China’s mercantilist threat to ASEAN is exaggerated

Author: Christian Bachheimer, SOAS China’s growing influence on ASEAN affairs has featured increasingly in international news. The dominant narrative is that China is deploying a mercantilist strategy to drive ASEAN acquiescence to matters of diplomatic importance for China, forcing ASEAN states to choose between China and the United States. But ASEAN’s trade in goods and […] The post China’s mercantilist threat to ASEAN is exaggerated first appeared on East Asia Forum.

China’s mercantilist threat to ASEAN is exaggerated

Author: Christian Bachheimer, SOAS

on ASEAN affairs has featured increasingly in international news. The dominant narrative is that China is deploying a to drive ASEAN acquiescence to matters of diplomatic importance for China, forcing between China and the United States. But from China and other geopolitical alliances from 2015 to 2019 present a different narrative.

ASEAN-5 — — collectively constituted 84 per cent of ASEAN’s and accounted for over 90 per cent of its trade and investment flows. Data analysis of trade in goods for 2015–2019 reveals that the main geopolitical blocs consisting of the ‘US alliance’, ‘Atlantic alliance’ and ‘China bloc’ did not evolve as a share of ASEAN-5’s economies. The China bloc — China, Hong Kong and Macao — represented 20 per cent of trade with ASEAN-5 in 2015, and 21 per cent in 2019. 

The US alliance — Japan, South Korea, and Australia — leads trade with ASEAN-5, adding US$143 billion over five years to reach US$741 billion in 2019. The China bloc only reached US$543 billion. The Atlantic alliance consisting of the United States and European Union added US$117 billion, growing from 19 per cent to 21 per cent of ASEAN-5 trade.

ASEAN-5 is not becoming reliant on trade with China. Trade in goods as a percentage of GDP reflects From 2015 to 2019, the US alliance and the Atlantic alliance maintained a level with ASEAN-5 of 29 and 20 per cent, respectively. ASEAN-5’s ratio with the China bloc decreased from 20 to 18 per cent. Only Vietnam significantly increased trade in goods with the China bloc, rising from 38 to 48 per cent. But Vietnam also boosted the same ratio with the US alliance, rising from 63 to 79 per cent.

On the Foreign Direct Investment (FDI) front, China remains a relatively small player. The US and Atlantic alliances still dominate ASEAN-5’s investment landscape. From 2015 to 2019, the US and Atlantic alliances cumulatively invested US$346 billion, more than three times the US$99 billion bankrolled by the China bloc in ASEAN-5.

The average FDI inflow into ASEAN-5 stood at US$144 annually between 2015 and 2019. The China bloc increased its FDI from US$7.9 to US$21.9 billion, pushing its share of the ASEAN-5’s FDI inflow from 7 per cent to 12 per cent. Meanwhile, the US alliance increased its FDI from US$43.9 to US$70.9 billion, causing its share of ASEAN-5’s FDI inflow to rise from 37 per cent to 39 per cent. 

On the annual importance of FDI inflow as a proportion of ASEAN-5 GDP, China went from 0.4 per cent in 2015 to 0.8 per cent in 2019. The US alliance went from 2.1 per cent in 2015 to 2.7 per cent in 2019, reinforcing its position. The China bloc’s share of FDI stock grew from 6 per cent in 2015 to 8 per cent in 2019. Over the same period, the Atlantic alliance and the US alliance remained relatively constant at 37 per cent and 31 per cent respectively.

The much lauded Belt and Road Initiative () is not as large as has been trumpeted, despite the US$739 billion The BRI accounted for in annual investment into ASEAN-5’s US$144 billion average annual FDI inflows. For the last five years, the BRI has contributed US$4 billion to the Indonesian annual average and US$1.5 billion to the Malaysian average annual . investment so far, rebutting the

While the BRI it is not shifting ASEAN-5’s allegiances. The BRI also faces and is unpopular at home while its and continue to . Contrary to what media reports suggest about China achieving diplomatic leverage through its oversized trade and investment involvement, China’s economic role has remained stable over the last five years.

China’s involvement in Southeast Asia should not trigger concern over a mercantile system. The China bloc’s and in ASEAN countries have stalled its trade leverage, particularly as ASEAN-5 has maintained a

Competition can actually to extract trade concessions and investments from both sides — While the economic data disproves the existence of an ASEAN dependency threat, this does not mean that China no longer poses in the region. But the link between China’s economic involvement and a security risk is weak at best. So far, ASEAN-5 has not tilted toward China.

Christian Bachheimer is a Doctoral Researcher at the School of Oriental and African Studies, University of London.

