China and ASEAN：Long—time Friends

Tan Xingyu

This year marks the 40th anniversary of Chinas reform and opening-up.

Forty years ago， China was still one of the least developed countries with per capita GDP of US$156 that ranked 131st in the world， even lower than Mali and Malawi. After four decades of modernization efforts， Chinas per capita GDP reached $8，826 in 2017， 56 times the figure of 1978， which has been hailed as a miracle of human history.

Chinas success has attracted worldwide attention. Renowned Chinese economist Justin Yifu Lin attributed Chinas success experience to two major factors： reform and opening-up. Reform， as he explained， aims to replace old systems that may hinder economic and social development in favor of creating a favorable environment for productivity improvement. Opening-up is an attempt to cooperate with the rest of the world， get involved in global economic cooperation and make positive contributions to international affairs while seeking self-development by utilizing outside resources.

As a close neighbor of China， the ASEAN region as a whole has maintained friendly relations with China over the past 40 years. A look back at the process of Chinas reform and opening-up shows that the bond with ASEAN was always present during almost every stage of Chinas development. Through different methods， ASEAN member states have all supported Chinas policy of reform and opening-up， fostering a favorable external environment for Chinas development. In the meantime， win-win cooperation between China and ASEAN countries has vigorously promoted peace， stability and development in the region.

China and ASEAN have grown together， should-to-shoulder， by leaps and bounds.

1978： Sea Breeze

In January 1978， Deng Xiaoping， chief architect of Chinas reform and opening-up， toured several neighboring countries including Myanmar， Japan， Thailand， Malaysia and Singapore.

Dengs foreign visits on the eve of the reform and opening-up proved fruitful. In Japan， riding the high-speed Shinkansen bullet train allowed the Chinese leader first-hand experience of the modern country. In Singapore， the islands emergence as a developed country within a few short decades truly amazed him. He congratulated Singaporean Prime Minister Lee Kuan Yew on the earthshaking changes occurring in Singapore and invited him to visit China.

From a five-story watchtower atop Jurong Hill， Deng soaked up a panoramic view of Jurong Industrial Park， the largest in Singapore and one of the first in Asia. Thanks to waves of investment from multinational corporations attracted to the industrial park， the once deserted land transformed into arguably the most dynamic economic hub in Asia. In October 1979， Deng reflected on the tour and shared his experience in Singapore on utilizing foreign investment. “First， foreign-funded enterprises pay the government of Singapore a 35 percent tax on their net profits，” he explained. “Second， all the labor income belongs to workers. Third， foreign investment also boosts service sectors. These all contribute to national revenue.”

“Dengs 1978 foreign visits were clearly intended to research neighboring countries development experience for potential reference points for Chinas economic reform，” remarked Zhang Jiuhuan， former Chinese Ambassador to Singapore. “Japans Shinkansen undoubtedly provided a glimpse to the countrys advanced technology， but Deng still focused more on Singapore. Later， he noted that Japan， South Korea and some Southeast Asian countries had all experienced a relatively fast development period or several fast development periods， and that such practice could be reproduced. Shortly after Dengs Singapore tour， the national policy of reform and opening-up was formally adopted at the Third Plenary Session of the 11th Central Committee of Communist Party of China.”

Dengs initial design for Chinas reform and opening-up was largely inspired by Singapores experience. As industrial parks like Jurong sprung up across the country， China gradually integrated into the global economic system. In his celebrated book Deng Xiaoping and the Transformation of China， Ezra F. Vogel， professor emeritus at Harvard University， provided a detailed account of Dengs Singapore visit， asserting that “Singapore firmly convinced him that China needed fundamental reforms.”

1991： Dialogue to Partnership

In 1991， Agreements on a Comprehensive Political Settlement of the Cambodia Conflict was signed， marking the official end of the Cambodian-Vietnamese War that had lasted dozens of years on the Indochina Peninsula.

Peace is a key prerequisite for development. As an important neighbor of Southeast Asia， China is always enthusiastic about contributing to the revival and development of the region. In August 1990， after years of preparation， China and Indonesia restored diplomatic relations after a 23-year break. Two months later， China established formal diplomatic relations with Singapore. In September 1991， Brunei became the last member of ASEAN to establish official diplomatic relations with China.

In July 1996， China was granted full dialogue partner status at the 29th ASEAN Ministerial Meeting in Jakarta， which marked the beginning of mutual trust and partnership between the two sides on the basis of open dialogue. Bilateral relations were further consolidated by increasingly frequent exchange of high-level visits. As a block of developing countries and an important neighbor， ASEAN occupies an important position in Chinas diplomatic strategies and conversely highly values Chinas role in Asia-Pacific affairs.

In early 1992， Chinas reform and opening-up entered a phase of fast development following Deng Xiaopings inspection tour of a few southern cities， including Shenzhen， the most successful Special Economic Zone， where he delivered a milestone speech to promote further economic reform. Deng reiterated the importance of deepening economic reform for accelerated development and reviewed the experience and lessons of Chinas reform and opening-up since the adoption of the policy. He stressed that efforts should be made to avoid swerving during implementation of the Partys basic line of “one center and two basic points，” follow the path of socialism with Chinese characteristics and seize the moment to accelerate the pace of reform and opening-up with focus on economic construction.

