurship.

In Milan, we are a group of women and in Singapore, we have maintained this prevalence. I am very dedicated to the enhancement of Italian female professionals present in Singapore. I am a member of the Italian Women’s Group Singapore (part of the Singapore Business and Professional Women’s Association), which unites more than 120 Italian women in Singapore: managers, entrepreneurs, and many women who have moved for family reasons. In the latter case, very often their professional skills are compressed. Many professions are not replicable in Singapore, for example, those related to the legal world. In other cases, the continued mobility of the spouse makes it impossible to replicate a certain type of activity. Some women who work or have worked with me come from this range. Until now it was possible to make them work with the letter of consent for a visa, which can no longer be requested from May of this year, making the situation even more critical.

In Singapore, there is a highly developed female entrepreneurship, where comes out the role of Christina Teo of she1K, a competition open to female startups. The initiatives financed by CRIB are also very interesting. Singapore is a multi-ethnic country, sensitive to equal opportunities. Unfortunately, many professionals exported from Italy suffer a compression. To the present day, it is a wasted asset. Some women move from Italy with a position of value and do not find the possibility of continuing to express it in this framework. Some women opt for creating their businesses. There are interesting activities related to jewellery production, such as Italian Hands by Ilenia Circolani, and psychomotor skills, such as Sparkd | The Brain & Fitness Hub, founded by Anna Milani. However, in other sectors, it is not possible to have the same opportunities as in Italy.

0 Share
Sabrina Moles published in Asean, Culture and society

NFTs: a new normal for the ASEAN digital art market?

By Sabrina Moles

The decentralized and intermediary-free market based on blockchain is also gaining momentum in ASEAN. NFTs do not only protect copyrights in the digital world: for workers in emerging economies it is a real alternative to earning

The train of non-fungible tokens (better known as NFTs) has also arrived in Southeast Asia and it is already becoming the main tool for groped success in a new investment sector among art investors. First of all, let's clarify what NFTs are: as the name itself implies, these types of goods are not fungible, that is, interchangeable. This means that each NFT is not equal to the other, thus allowing investors to get hold of something unique and unrepeatable. Anything can be registered as an NFT in the blockchain, which more precisely is based on the system provided by Ethereum (the technology behind the second most widespread cryptocurrency after Bitcoin). The ecosystem created by Ethereum is defined by a blockchain without intermediaries where these ‘smart contracts’ circulate, are bought or sold.

It didn't take long for the NFT-effect to become the new trend around the world, becoming a topic of debate among cryptocurrency enthusiasts and investors as an exceptional tool in a scarce market. One of the biggest uses of NFTs today is in the digital art market. Thanks to this technology, files of any type are labelled, to which a certain value is attributed also by their being a unique, collectable piece. Works sold as NFTs, just like those existing on real economy markets, can be worth thousands, if not millions, of dollars. This is a revolution for the world of digital art, where it has always been easy to counterfeit and steal works. But that's not all: artists thus have more freedom to sell their works without having to go through the traditional channels of mediators and exhibitions. This creates a system that not only reduces operating costs but amplifies the opportunities to reach the ideal audience. As Singapore photographer Shavonne Wong told Art Sg: “NFTs have given me space where I can really do what I want, without outside direction. It's a very liberating experience. "Finally, NFTs are creating spaces to experience a new artistic experience that pushes the boundaries of the perception and conceptualization of physical works." With NFTs, there is a greater chance to explore the digital approach that I integrate into my artistic process and to show more works in motion graphics ", says Indonesian artist Radhinal Indra. For the most passionate about this new world of digital trading and investments, NFTs are a real revolution, which could soon land in the world of traditional finance. In this market, the opportunities for artists to earn money by selling works of art and unique pieces such as NFT are rapidly multiplying.

NFTs, as elements created and exchanged in the blockchain, can be produced through mining activities - a two-way process where those who offer hardware systems or help make part of the blockchain work obtain another cryptocurrency in exchange. The world of gaming is another function of NFT that is depopulating in ASEAN countries and in emerging economies in general, where 80% of the so-called "miners" come from. Even spending a certain amount of hours a day on a video game is equivalent, in fact, to a mining process. In Southeast Asia, for example, as Nikkei Asia recounts, the Axie Infinity game has become a stable income for many precarious workers in the world of work. As one of the interviewees, the Filipino Gilbert Jalovaal, tells us, at least two hours a day spent on the platform allow to extract enough NFTs that converted into local currency or Ethereum to reach figures far higher than his monthly salary.

Many different realities are jumping on the NFTs train, a free environment where - at least for now - the only limit seems to be the analytical tools to fully understand its potential. Decentralized finance, as the NFT-based system can be defined, is a process that is being enriched thanks to this heterogeneity of contributions. There are realities such as the Tropical Futures Institute, a multidisciplinary studio based in the Philippines, which have been researching and participating in the cryptocurrency ecosystem in the art world since 2015. Sometimes stories of great solidarity and collaboration emerge, such as the Filipina's project Narra Gallery has created a virtual fund dedicated to artists who wish to approach the NFT universe. Buyers can access the site and purchase the works through a cryptocurrency offer: a sort of virtual auction.

