Latest news with #JayantMenon
Business Times
29-05-2025
- Business
- Business Times
China's selective BRI comeback in Cambodia, Laos and Myanmar
[SINGAPORE] Beijing is selectively reviving big-ticket infrastructure projects in South-east Asia's most aid-dependent nations, restarting Cambodia's stalled China-backed canal while treading more cautiously in debt-laden Laos and conflict-ridden Myanmar. Dr Jayant Menon, visiting senior fellow at the Iseas-Yusof Ishak Institute, said: 'While there was a clear trend away from large-scale projects before the pandemic, these have made a return, driven by concerns over China's economic slowdown.' This shift underscores the increasingly fraught trajectory of China's Belt and Road Initiative (BRI) in South-east Asia's least-developed economies, as it continues to weigh strategic gains in Cambodia, Laos and Myanmar against rising debt, political risk and global scrutiny. This could also explain why the deeply ambitious BRI goals contrast with the slowing inflows into China's immediate mainland neighbours in the region – particularly Myanmar and Laos – in recent years. Mounting reputational and environmental concerns have played no small part in this shift. 'Concerns had been raised internationally, including environmental degradation and accusations of 'debt-trap diplomacy',' Dr Menon told The Business Times. For instance, Chinese hydropower projects in Laos and numerous dams in the Mekong River have sparked fears among Asean countries of ecosystem damage to the river and its surroundings in previous years. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up In response, Beijing appeared to recalibrate its strategy. 'Through its Global Development Initiative, China focused more on smaller-scale, social sector-oriented projects – particularly in health and education – which were seen as less risky from a reputational standpoint,' said Dr Menon. But with two of these three countries steeped in crisis, the future of China's economic role in the region's inner corners remains uncertain. 'It's difficult to read the tea leaves,' he added, describing the conflicting signals of China's emphasis on both large-scale strategic projects and its softer social development efforts. Such efforts include the China-Asean Digital Education Alliance launched in 2023 to foster regional cooperation in digital infrastructure for education. US President Donald Trump's tariffs may provide impetus that attracts more private Chinese investment into the region beyond state-backed infrastructure projects. 'There is a role for China's burgeoning private sector to be involved, but it all depends on how the trade war unfolds,' said Dr Menon. 'If it leads to decoupling, we might see duplicate supply chains – one for the US, one for the rest of the world.' Fragile states Since its launch in 2013, BRI has channelled at least US$679 billion in infrastructure financing globally – nearly 10 times the US total over the same period. About 31 per cent of that has gone to Asia. Countries such as Indonesia and Malaysia have absorbed the lion's share of China's regional lending, with Beijing providing US$18.4 billion and US$7.5 billion, respectively, from 2015 to 2022, based on research by the Lowy Institute. For the region's three less-developed countries, these investments over the same period display deep financial reliance. While most Asean member states receive between 1 and 3 per cent of their gross domestic product in Chinese development finance, the figure exceeds 8 per cent in Laos and Cambodia. That dependence is compounded by a lack of alternatives. 'South-east Asian states with acute development needs and constrained access to development financing – Cambodia, Laos and Myanmar – are the most reliant on China,' wrote Alexandre Dayant, deputy director of the Indo-Pacific Development Centre at the Lowy Institute in a report on the subject in April. 'The engagement of these states with other development options is minimal,' the report found. These countries are important to Beijing as some of its strongest economic and strategic allies – offering overland access to South-east Asia, regional clout and strategic connectivity. China has focused heavily on rail connectivity, including the Laos-China railway linking Kunming to Vientiane, which cuts travel time to the Chinese border by up to 11 hours. It was completed in 2021. Uneven returns Yet the heavy debt undertaken by the Lao government to finance the project, under a joint venture with China, has brought few economic benefits, said Dr Menon. Since BRI's inception, Laos has accumulated a heavy debt load from Chinese lending, largely in hydropower and electric grid projects. In 2020 Vientiane ceded control of its national power grid to a Chinese state firm in exchange for debt relief. The Lowy Institute estimated Laos' liabilities at some US$17 billion, or 112 per cent of its 2023 GDP, with at least US$5 billion owed to China. This clouds the future of China's continued investments in the country, said Lowy Institute researcher Riley Duke in a report on Tuesday (May 27). 'Beijing faces a dilemma – pushing too hard for repayment could damage bilateral ties and undermine its diplomatic goals,' he said. In Myanmar, China's dealings have largely been hosted through the China-Myanmar Economic Corridor, but civil conflict has put much of Beijing's projects on hold. The corridor boasts among various projects the Kyaukphyu Special Economic Zone (SEZ) and the deep sea port located within the coastal town, designed to offer Beijing strategic access to Myanmar's oil and gas pipelines away from a potential chokepoint in the strait of Malacca. Meanwhile, Cambodia's dealings with China have been more successful. During China President Xi Jinping's visit to Cambodia in April, contracts were signed to continue construction of the Funan Techo Canal, which would provide access to the gulf of Thailand from the Cambodian capital of Phnom Penh. With such access, goods from the capital city would no longer have to transit through Vietnamese ports such as Ho Chi Minh City through the Mekong River. The canal's construction was previously believed to have stalled over China's lack of financial commitment to the project. An expressway from Phnom Penh to Sihanoukville has been a major success, reducing travel time to the SEZ, Dr Menon noted. Once reputed as a hotspot for illegal Chinese casinos, an online gambling ban and a post-pandemic inflow of investments in the hospitality and manufacturing sectors are set to boost the coastal town's economy. Chinese automaker BYD, for instance, plans to launch its second assembly plant in South-east Asia in Sihanoukville this year. Trade over tensions As geopolitical rivalries intensify, Beijing is doubling down on economic diplomacy in South-east Asia. China's commerce ministry announced on May 21 that an upgraded 3.0 version of the Asean-China free trade area deal, first signed in 2002, would be signed by year-end, aiming to deepen cooperation in digital trade, green growth and supply chain links. Such integration could soften the blow on industries such as solar projects, after sweeping US tariffs rattled Asean exporters in April. 'This shift can strengthen China-South-east Asia ties in clean energy partnerships, potentially increasing emerging markets' access to more affordable clean energy technologies that can accelerate the region's low-carbon transition,' said OCBC environmental, social and governance analyst Ong Shu Yi, following the development. Laos, who escaped the levies, has continued to pursue its ambitions in the sector through deals with China and other Asean countries. This is made possible, Dr Menon noted, as the Asean region and China are far more willing to put aside geopolitical differences in pursuit of mutual economic benefit compared to the US. 'The US prefers to trade and invest with its allies only, but Asean countries continue to trade with China even when they have disputes over issues like the South China Sea,' he remarked.
