Accelerating the China-Asean Green Corridor: A pathway to sustainable prosperity?

AS GLOBAL leaders increasingly prioritise sustainable growth and economic resilience, South-East Asia is uniquely positioned to capitalise on strategic international partnerships to advance its development agenda.
Central to this vision is the ambitious China-Asean Green Corridor initiative, aimed at integrating economic prosperity with environmental sustainability. This transformative framework holds immense potential to reshape the region's economic trajectory and solidify Asean's position as a global leader in sustainability.
Billed as RM9.73 for the 1st month then RM13.90 thereafters.
RM12.33/month
RM8.63/month
Billed as RM103.60 for the 1st year then RM148 thereafters.
Free Trial
For new subscribers only

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

The Star

an hour ago

• The Star

Overcapacity: the economic buzzword fuelling Europe's clash with China

In a soulless conference room in Brussels in November, officials and experts from around Europe and the United States were locked in a technical debate over a cryptic bit of economic jargon: global non-market overcapacity. Beneath the geography-free legalese so common in Brussels, China was undoubtedly the subject. The conference, organised by the European Commission, was designed to thrash out solutions to the problem of overcapacity in China's economy and the second-order effects Europe fears. Decades of overinvestment and state subsidies in China, weak domestic consumption, an addiction to manufacturing, crashing corporate profits, zombie companies that the state does not let die and a superpower trade war have, the EU believes, created a perfect storm. China's industrial overflows must go somewhere, Brussels thinks, probably at a discount, and the only logical destination is Europe. Governments fear companies that make everything from industrial machinery and chemicals to hydrogen electrolysers and wind turbines will be eaten alive, industries decimated and jobs lost forever. They worry about a wave that could sweep populist parties to power in Europe's hollowed-out manufacturing heartlands. They insist that Beijing should worry too, or face a European anti-China backlash similar to the one that has coursed through the United States over the last decade. 'We are seeing a new 'China shock' – as China's economy slows down, Beijing floods global markets with subsidised overcapacity that its own market cannot absorb,' European Commission President Ursula von der Leyen said at the G7 meeting in Canada this week. Back at the Brussels forum on global non-market overcapacity last year, the discussion was becoming bogged down in terminology – 'decreasing profit margins', 'returns on capital', 'underutilised assets' – when an arm shot up in the middle of the room. 'I have to make some remarks, because China is the elephant in the room, and everything is about China on the agenda,' a Chinese diplomat said. Stirring the dozing room to life, the diplomat angrily disputed speakers' remarks that there was deflation in China – despite official government data showing a 31st successive monthly fall in producer prices in May – and flatly denied that China's industrial success was because of subsidies. The diplomat rejected the argument that overcapacity in China's giant industrial economy could be a problem for anyone, particularly in cleantech industries at a time of climate emergency. 'There is no country which produces as they consume ... otherwise, there will be no need for global trade ... the challenge we're facing in new energy sectors is not overcapacity, but undercapacity,' he said. Xi Jinping doesn't like overcapacity, hence it doesn't exist The word 'overcapacity' has become a battleground in China's rivalry with the West, and the episode in Brussels shows that the two sides have started airing their dirty laundry in public. After years of complaints, Europe has grown frustrated by Beijing's lack of response. Chinese officials brush off EU grievances, pointing out that Germany exports more cars than Germans can drive, while Belgians could not possibly eat all the chocolate made there. A running joke in Brussels is that the official Chinese term for the trend is 'so-called overcapacity'. 'Western politicians and press have repeatedly hyped up the so-called Chinese 'overcapacity',' wrote Peng Gang, minister for economic and trade affairs at China's mission to the EU, in an article for Euractiv, a Brussels media outlet. 'Some Western countries, in order to protect their vested market shares and dominant positions ... hype up the 'Chinese economic threat' or Chinese 'overcapacity' by all means.' In a highly polarised world, a seemingly innocuous economic term has become, in itself, a geopolitical tinderbox. Any mention of 'overcapacity' is enough to get eyes rolling in some quarters, and not just in Beijing. Prominent Western critics insist it is an ideological stick with which to beat China. 'We're seeing the emergence, from the standpoint of the West, at least, of a country that is from outside the West, from the South, an economic threat. I definitely think there's an ideological element behind these accusations of overcapacity,' said Jostein Hauge, an expert in development economics at Cambridge University, on a recent episode of the Sinica Podcast. Adam Tooze, a noted economic historian, told the South China Morning Post late last year it was 'significant that the debate has come up at this moment, because it provides a kind of justification for industrial policy in the West'. He asked: 'Why would you not simply take advantage of the subsidy that Chinese taxpayers effectively have provided to give us all really cheap vehicles?' Part of the problem could lie with the imprecise nature of the term 'overcapacity'. In Western discourse, the phrase has become a Frankenstein's monster, a catch-all criticism for many of the structural issues critics do not like in China. Trey McArver, co-founder of the Trivium China consultancy, said it 'has become a byword for either angst or anger regarding the Chinese economy'. 'It's applied in a lot of different instances, and it's not applicable in every context in which it's used. It is such a broad and abused term that it doesn't help further productive discussions from a policy perspective about what the EU wants to achieve,' he said. Those gripes include opaque subsidies, zombie companies kept alive by local governments, an unwillingness to turbo-boost consumption, a proliferation of industrial policies throughout the country and, latterly, a group of highly competitive companies, many of which struggle to turn a profit in China. 'The way China does industrial policy leads to overcapacity,' said Bert Hofman, adjunct professor at the East Asian Institute at the National University of Singapore. 