Potential for Asean to ride on China’s Belt and Road Initiative
By Chong Jinn Xiung June 12, 2018
- Asean should not be viewed or treated as a single market
- Injection of ‘China gene’ into local companies could spur greater innovation
THE Association of Southeast Asian Nations or Asean has been in existence for just over 50 years. It is the seventh largest market in the world and is made up of 10 countries. However, not much progress has been made due to the vast diversity in the countries that make up its members from the perspective of their economies, politics, language and culture.
But, what if China’s One Belt, One Road or now known as the Belt and Road Initiative (BRI) becomes the unifying factor to bring about greater collaboration within Asean? That was the question posed during a panel session at the recently concluded Innovfest Unbound 2018 in Singapore.
The three-person panel made up Ideasource Venture Capital managing partner Andi Boediman, Savant Degrees chief executive officer and founder Zi Huan Wee and Accenture senior managing director Chong Chuan Neo shed some light on the topic. The session was moderated by Global Entrepreneurship Movement chief executive officer Low Ngai Yuen.
Low started by saying that Asean, unlike the European Union, is a community of countries that are so different from one another, hence it remains a great challenge to bring about collaboration.
With an estimated population of over 600 million people, many of whom are fairly young and the emergence of a fast-growing middle class, there are plenty of opportunities in the region.
It is exactly because of this untapped potential that China has expressed great interest in the Southeast Asian region to expand BRI. On one hand, large infrastructure projects will indirectly result in transfer of technology and accelerate the country’s forward.
Admittedly, however there is scepticism from Asean countries that the rapid pace of development pushed by China would not entirely be beneficial or at worse mire them in debt.
Ideasource Venture Capital’s Boediman cautions that companies from China should not view Asean as one single market as it is much more complex than that. He cites how in Indonesia itself, the market is complex with the country’s many islands posing a logistical challenge for any entrant.
Zi however is optimistic that a combination of China’s investment into Asean and greater adoption of e-commerce and trade between countries will be the glue that connects the different countries together. With the transfer of services, people and knowledge, there will be lots of opportunities for startups to be involved in facilitating e-commerce and trade.
Accenture’s Chong raises the point that more Chinese companies want to invest in local companies and want to inject the “China gene” into them so that they will be more innovative and hopefully be more willing to take risks.
There is no denying or doubt that the BRI has created a bridge to China for Asean countries. Without funds from China, infrastructure would not be built as fast, though those who accept China’s money must be prepared to accept some conditions as well.
With any luck, Asean will benefit from the accelerated pace in innovation and band together to innovate better than even the countries from the northern hemisphere, at least that is Zi’s hope for the future.