Wanchai, Hong Kong: With the 2015 Asean Economic Community (AEC) integration nearing, business leaders from Asia said that the integration would make AEC the next major trading bloc in the world, improving not only trade but also investments between Southeast Asia and China.
According to Hong Trade Development Council (HKTDC) Executive Director Fred Lam and Kerry Logistics Network Chairman George Yeo, trade projections between the Association of Southeast Asian Nations (Asean) and China can reach $1.2 trillion by 2020, compared to the $400-billion trade volume between the bloc and China in 2012.
“To achieve this $1-trillion target, a million things should be done—trade agreements, harmonization, connectivity, protection, obstacles, among others, that we should overcome,” Lam said.
Barbara Meynert, director of Fung Global Institute, said from a panel of the recently held Asian Logistics and Maritime Conference (ALMC) in Hong Kong that rapid growth in the region decided the establishment of the AEC, and that the integration would open business opportunities to investors from China, which could result to investments reaching about $150 billion in the next eight years entering the region.
“With trade comes investment. It is expected that investment between two entities—China and AEC—would increase by $150 billion in the next eight years which means tremendous opportunities for business,” Meynert said.
Global leaders who attended the ALMC all agreed that the potential of the AEC in contributing to the world’s gross domestic product (GDP) is huge.
“Intra-Asian trade has been the driving force of global trade,” said Patrick Low, former chief economist of World Trade Organization who is now vice president of research for Fung Global Institute.
Ronald Widdows, chairman of the World Shipping Council, said that the increasing income, and development of infrastructure in the Asean would lead to establishment of “sophisticated supply chains,” mainly with cooperation with China, being the global manufacturing leader.
“As the area [Asean] grows, the opportunity to build more sophisticated supply chains, and the investment associated with this is massive,” Widdows said. On the other hand, Chulalongkorn University Director Chackrit Duangphastra said that the logistics roadmap set out will “complement the integration of single market” by 2015.
According to Duangphastra, the roadmap looked at how to improve transportation concerns as well as nontransportation, which include transport agencies, customs clearances and packaging.
The Chulalongkorn University director further said that the roadmap promotes e-commerce to promote ease of access of markets not only in Asean and China, but also with the 200 other markets around the world.
Earlier this year, the Philippine Retail Association (PRA) said that the Philippines still lagged behind its Asean neighbors when it comes to e-commerce and online trading.
Scott Price, Walmart Asia president and chief executive, told the panel at the ALMC that e-commerce is the new dimension of retailing and trading, and that there is a need to expand in this aspect because of its large potential to contribute to the global economic performance.
The Walmart head, who is also chairman of the National Center of the Asia-Pacific Economic Cooperation, further said that countries unable to adopt e-commerce will be left behind in this modern age, as competitiveness today is based more on advanced technologies and opportunities in the Internet.
“If you’re not online [through e-commerce], you’re not in retail,” said Paul Teague, former president of the Net-A-Porter Group in Asia Pacific.
The ALMC is an annual conference, series of forums, and panel discussions for trade, maritime and logistics future in Asia.