'More importantly, it leads to inefficiencies – just look at profitability. Even BYD, the greatest success in electric vehicles, can barely make ends meet amid strong price competition. In the automotive industry, one-third of companies is making a loss,' said Hofman, who was previously World Bank country director in China. Even some overcapacity believers admit that the word does not quite capture the extent of the grievances they have with China's economic model. 'There's no formal definition for overcapacity and so that's what makes it such a fraught, complicated term to use,' said Agatha Kratz, a China specialist at Rhodium Group, a research house whose work on the topic has been cited widely by Western officials pushing for China to change, and for Europe to act. Kratz pushed back strongly against the idea that an endless supply of Chinese cleantech products would be good for the world, even during a climate emergency, since it would kill European industries. 'This is going to sound simplistic, but I really, truly believe this. You cannot buy a solar panel if you don't have a salary. You can't invest in the green transition if you don't have a taxable base,' she said. Jens Eskelund, chair of the EU Chamber of Commerce in China, has for years advocated moving away from the term since it strikes such a nerve in Beijing. Instead, he points to nearly three years of producer price deflation in China as an official metric that the government cannot really shoot down. '[Premier] Li Qiang calls it 'involution' [ neijuan ]. I'm fine with calling it involution,' said Eskelund. He was referring to a term most often associated with a Chinese societal trend described by the journal Economics & Human Biology as 'a state of intense, internal competition and overwork without significant progress or improvement'. 'But when you have China producing four times more electrolysers than the world can absorb, then it's overcapacity. When you have battery factories that only produce at 65 per cent capacity, then it's overcapacity. But you can call it something else if you want,' Eskelund said. Chinese leaders have used the term 'overcapacity' before, but in a different context understood by most to refer to real estate-related sectors. During the Central Economic Work Conference in December 2023, President Xi Jinping said that 'some difficulties and challenges must be tackled to achieve further economic recovery. Those include a lack of effective demand, overcapacity in some industries, weak social expectations and many hidden risks'. The same meeting in 2024 pledged to 'comprehensively address 'involution-style' competition and regulate the behaviour of local governments and corporations'. The chairman of auto giant Geely, Li Shufu, said last week that 'the global automotive industry is mired in severe overcapacity woes, [so] we have decided to stop building new car plants'. Yao Yang, dean of the National School of Development at Peking University, in a recent interview with the Post said: 'From a domestic perspective, overcapacity in China is a reality. We have to acknowledge that. It's a factual, scientific issue, which is precisely why we're talking about countering involution – it happens because of overcapacity,' But he added that it was a result of an excess of capital instead of government policies and, in the case of EVs, the private sector played the dominant role. So why the strong pushback from Chinese officials? Eskelund at the EU chamber believes it is because 'China doesn't like finger-pointing', but he senses some level of acceptance in Beijing. 'China is beginning to realise it's out of balance and comes at a cost to China. Like changing any habit, it starts with recognising there's an issue,' he said. Some EU officials complain about 'semantics'. They believe Beijing is trying to distract from what they consider to be serious problems by poking holes in the terminology. 'Even if we used another term, the response would be the same,' said one official. Joerg Wuttke, a partner at DGA-Albright Stonebridge Group and formerly Europe's top lobbyist in China, described the debate as an 'echo chamber' that took its lead from the top. 'It reflects the messaging in the system. Xi Jinping doesn't like overcapacity, hence it doesn't exist,' said Wuttke, who said senior Chinese government figures had told him a decade ago there would be across-the-board overcapacity in hi-tech industries. 'There are similarities in DC and Beijing about delusional language. When you meet someone in DC now, they say 'we had the best 100 days ever'. The same in China: we have an echo chamber there that actually comes out with Xi's messages and people who should know better will parrot this, despite the fact it's not the truth.' In the West, some official documents have started referring to 'non-market policies and practices', with overcapacity a subcomponent of that, perhaps recognising the fraught nature of the term, but also the challenge in defining unprecedented developments in China's economy. Others are looking for more innovative language. The economist Arthur Kroeber uses the term a 'venture capital state' to describe Beijing's hydra of policies designed to boost labour productivity, upgrade its technology base and boost self-sufficiency. Like a venture capital fund, the state identifies high-return sectors and pumps them full of money, producing a few winners and many failures. The difference is that in China, the failures are not allowed to die, according to Kroeber. In a contribution to a book published last month, Not Just Another Cold War: The Global Implications of the US-China Rivalry , Kroeber said 1.8 per cent of China's GDP was pumped into funds supporting these sectors – which were all geared towards manufacturing hi-tech goods, 'a feature, not a bug of Chinese policy under Xi' – from 2017 to 2019, 'three to four times higher than comparable spending in other countries'. The funds, 'superficially modelled on venture capital funds, are basically dressed-up subsidy channels', Kroeber wrote, adding that the 'market exit and reallocation of resources is essentially zero'. On June 17, the Anji Soundness car-carrying ship set sail on its maiden voyage from Taicang Port in Suzhou, bound for Europe. With capacity for 9,500 vehicles that could fill 20 football fields, the world's largest methanol-ready cargo ship is the stuff of EU policymakers' nightmares – a floating emblem of overcapacity and of Beijing's unwillingness to change gear. For others, it is a more benign symbol. 'The Chinese model involves ferocious competition – and that doesn't sit well with the classic Brussels mindset, that this is all down to market-distorting subsidies,' said Simon Evenett, the founder of Global Trade Alert, a policy tracker. 'What the Chinese have done is take subsidies and combine [them] with ferocious competition. And in Europe, I'm not sure we're ready for such levels of ferocious competition.' -- SOUTH CHINA MORNING POST

