HANOI/YANGON — Asian garment manufacturers are signaling concern about disproportionate benefits for Vietnam over regional rivals in the textile sector as a result of major trade deals including the new, U.S.-led Trans-Pacific Partnership and a free trade agreement with the European Union. Vietnam is already the world’s fourth biggest garment exporter, but will gain new preferential access to markets among the 11 other countries that have signed up to the TPP as well as the 28 EU member countries under the EU-Vietnam FTA. These are lucrative markets for Asia’s garment exporters and apparel makers of leading Western brands. “Vietnam’s trade deals will be a concern — not just for us, but the whole region,” said Khine Khine Nwe, secretary general of the Myanmar Garment Manufacturers Association, told the Nikkei Asian Review.
HO CHI MINH CITY/SINGAPORE — The 10 member countries of the Association of Southeast Asian Nations collectively do more business with China than with any other country, with bilateral trade between the two sides growing by an annual 8.3% in 2014 to $480 billion, according to Chinese government figures. But since mid-2015, slowing Chinese growth and a weaker yuan have fueled fears in Southeast Asia that the region has become too dependent on China’s vast markets. China has allowed the yuan to fall by 5% against the dollar, signaling that it may opt for a devaluation to make its exports more competitive. Manu Bhaskaran, chief executive of Centennial Asia Advisors, an economic advisory company, believes that a further weakening of the yuan could trigger competitive devaluations across Asia. “What is the knock-on effect on other currencies? Probably down,” Bhaskaran told the Nikkei Asian Review.
SINGAPORE — While China’s economy continues to grow much faster than those of Japan and most Western countries, according to official figures, the country’s mix of slowing imports, wobbly stock markets and a weakening currency is a growing concern for Southeast Asian countries that have grown increasingly dependent on trade with Asia’s largest economy. China’s official 7% annual rate of growth in gross domestic product in 2015 is the lowest in a quarter century, down from the 7.4% posted in 2014. It leaves Southeast Asian countries vulnerable to slowing Chinese growth, six years after Beijing signed a landmark trade agreement with the 10-country Association of Southeast Asian Nations. As China’s economy expanded to become the world’s second biggest, trade between Southeast Asia and China grew, as the latter sought raw materials for massive infrastructure and city building. However, since riding out the 2008 financial crisis that brought several Western economies close to ruin, China has slowly tried to shift the basis of economic growth from investment to domestic consumption. As a result, China’s demand for commodities has declined. Jia Qingguo, Dean of International Studies at Peking University, said that “the Chinese economy and the Southeast Asian economies are integrated, and the slowdown in the Chinese economy will affect Southeast Asia in a negative way.”
KUALA LUMPUR — Laos, as the incoming chair of the 2016 Association of Southeast Asian Nations, has urged member states to agree on a region-wide regime for Special Economic Zones, which have proliferated in recent years. “We think that a framework for Special Economic Zones would be good to set up because we see that in each ASEAN member state, we develop different economic zones,” Laos Minister of Industry and Commerce Khemmani Pholsena told a business forum in Kuala Lumpur during the recent ASEAN summit. Whether Laos can persuade other governments in the region to sign up for a level SEZ playing field is questionable — despite the signing of the ASEAN community in Kuala Lumpur on Nov. 22, just hours before Malaysian Prime Minister Najib Razak ceded the chairmanship of ASEAN to Laos Prime Minister Thongsing Thammavong. “SEZs in Malaysia and the industrial estates in the eastern seaboard of Thailand are much more advanced than SEZs in CLMV [an abbreviation for Cambodia, Laos, Myanmar and Vietnam]. Therefore, to create a common set of rules might be difficult,” said Vanthana Nolintha.
KUALA LUMPUR — Pushing global terrorism into the background, the simmering South China Sea territorial dispute dominated discussions Sunday at the East Asia Summit that brought together world powers — including China, Japan and the U.S. — and the Association of Southeast Asian Nations. The 10th annual summit had been expected to focus on the threat of international terrorism following remarks made by President Barack Obama on Friday. However, many of the U.S. president’s counterparts turned out to be more concerned about the dispute with China. “The South China Sea was the central issue,” Japanese Prime Minister Shinzo Abe told reporters afterward.
KUALA LUMPUR — Earlier this week Southeast Asia’s foreign ministers “reaffirmed the importance of maintaining peace, stability, freedom of navigation in and overflight of the South China Sea,” according to an account given Friday by Malaysian Foreign Minister Anifah Aman. In comments possibly aimed at China, Anifah added that “the ministers remain seriously concerned over the ongoing developments and urged all parties to exercise self restraint.” He added that clearer rules over rights and responsibilities in the South China Sea are needed, including a long discussed but yet to be finalized code of conduct.
JAKARTA – During the first six months of 2015, pirates launched an attack once every two weeks on average in Southeast Asian waters, according to the International Chamber of Commerce’s International Maritime Bureau. “We have been busy, getting many calls, emails, even faxes,” Noel Choong, head of the IMB’s Piracy Reporting Center in Kuala Lumpur, told the Nikkei Asian Review. The center was set up in 1992 as “a 24-hour and free service for shipmasters to report any piracy, armed robbery or stowaway incidents,” according to the IMB website. The increase in the number of incidents marks a return to the period between the early 1990s and 2006 when Southeast Asia was the most “pirate infested” region in the world, according to the IMB. It was subsequently overtaken by an upsurge in deadly attacks and hijackings in the waters off Somalia and East Africa, where ship crews were sometimes held captive for years.
YANGON – While no Asian country is likely to match South Korea’s run to the semi-finals on home soil in 2002, Japan and South Korea have a good chance at repeating their 2010 achievements by qualifying for the knockout rounds in the 2014 World Cup. For Iran and Australia, Asia’s other contenders, escaping the initial pool stages looks less likely, with the Australians drawn in an inescapable-looking cliff-face group.
YANGON – Ahead of the proposed establishment of the ASEAN Economic Community (AEC) at the end of 2015, many of Myanmar’s businesses are trembling.
“There is a perception among people in Myanmar that local products are low quality,” said Nwe Ni Wai, Executive Director of Yangon-based United Paint Group. She worried aloud that companies in Myanmar might struggle to compete with rivals from more advanced markets in the region, and in turn might struggle to make the most of opportunities in other markets.
Bagan, Myanmar – It was the first big meeting of Myanmar’s first year as the chair of the Association of Southeast Asian Nations (ASEAN) – a conclave of the region’s foreign ministers held last week in the temple-strewn surroundings of Bagan, on the banks of the Irrawaddy River in north-central Myanmar. “We will be discussing with our fellow ASEAN countries how to achieve the ASEAN community by 2015,” Myanmar Foreign Minister U Wunna Maung Lwin said before the meeting, referring to one of the big challenges facing Myanmar in its role as chair of the association. The minister was speaking poolside at the lavish Aureum Palace Hotel, where a bridal suite-villa in the middle of Bagan’s temples goes for US$1,000 a night. The location was clearly chosen to impress. Bagan, a tourist draw where some 10,000 temples stood at the height of a 13th century Burmese kingdom, is certainly eye-catching at dusk when the red and brown pagodas merge, in the dust and haze, with the glowing sunset behind the Irrawaddy.