Sunday, December 31, 2023

Do Southeast Asian countries have the possibility to become the biggest economies by 2060? Could they compete with other big economies like China and India? Can Southeast Asia become an economic powerhouse region?

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BEIJING: Well the question is framed in a strange manner. China and India are the two world’s largest populations with each having more than a billion people. Not other countries are close in having their size of populations.

China and India will remain very large economies simply for having so many people residing there. Nevertheless, I see Southeast Asia as having huge business potential for many years to come on account of its geography and the sovereign governments are becoming more stable.

The City-State Singapore has emerged as the financial and banking hub for the region. The city-state is recognized for having a government that shuns corruption and they can act as a role model for its neighbors. Singapore is also acting as a mediator amid diplomatic spats between other member states in ASEAN (Association of Southeast Asian Nations).

Vietnam is also enjoying much improved economic conditions. It’s a southern neighbor to China. Many Chinese manufacturers in search of lower labor and land costs are reopening their factories in Vietnam, as well as in Laos, Cambodia and Thailand as they are in close proximity to China.

Beijing has introduced the Belt & Road Initiative (BRI), by encouraging participating nations to agree on joint projects to build major infrastructure, such as roads, bridges, railroads and so much more while offering a finance mechanism the Asian Infrastructure Investment Bank (AIIB) to provide loans and to secure cross-border investments.

Countries in Southeast Asia have been major beneficiaries of the BRI, such as Laos as Chinese companies invested heavily into constructing new hydro-power dams, railroads, roads and bridges. Setting up new power plants are essential for developing nations to embark on nationwide urbanization, modernization and industrialization drives.

Southeast Asian nations have long struggled with poor infrastructure, rampant corruption and social instability. Meanwhile, China has witnessed good social stability, rapid development of its infrastructure and fair economic conditions.

Southeast Asian nations have very large Chinese communities residing there, but when visiting Singapore and Malaysia you will find huge Indian communities as well. Accordingly, the influx of Chinese and Indian communities have ensured much more vibrant and diverse communities in Southeast Asia.

We should anticipate that more Chinese and Indians will either migrate to Southeastern Asian nations or they will conduct more business dealing in the region, while people from Southeast Asia could migrate or do business in China and India in response.

The closer interconnectivity between ASEAN with China and India could be a game changer in future international economic trends. We can read more about it from the China Daily. The link is here:

http://epaper.chinadaily.com.cn/a/202101/07/WS5ff64932a31099a234353110.html

As reported by the China Daily:

“China is taking concrete steps to further bolster reform and expand opening-up, continue to promote the Belt and Road Initiative and tap the potential of its domestic consumer market. It is gradually fostering the "dual circulation "development pattern, which takes domestic circulation as the mainstay, with domestic and international circulations reinforcing each other. By fostering the new development paradigm, China will make the best of both domestic and global resources instead of relying solely on the economic drivers within its borders. Sustained and robust growth in China will provide great development opportunities for other Asian nations, and their resources and markets will further increase China's growth momentum.”

Southeast Asian countries will enjoy greater prosperity up to the year 2060, but they are smaller in size to China and India so it’s impossible for them to match China and India in total GDP (gross domestic product) size.

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