The Star

3 hours ago

• The Star

No tensions with New Zealand, says Xi

High-table diplomacy: Luxon (second from right) meeting Xi (not pictured) at the Great Hall of the People in Beijing. — AFP The leaders of China and New Zealand discussed the role of trade in boosting ties, while New Zealand also pressed its interests for peace and security in the Pacific, government statements showed. President Xi Jinping and Prime Minister Christopher Luxon met in the capital's Great Hall of the People yesterday as China's influence grows in the Pacific, challenging the traditionally stronger security foothold many Western nations have had there. On his first visit to China since taking office in November 2023, Luxon discussed the need for stability, less tension in the Indo-Pacific and New Zealand's 'enduring support for Pacific-led priorities', his government said in a statement. Luxon's meeting with the leader of New Zealand's biggest trade partner was 'constructive', he said in a post on X. 'We discussed the depth of the New Zealand-China relationship – from trade and people-to-people ties to our shared global responsibilities,' he said. 'In a complex world, open dialogue is more important than ever.' Luxon also backed up the role of the Pacific Islands Forum, an inter-government body seeking to foster cooperation among Oceanic countries and territories. Without making specific reference to any issue, Xi called for both countries to seek common ground and view differences 'accurately', state news agency Xinhua said. 'There are no historical grudges or conflicts of interest between China and New Zealand, so we should respect each other, seek common ground,' Xi told Luxon, it said, adding that both must precisely tackle disagreements. During his four-day visit to the commercial hub of Shanghai and the capital, Beijing, Luxon has championed an agenda of boosting business, travel and education for New Zealand. Xi also talked about deepening trade and investment ties, as well as scope to work on science and technology, climate change response and infrastructure along with education exchanges – echoing most of Luxon's goals. Luxon documented his meetings on Instagram, posting video messages to fellow citizens reinforcing his mission of getting 'money into your back pocket'. He clinched travel-related pacts and pushed New Zealand's tertiary education as well as its exports of meat, a key item of trade with China after dairy. Chinese tourists are New Zealand's third-largest group of international visitors, though official data show their numbers are still nearly a fifth lower than in 2019 before the Covid-19 pandemic. China Eastern Airlines will launch more flights with New Zealand from December, New Zealand said on Wednesday. Days before the visit, New Zealand unveiled a 12-month trial of visa waivers from November for Chinese passport holders arriving from Australia with valid visas from its neighbour. — Reuters

Free Malaysia Today

4 hours ago

• Free Malaysia Today

Ringgit rebounds amid improved risk appetite

KUALA LUMPUR : The ringgit rebounded from yesterday's losses to end higher against the US dollar today, as the latest developments on the Iran-Israel war sparked some buying interest in emerging currencies, a dealer said. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said that the Israel-Iran war continued to take centre stage as the US was still weighing its option to participate in the conflict. White House spokeswoman Karoline Leavitt indicated that president Donald Trump will make his decision within the next two weeks. 'The US Dollar Index (DXY) fell 0.22% to 98.691 points,' he told Bernama. At 6pm, the local currency strengthened to 4.2505/4.2565 versus the greenback from yesterday's close of 4.2590/4.2625. However, the ringgit traded mostly lower against a basket of major currencies at the close. It slipped versus the British pound to 5.7356/5.7437 from 5.7164/5.7211 at yesterday's close and declined vis-à-vis the euro to 4.9000/4.9069 from 4.8868/4.8908 yesterday, but appreciated against the Japanese yen to 2.9245/2.9289 from 2.9286/2.9312 previously. The ringgit performed mixed against its Asean peers. The local currency advanced versus the Indonesian rupiah to 259.2/259.7 from 259.5/259.9 yesterday and rose vis-à-vis the Thai baht to 12.9727/12.9969 from 12.9966/13.0513 previously. However, it weakened against the Singapore dollar to 3.3088/3.3140 from 3.3072/3.3102 yesterday and slid versus the Philippine peso to 7.43/7.45 from 7.41/7.42 at the previous close.