In this famous “southern tour talk，” Deng suggested： “We should learn from Singapores experience and do what they did， but better.” When Lee Kuan Yew visited China in September 1992， he expressed intentions to establish a joint-venture industrial park with China inspired by Singapores model. After several rounds of subsequent discussions and field investigation jointly conducted by both sides， construction of an industrial park began in the eastern Chinese city of Suzhou. Today， Suzhou Industrial Park is regarded as a flagship cooperation project between governments of the two countries. In his book The Singapore Story： Memoirs of Lee Kuan Yew， the founding father of modern Singapore wrote： “I would score construction of the Suzhou Industrial Park 70 out of 100 because of its picturesque environment and overall style that is fairly reminiscent of Singapore.”

1998： Challenges and Change

As China forged ahead with reform and opening-up， relations between China and ASEAN countries improved.

On July 2， 1997， the Thai government devalued the baht， which ruined companies and individuals almost overnight and triggered a financial storm in Thailand that soon spread to Malaysia， Singapore， Japan， South Korea and other Asian countries.

China did all in its power to help solve the unprecedented financial crisis. It actively participated in an assistance effort by International Monetary Fund （IMF） by offering over UN$40 billion of financial aid to Thailand and other countries and providing import and export credits and free medicine assistance to Indonesia and other countries. In a bid to maintain regional stability and development， the Chinese government decided not to devalue the RMB and paid a high price for the move. All these measures contributed greatly to safeguarding financial and economic stability and growth in Asia and the rest of the world.

True friendship stands the test of time. After the financial crisis， ASEAN member states all recognized China as a responsible major country willing to take on heavy responsibility in maintaining regional peace and development. In the wake of the crisis， China-ASEAN relations were boosted to new levels of systematic cooperation.

At about the turn of the 21st Century， China was situated at a critical point during its accession to the World Trade Organization （WTO）. To further open up， Chinese Premier Zhu Rongji expressed Chinas readiness to enhance ties with the ASEAN free trade zone at the Third China-ASEAN Summit in Manila in 1999， which received an enthusiastic response from leaders of ASEAN countries. In November 2000， Premier Zhu first presented the idea of establishing a China-ASEAN Free Trade Area （CAFTA） at the Fourth China-ASEAN Summit in Singapore and proposed studying the feasibility of free trade relations between China and ASEAN.

In November 2002 at the Sixth China-ASEAN Summit， leaders from both sides signed the landmark Framework Agreement on China-ASEAN Comprehensive Economic Cooperation， launching the process of establishing CAFTA， which was scheduled for 2010 completion.

“CAFTA was the first-ever free trade area China established in foreign countries and is iconic to Chinas opening-up，” remarked Xu Ningning， executive president of the China-ASEAN Business Council， to China Report ASEAN. Construction of CAFTA unleashed major potential on both sides in economics and trade， so much so that China drastically increased imports from ASEAN as people of ASEAN countries began to benefit from development opportunities afforded by China， he added.

On January 1， 2010， CAFTA was formally established. With a population of 1.9 billion people， more than any other free trade area in the world， a GDP topping US$6 trillion and trade volume accounting for 13 percent of the world trade， the largest free trade area between developing countries has elevated the economic growth of China and ASEAN.

2015： ‘Road of Opportunity

“Since ancient times， southeast Asia has been an important hub along the ancient Maritime Silk Road，” noted Chinese President Xi Jinping in a speech at the Peoples Representative Council of Indonesia on October 3， 2013. “China will strengthen maritime cooperation with ASEAN countries to optimally utilize the China-ASEAN Maritime Cooperation Fund set up by the Chinese government and vigorously develop maritime partnerships as part of a joint effort to build the Maritime Silk Road of the 21st century.”

President Xi also illustrated that China was ready to open wider to ASEAN countries on the basis of equality and mutual benefits to enable ASEAN residents to benefit more from Chinas development. “China is prepared to upgrade the China-ASEAN Free Trade Area and strive to expand two-way trade to US$1 trillion by 2020 with commitment to greater connectivity with ASEAN countries，” he stressed.

This is the latest developmental vision China has announced in the new era. After decades of reform and opening-up， the Chinese economy is now closely linked to the world economy， but more profound potential has yet to be exploited. President Xi acutely and accurately grasped the trends of the times and presented the idea of building the Silk Road Economic Belt and the 21st Century Maritime Silk Road （Belt and Road Initiative）， which received an enthusiastic response and wide-ranging recognition from the international community.

The Belt and Road Initiative represents a major innovation of Chinas reform and opening-up among many other visions and programs launched by China over the past 40 years. ASEAN has played a big role in fostering such innovation. In economics， for example， alongside CAFAC， cooperation in cross-border trade has been robust. In terms of security， the Declaration on the Conduct of Parties in the South China Sea （DOC） has been signed and implemented by China and ASEAN countries. In diplomacy， China has joined the Treaty of Amity and Cooperation in Southeast Asia and made efforts to propel the development of East Asia Summit. All these developments have changed the world in positive ways.

At an interview with China Report ASEAN， Zhai Kun， professor at the School of International Studies and director of Center for Southeast Asian Studies of Peking University， opined that in-depth cooperation between China and ASEAN inspired various creations and innovations related to Chinas reform and opening-up， which have constantly driven improvement of global political and economic governance systems. “For instance， with the expansion of e-commerce， Chinas Alibaba Group established an Electronic World Trade Platform （eWTP） in Malaysia， and this brand-new business model has received great support from the Malaysian government，” illustrated Zhai. “The Belt and Road Initiative has injected new vitality into Chinas economic reform， which is poised to deliver greater benefits to China and ASEAN countries.”