BRI & APEC Matching Boxes: An Expert Opinion
Dawn of economic corridors has changed the landscape of regional as well as global economic partnerships. Interestingly, initiation of One Belt & One Road Initiative (BRI) in 2013 has further strengthened the concept of greater regional connectivity, infrastructure development and shared prosperity in the world.
Moreover, the 29th Asia-Pacific Economic Cooperation (APEC) summit will be held in Bangkok, from November 18 to 19.
Thailand has set the theme of APEC in 2022 as “Open”, “Connect” and “Balance” which means open to all opportunities and connect in all dimensions and balance in all aspects which is holistic in nature and comprehensive in execution.
The APEC is a huge regional economic forum established in 1989 to leverage the growing interdependence of the Asia-Pacific.
It has 21 members aiming to create greater prosperity for its people through balanced, inclusive, sustainable, innovative and stable economic growth and social integration and accelerating regional economic integration which has many similarities with BRI.
APEC constantly ensures that goods, services, investment and people move easily across borders and promotes multiculturalism in which the Chinese shared prosperity is a value addition.
Member countries facilitate free trade through faster customs procedures at borders; more favorable business climates behind the border; and aligning regulations and standards across the region and BRI also stands for inclusive growth, economic sustainability and greater regional connectivity.
Therefore APEC and BRI have great matching boxes which are good for the Asia-Pacific region and beyond. Therefore both should be clubbed and coordinated for achieving the desired goals of socio-economic prosperity and multiculturalism.
Additionally, APEC and Chinese BRI are both mega operating mechanisms/systems and engines of regional as well as global economic growth which have already clubbed together a number of developed and developing countries.
Hopefully, APEC and the BRI can promote befitting propositions of cooperation and the potential impact of these two international giants is limitless. Furthermore, it would extend cooperation in industrialization, energy, IT, ICT, AI, infrastructure, supply chain, green finance, logistics management, shipping and aviation.
Good thing is that APEC and the BRI share the same direction. The integration and cross industry cooperation of various industries cannot only increase sustainability but also produce other benefits.
The members of the BRI come from all over the world and new members will continue to join. APEC should consider establishing a formal partnership or alliance with the BRI to achieve a win-win situation. This could be enshrined by signing a memorandum of cooperation.
The 21st century is a period of encouraging cooperation and inclusive economic cooperation. Future cooperation between APEC and the BRI will help achieve end goals of positivity, productivity and participation in the days to come.
According to Chinese official figures, over the first five years of the initiative, more than $500 billion in BRI-related capital has flowed into Cambodia, Indonesia, Malaysia, Singapore and Vietnam alone. Much of this capital comes from Chinese sources for developing transportation links.
These links, like the pan-Asia railway network, will connect to Chinese cities one of the many ways the BRI is weaving the Chinese and regional economies and societies together.
Since joining APEC in 1991, China has always been a staunch supporter of Asia-Pacific cooperation and actively promoted peace, stability and prosperity in the region.
In 2017, President Xi Jinping delivered a keynote speech at the APEC CEO Summit in Da Nang, Vietnam, saying that we should continue to enhance connectivity and achieve interconnected development. With the launch of the BRI China will create a broader and more dynamic platform for Asia-Pacific cooperation.
Right from the beginning, the BRI has been focusing on promoting economic connectivity and boosting interconnected development to achieve common prosperity, which is very much in line with APEC’s strategic roadmap.
At present, the majority of APEC member states have responded to the call of pushing forward the BRI which also conforms to the trend of economic globalization and regionalization.
APEC has grown to become a dynamic engine of economic growth and one of the most important regional forums in the Asia-Pacific.
Its 21 member economies are home to around 2.9 billion people and represent approximately 60 percent of world GDP and 48 percent of world trade in 2018. It covers four continents.
As a result of APEC’s work, growth has soared in the region, with real GDP increasing from USD 19 trillion in 1989 to USD 46.9 trillion in 2018.
Meanwhile, residents of the Asia-Pacific saw their per capita income rise by 74 percent, lifting millions out of poverty and creating a growing middle class in less than three decades.
Till now more than 186 FTAs have been signed among the APEC which shows its forward looking nature and composition.
It seems that the Chinese policy makers will further push forward the agenda of the APEC and continue firmly to promote investment and free and open trade to support the global economy and multilateral trading system.
The Chinese business community will also support APEC in exploring an innovative development approach and promote sustainable and inclusive growth.
According to the Chinese official data, in 2020, China’s trade volume with APEC economies reached $2.87 trillion, accounting for 62 percent of its total foreign trade.
It attracted $124.6 billion of investment from APEC economies and invested $112.3 billion in the region last year. The region contributed to 86 percent and 73 percent of China’s foreign investment and outbound investment in 2020, respectively.
Its collective trade with other APEC members accounts for close to 70 percent of all of China’s global trade. APEC therefore has become and remains China’s single most important trade membership after the World Trade Organization.
Bringing the region closer together, reducing trade barriers and smoothing out differences in regulations have boosted trade which, in turn, has led to a dramatic increase in prosperity in APEC.
Average tariffs fell from 17 percent in 1989 to 5.3 per cent in 2018. During that same time period, the APEC region’s total trade increased over seven times outpacing the rest of the world with two-thirds of this trade occurring between member economies.
On its part, the BRI has been well implemented in the past five years and pushed the investment and trade facilitation further in the Asia-Pacific region.
It provides incentives for APEC to better implement its policies and boost economic development and regional cooperation in the Asia-Pacific region.
Since China and the Asia-Pacific region are closely linked, it is necessary to build a more open Asia-Pacific under the framework of the BRI and APEC to better prepare ourselves for challenges in the future.
More strategic adjustments of APEC and the BRI are the need of the hour. APEC is the highest-level, broadest and most influential economic and trade cooperation mechanism in the Asia-Pacific region.
It is poised to promote trade by establishing the regional free trade zone and strives to improve connectivity and regional economy in the region which will also empower the BRI.
The BRI, which is built on the spirit of openness, inclusiveness and mutual benefits, provides more chances for the Asia-Pacific region to further develop.
Therefore, combining these two forces will be beneficial to sustainable economic development in the region.
APEC is an important platform for economic cooperation in the Asia-Pacific region. Future befitting cooperation between BRI & APEC may be achieved through health cooperation, banking & finance integration, sustainable supply chains, clean energy, de-carbonization, infrastructure development, tax exemptions, anti-corruption codes, human and resources diversification, capacity building and, last but not the least, liberalized economies and communities alike.
Global prosperity and governance is shifting towards Asia and BRI & APEC vividly reflect the true colors of Asia’s resiliency, diversification, multiculturalism, shared prosperity, innovation and strategic vision of peaceful co-existence which have numerous matching boxes.