The post China’s mercantilist threat to ASEAN is exaggerated first appeared on East Asia Forum.
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Pro-Beijing Media Target Hong Kong Trade Union, Labor Groups in Latest Denunciations

The pro-democracy Confederation of Trade Unions appears to be next on Beijing's hit-list under a city-wide crackdown on dissent.

Pro-Beijing Media Target Hong Kong Trade Union, Labor Groups in Latest Denunciations

Hong Kong newspapers backed by the ruling Chinese Communist Party (CCP) stepped up their denunciations of independent trade unions in the city on Friday, amid an ever-widening crackdown on civil society under the national security law.

The Beijing-backed Wen Wei Po and Ta Kung Pao newspapers on Friday reported that Hong Kong's pro-democracy Confederation of Trade Unions (CTU) would be the next civil society group to disband following denunciations by CCP media.

"Our information indicates that the CTU will soon disband," the report said. "The executive committee met on Sept. 16 to pass the resolution, but it still needs to be formally approved at a general meeting on Oct. 3."

The report accused the CTU of prompting a "tsunami" of new union registrations during the 2019 protest movement, and of "promoting anti-Chinese sentiment and unrest."

"They have deviated utterly from the purpose of a trade union under the law, steal from industry, and divide society," the paper said, naming veteran labor activist Lee Cheuk-ying, who is currently serving a 14-month jail term for his role in the 2019 protest movement.

It also singled out Winnie Yu, the founder and chairwoman of the Hospital Authority Employees Alliance, a labor union representing Hospital Authority staff.

Political denunciations in CCP-backed media are increasingly being used to target civil society groups and NGOs in Hong Kong.

The denunciations usually focus on accusations that a given organization has done something that could be in breach of a draconian national security law imposed on Hong Kong by the CCP from July 1, 2020.

Several groups disband

Several organizations, including protest march organizers the Civil Human Rights Front, the Professional Teachers' Union, and Wall-fare, a prison support group for those in custody because of the 2019 protest movement, have disbanded following similar articles, or after being criticized by Hong Kong's leaders.

The Hospital Authority Employees Alliance said it had recently received a letter from the Registry of Trade Unions alleging that its funds were used for "political purposes."

The group's questioning of the effectiveness of Chinese-made COVID-19 jabs and the government's LeaveHomeSafe app, and its setting up of street booths were also listed as matters requiring explanation, government broadcaster RTHK reported.

"Our alliance's legal status and the past activities we organized, including the strike to fight for reasonable rights, should be protected by international covenants and the Basic Law," it quoted acting chairman David Chan as saying.

He declined to comment when asked if the alliance has any plans to disband, RTHK reported.

Meanwhile, another labor NGO, the Asia Monitor Resource Centre, said an article published in the CCP-backed Ta Kung Pao newspaper was inaccurate.

"For decades, we [have been] a civil society organization independent of any local or international organizations," it said. "We are not a subsidiary unit of any of the organizations as wrongly described in the Ta Kung Pao article."

The group said it plans to shut down its Hong Kong operations by the end of September and relocate elsewhere in the region.

"The pressure on our operation has intensified significantly," the group said in a statement on its website. "Therefore, we feel that we are left with no choice but to cease operating in Hong Kong by the end of September."

Pattern becoming clear

Chung Kim-wah, deputy chief executive of the Hong Kong Public Opinion Research Institute (PORI), said the pattern of denunciation leading to investigation by the authorities is becoming increasingly clear in Hong Kong.

"We have seen so many similar occurrences, in which the Ta Kung Pao or the Wen Wei Po post articles listing [alleged] crimes, sometimes photos, and even stalking some people," Chung told RFA.

"Maybe the first thing the secretary for security does when he gets to work in the morning is look at the Wen Wei Po or Ta Kung Pao to see which groups they are targeting, and make a list," he said.

"It looks as if the [pro-CCP] media are running Hong Kong now."

Set up in 1990, the CTU sprang from the work of the Hong Kong Christian Industrial Committee (HKCIC), a church-backed grassroots labor group active during the 1970s and 1980s.

A coalition of independent and politically unaffiliated union organizations, its membership consisted largely of white-collar unions organizing the civil service and professional or service employees in the public and subvented sectors, including the now-disbanded Professional Teachers' Union (PTU) and the Hong Kong Social Workers General Union.

Both former leaders Lau Chin-shek, a founding member of the Democratic Party, and Lee Cheuk-yan went on to be elected to the city's Legislative Council (LegCo).

The CTU was involved in a number of mass protest movements, including the July 1, 2003 march to oppose national security legislation, which was eventually imposed on the city by the CCP on July 1, 2020.

It was also instrumental in founding Hong Kong's Labour Party in 2005.

Translated and edited by Luisetta Mudie.

Source : Radio Free Asia More   

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