Singapore warns of China's rise
Singapore warns of China's rise
Agence France-Presse, Singapore
Singapore pushed Monday for a unified Southeast Asian economy, warning China's rise on the world stage carried "deep implications", particularly for the income of developing countries.
The Association of Southeast Asian Nations (ASEAN) must "promptly adjust in order to rebalance China's effects on the region," Environment Minister Lim Swee Say told a forum on the challenges of ASEAN-China cooperation.
"ASEAN, with its 500 million-population base and vast resources, will greatly enhance its competitiveness as a region if it could prevail as a single unified economy," he said.
"As an integrated market, ASEAN can better complement China and dispel concern over marginalisation. The ASEAN Free Trade Agreement promises to do just that."
Lim said China's rise and "continual opening of its economy have deep implications on Asia" with anxiety among ASEAN members over Beijing's capacity to attract investment.
With China's accession to the World Trade Organisation it was now attracting about 50 percent of foreign direct investment into East Asia compared to 20 percent for the 10-nation ASEAN grouping.
"The change in capital flow to China is real. This could deprive ASEAN of much-needed technologies and expertise," he said.
"While it is simplistic to assume that 'Made in China' products will crowd all other exports, developing countries may indeed suffer a real drop in income if they do not adjust quickly to meet the growing challenge."
To increase ASEAN's attractiveness, it was important to reduce the political risk in investing in the region, Lim said, citing "clean governance and political stability" as fundamental prerequisites.
The extent and level of cooperation between ASEAN and China rested on "two vital ingredients -- political will and a deep pool of knowledge and mutual understanding," he said.
"Amid the painful process of social, economic and political restructuring, it will require great political will from both sides to push for further economic opening and integration.
"The challenge for the political leadership is to build a vision of cooperation and bring the two regions closer, keeping firmly in mind the long-term benefits."
Work has begun on preparing a giant ASEAN-China free trade zone within 10 years with a projected two billion consumers, a gross domestic product of almost two trillion dollars and two-way trade of 1.23 trillion.
Although studies have shown ASEAN exports to China will grow 48 percent and China's exports to ASEAN will increase 55 percent as a result of the free trade agreement, Lim said not all ASEAN countries would benefit equally.
He said the aim was to negotiate a substantive agreement that would take into account the different levels of development within ASEAN.