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Belt and Road

China promises to raise imports from ASEAN ahead of new rail link

Train line to Vientiane, third connection for the bloc, due to open Dec. 2

Chinese Vice President Wang Qishan said on Friday that Beijing will "treat ASEAN as a priority."   © AP

NANNING, China -- Chinese officials have vowed to increase imports from Southeast Asian countries ahead of the opening of a new rail link to the bloc.

Addressing the 18th China-ASEAN Business and Investment Summit in the southern Chinese city of Nanning, Vice President Wang Qishan said that both partners need to foster new development drivers to accelerate economic recovery.

"We will treat ASEAN as a priority in China's neighborhood diplomacy," Wang told the gathering of diplomats, businesspersons and officials who tuned in via video link.

"China will import more distinctive products from ASEAN, expand mutual investment, deepen the industrial supply chain and promote Lancang-Mekong cooperation," he said, referring to an economic corridor with Indochina.

Chinese trade with the 10 members of the Association of Southeast Asian Nations grew 38% to $410.7 billion in the first six month of 2021 from a year before, with exports to the bloc rising to $225.8 billion and imports reaching $184.9 billion.

Southeast Asian vendors at the China-ASEAN expo were keen to attract interest in their products. (Photo by CK Tan)

Lao Prime Minister Phankham Viphavanh said on Friday that the country will open its first rail link with China on Dec. 2

The 426 km Laotian section of the line, funded by Beijing through the Belt and Road Initiative, runs from the capital Vientiane north to Boten on the Chinese border where it will connect onward to the city of Kunming.

To the south, the line is to later extend across the Mekong from Vientiane to Thailand, reaching through to Bangkok. Work recently began on the first phase of construction in Thailand, with completion scheduled for late 2026.

China has two rail links with Vietnam. Construction on a line between Kunming and Mandalay, Myanmar has been slowed by growing unrest in the Southeast Asian country.

"I would like to request China and our ASEAN friends to work with us to revitalize the economy of the region," said Myanmar Minister of Commerce Pwint San at the Nanning summit. "I would like to reiterate that we all need to work together to liberalize the non-tariff barriers on goods that are essential to facilitate and boost our trade."

Meanwhile, shipments along a transport corridor involving both land and sea routes between China and Southeast Asia, known as the Chongqing Connectivity Initiative, rose 30% last year, according to Singapore Deputy Prime Minister Heng Swee Keat.

The calls to boost trade come as concerns rise that growth in China, the region's economic engine, might be losing momentum.

Backed by strong demand from key trading partners amid delta variant COVID outbreaks, Chinese exports in August beat market expectations, rising 25.6% from a year before, up from 19.3% growth in July. Imports rose 33.1%, up from 28.1% in July.

Li-Gang Liu, chief China economist for Citigroup, said in a client note on Wednesday that "the strong export growth is unlikely to be repeated in the remainder of the year."

With developed economic reopening, Liu expects consumers to shift spending back to services from goods purchases, and said the strong yuan would undermine Chinese competitiveness.

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