It is still too early to say whether the enthusiasm of the art world (and not) towards NFTs will have a future, just as it is premature to see them spread widely in Asia. For now, ASEAN countries offer some of the most creative spaces in this sense, and it will be interesting to observe how the NFT ecosystem will evolve in this part of the world. It is only the beginning of an experiment that is having great success but could explode like other "bubbles" of the past.

0 Share
Agnese Ranaldi published in Asean, Politics and strategy

US and China to collide over digital trade in Southeast Asia

The US proposes a digital “Marshall Plan” in the Indo-Pacific. Biden wills to counterbalance the Chinese influence in the region, but Southeast Asia has very close relations with Chinese technology companies

The Biden administration is discussing a proposal for a digital trade deal in Asia-Pacific to revive the US role in the region. President Donald Trump had downsized Washington's international leadership with a series of unequivocal moves: among others, interventions against the institutions of the liberal international order and the abandonment of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in 2017. Joe Biden changes course, and after having spent the first months of his presidential mandate strengthening existing agreements and retracting the positions taken by his predecessor, he is considering launching what has been called a digital "Marshall Plan" for Asia and the Pacific. According to analysts, besides the economic interest of US brands and investors, strengthening Washington's presence in the region is also a way to counterbalance Chinese influence. Wendy Cutler, from the Asia Society Policy Institute in Washington, said the deal "would bring the United States back into the business game in Asia while considering the benefits of rejoining the Comprehensive Transpacific Partnership Agreement (CPTPP)."

Apparently, the goal is to create a paradigm of shared standards for the digital economy, which includes rules on the use of data, electronic customs agreements and trade facilitation. Countries such as Japan, Malaysia, Singapore, Australia and New Zealand would be included in the project. As the associate director at the Information Technology & Innovation Foundation Nigel Cory contends, when negotiating commercial treaties, the difficulty lies in having to reconcile different and sometimes divergent demands, such as those on work, services and environmental regulations. "It is a very challenging and complicated task" he noted, "while with specific agreements for digital commerce it is a little easier."

Moreover, Southeast Asia has already embarked on the path towards greater digital integration. The region is currently home to around 400 million internet users, 10% of whom landed online for the first time in 2020. ASEAN's efforts are moving towards greater international cooperation on the issue, both between member countries and between the 'Association and its dialogue partners. As the Singapore Minister of Communication and Information Josephine Teo pointed out, the fragmentation of the technological and digital space should be prevented by stepping up efforts towards partnerships that foster digital commerce in the area. “We should look for more partnerships, not fewer” he suggested, “instead of technological bifurcation, we are actually trying to have more interoperable systems and standards (...) [to] promote cross-border data flows and grow digital commerce that will help our businesses, both large and small ".

However, the anti-Chinese strategic interests of the United States are a controversial issue for Southeast Asia. Although the relationship between the ASEAN countries and China may be ambivalent, the possibility of being co-opted into the Atlanticist countries is not a trivial matter. The Chinese technology giants invest heavily in the region: between infrastructure, trade and financing they represent a real resource for local economies. Large Chinese companies such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have spearheaded a wave of investment among ASEAN countries in recent years. This week, national representatives from some Asian countries expressed support for Biden's proposal, taking care to avoid any mention of Beijing's potential exclusion. Malaysian Commerce Minister Azmin Ali welcomed the idea and called on American companies to use his country as a "gateway" to Southeast Asia. All this just a few days after Kuala Lumpur's decision to choose Ericsson and not Huawei for the development of the 5G network infrastructure. Move that was noted in Washington. while Singapore has suggested that the deal has the potential to create "open and trusted global digital commons". In any case, as analysts have observed, greater exposure of Southeast Asia to Western rules can undermine the relationship with Chinese technology companies, advocates of a totally different approach to privacy, transparency and surveillance.

Some Chinese state media have negatively welcomed the White House proposal. They have accused the US administration of hypocrisy, accusing it of promoting a treatment that is only apparently on par with Southeast Asia, which lacks the adequate economic stability to enjoy fair trade with the US. According to the Global Times, the United States has adopted a zero-sum mentality to promote discord and instability in the region. One of the sectors in which ASEAN and China cooperate most profitably are digital infrastructures, which would create the preconditions for developing the virtual commerce sector. The economies of the Indo-Pacific seem willing to take advantage of cooperation with Washington, without giving up the intense relationship with Beijing. Regional stability remains the top priority of all the actors involved, which is why the most disruptive geopolitical consequences of a digital trade agreement with the United States will have to be mitigated.

0 Share