ASEAN’s Economy Can Fall Apart if It Drops Neutral Stance on US-China
Jakarta. ASEAN’s economy can fall apart if it chooses to pick sides amidst the growing tension between its trading partners US and China, according to an expert.
Lili Yan Ing, the lead advisor for Southeast Asia at the think-tank Economic Research Institute for ASEAN and East Asia (ERIA), said that the regional grouping’s trade with Washington and Beijing had significantly grown over 2000-2022.
ASEAN-US trade jumped from $135 billion to $452 billion, marking an over threefold increase. ASEAN’s trade with China saw a whopping 24-fold jump as the numbers skyrocketed from $39 billion to $975 billion. The Southeast Asian bloc also witnessed robust growth in its trade with Europe, rising from $110 billion to $342 billion over the said period.
“Asking ASEAN to decouple from China or stand aside [from] any other countries, be it Europe, US, or any other major trading partners … This will destroy ASEAN’s trade and overall economic growth,” Lili told the Bloomberg CEO Forum at ASEAN on Wednesday.
The US is slated to hold its presidential election in Nov. 2024. Regardless of who runs the office, the US’ stance towards the US will unlikely change. In other words, there are no signs of the US-China tension cooling down.
“Be it the Democratic or the Republican Party, the US foreign trade policies towards China will remain the same. Likewise China towards the US. This kind of trade, technology, and security tension will be escalating. And ASEAN should be prepared for that,” Lili said.
The senior economist also commented on the US-led “friend-shoring” policy, which sees firms moving their manufacturing to friendly countries. She said this might not be the best policy for businesses to undertake as the decision would not be based on efficiency and costs of production.
“So again for ASEAN, we will strike a balance [between the US and China]. We will not take any side. [ASEAN will] keep a positive engagement with China, the US, Europe, and any other trading and investment partners,” Lili said.
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