US’ decoupling push weakens as China-ASEAN ties build

US’ decoupling push weakens as China-ASEAN ties build

Despite the US' tireless efforts to promote its "decoupling" from China and the ongoing deadly COVID-19 pandemic, China and the Association of Southeast Asian Nations (ASEAN) have forged more highly integrated economic and trade ties, overthrowing the basis of the US' scheme to isolate China from global industrial chains.

While China's overall non-financial direct investment overseas edged down 0.7 percent year-on-year in the first half of 2020, its investment in ASEAN surged 53.1 percent during the period, per data from China's Ministry of Commerce. ASEAN has now replaced the EU as China's largest trading partner.

Since last year, the upgraded protocol of the China-ASEAN Free Trade Area (CAFTA) has fully come into effect, facilitating the acceleration of investment in the area. And the surging investment has paved the way for the comprehensive initiation of the Regional Comprehensive Economic Partnership (RCEP), which is expected to be concluded by the end of the year.

Years of cooperation between China and ASEAN has generated strong momentum to continuously drive up both the quality and quantity of economic cooperation within the area, even under the fallout of the coronavirus pandemic.

It is true that the pandemic has shattered global industrial and supply chains and has added to the pressure brought about by the US' intensified suppression and containment of China.

However, the previous global industrial chain has already entered a phase of re-structuring and upgrading. The traditional global industrial chain - manufacturing in developing countries and consumption in Western countries - needs to be remodeled as China, Japan and South Korea have been transforming into major final consumption markets. In accordance with the historical trend of global industrial chains moving eastward, optimized and upgraded industrial chains within the Asian region will be more efficient and cost-effective.

With deeper ties between China and ASEAN, the US' decoupling China campaign could no longer hold water, diminishing the effectiveness of the US' use of trade weapons to crack down on other economies.

Though the pandemic continues to spread across the world, the Asia-Pacific region remains the most dynamic region for economic growth. Cooperation between China and ASEAN members has seen particularly promising growth momentum on the basis of all-round cooperation in the economy, politics and security. China has remained ASEAN's largest trading partner for 11 consecutive years.

The US is currently ramping up efforts to stir animosity in the region, aiming to confront China yet again and attract support from other countries. But ASEAN members have long held a strategy of balance among great powers, which is in line with their national interests. Forcing any of them to side with the US will eventually damage them. Conversely, cooperation between China and ASEAN, as well as other Asian economies, is promoted by internally-driven development, which benefits all parties.

The author is director of the Center for Southeast Asian Studies of the Chinese Academy of Social Sciences es un sitio web oficial del Gobierno Argentino