Al Jazeera
13-05-2025
- Business
- Al Jazeera
Will the US-China tariff deal avert a possible global trade war?
The world's two biggest economies have stepped back from the brink. After imposing retaliatory tariff hikes at rates never seen before, the United States and China have agreed to a truce. US taxes on Chinese goods will now fall from 145 percent to 30 percent, and China will cut theirs on US items from 125 percent to 10 percent. Some of the levies have been scrapped altogether while others have been put on hold. After weeks of considerable strain, many people are looking to see how global supply chains will be affected. Is it the end of the global trade war, triggered last month by US President Donald Trump? And what does it mean for those countries who had been anticipating big investments due to the steep duties on China? Presenter: Elizabeth Puranam Guests: William Lee, chief economist, Milken Institute Huiyao Wang, founder, Center for China and Globalization Jayant Menon, former lead economist, Asian Development Bank
CNA
12-05-2025
- Business
- CNA
Jayant Menon on US-China trade talks
Stocks rose in China with the easing of tariff levels with the US. The Hang Seng closed 3 per cent up while mainland indices ended in the green. The yuan strengthened to a six-month high earlier against the greenback. CNA speaks to Jayant Menon, Visiting Senior Fellow of the Regional Economic Studies Programme at ISEAS – Yusof Ishak Institute.
South China Morning Post
10-05-2025
- Business
- South China Morning Post
From handshake to walkout, anything can happen at US-China trade talks
As China and the United States engage in formal talks for the first time since the resurgence of their trade war, analysts who have closely followed developments in the world's two biggest economies have made a wide range of predictions as to the outcome – with almost everything seeming to be on the table. Advertisement Ideal scenarios would mean a deal that moves the two sides toward cutting their present trade-prohibitive tariff rates, even if such a steep de-escalation does not come immediately after the dialogue in Geneva. Worst cases, the analysts agree, would involve one or both parties walking out with no consensus on what to do next, sending markets into another tailspin and doing further damage to trade, jobs and consumption. On the positive end of the forecasts, Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore, said China and the US could agree to a pause in import duties similar to the 90-day suspension US President Donald Trump's government offered the rest of the world in April. 'The best-case scenario is, I think, China gets what everyone else has gotten, which is a pause,' Menon said. 'You suspend … just like everyone else in the world, and create a reasonable timeline to negotiate these prohibitive tariffs.' Advertisement Since Trump's return to the White House in January, the US has raised cumulative tariffs on Chinese imports to at least 145 per cent, with a total rate of 245 per cent for some goods. China has responded with universal duties of 125 per cent for products made in the US.
South China Morning Post
10-05-2025
- Business
- South China Morning Post
From handshake to walkout, anything can happen at US-China trade talks
As China and the United States engage in formal talks for the first time since the resurgence of their trade war, analysts who have closely followed developments in the world's two biggest economies have made a wide range of predictions as to the outcome – with almost everything seeming to be on the table. Advertisement Ideal scenarios would mean a deal that moves the two sides toward cutting their present trade-prohibitive tariff rates, even if such a steep de-escalation does not come immediately after the dialogue in Geneva. Worst cases, the analysts agree, would involve one or both parties walking out with no consensus on what to do next, sending markets into another tailspin and doing further damage to trade, jobs and consumption. On the positive end of the forecasts, Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore, said China and the US could agree to a pause in import duties similar to the 90-day suspension US President Donald Trump's government offered the rest of the world in April. 'The best-case scenario is, I think, China gets what everyone else has gotten, which is a pause,' Menon said. 'You suspend … just like everyone else in the world, and create a reasonable timeline to negotiate these prohibitive tariffs.' Advertisement Since Trump's return to the White House in January, the US has raised cumulative tariffs on Chinese imports to at least 145 per cent, with a total rate of 245 per cent for some goods. China has responded with universal duties of 125 per cent for products made in the US.
