China and ASEAN to learn from each other

The COVID-19 pandemic has exposed the flaws and vulnerabilities of the existing economic order including supply chains, government funding and lifestyles. Both China and ASEAN economies have been relatively successful in handling the pandemic, however the model of post-COVID economy and social structure is still under heavy discussion. Thus, a webinar titled “Post-COVID Economy: Thoughts on what China and ASEAN can learn from each other” was jointly organised by China-ASEAN Business Association (CABA) and UTAR with the support of George Town Institute of Open and Advanced Studies (GIOAS), Wawasan Open University on 19 June 2020 via Zoom.

Speaking at the webinar was Bristol University Pro-Chancellor Tan Sri Andrew Sheng while moderating the webinar was CABA Deputy President Datuk Seri Mohamed Iqbal.

Prof Cheng welcoming participants to the CABA-UTAR webinar

Welcoming the participants to the CABA-UTAR webinar, UTAR Institute of Management and Leadership Development Director Prof Dr Cheng Ming Yu said, “On behalf of CABA-UTAR webinar working committee, I would like to extend a warm welcome to all the participants. This webinar aimed to promote a better understanding of the global economic situation and to foster closer economic and social culture cooperation between China and ASEAN especially during this time of the pandemic. We are indeed very honoured to have Pro-Chancellor of Bristol University Tan Sri Andrew Sheng and Deputy President of CABA Datuk Seri Mohamed Iqbal here with us today. The lecture will draw on some preliminary lessons and thoughts on China and ASEAN’s response and the difficulties faced by both parties.”

Tan Sri Dr Koh delivering his opening remarks

CABA Advisor Tan Sri Dr Koh Tsu Koon said in his opening remarks, “As the advisor of CABA, I would like to welcome all of you on behalf of CABA President Tan Sri Dato’ Seri Lim Gait Tong. CABA was founded in 2017. It has organised more than 10 events to promote trade tourism and business as well as social-cultural understanding between ASEAN and China. CABA would like to take this opportunity to thank UTAR for cooperating with us on the CABA-UTAR webinar series.”

“As many of you may be aware, during the first quarter of this year, ASEAN became China’s largest trading partner for the first time, surpassing both United Nations and the United States. This is highly significant. The COVID-19 era and post-COVID-19 era pose many challenges and issues of major concern. I believe Tan Sri Andrew would be the most suitable person to give an overview of these issues and enlighten us. We are glad and grateful to have him for this inaugural lecture,” he added.

Datuk Seri Mohamed Iqbal introducing the speaker

Datuk Seri Mohamed Iqbal introduced the speaker and said, “I am very happy to be given the honour to moderate this webinar series. The COVID-19 pandemic created a huge impact on the economy and society all over the world. It is unprecedented and it will be ongoing, never ending. Looking at Tan Sri Sheng’s professional skills and valuable experiences, he is indeed very qualified to give this inaugural lecture. Not to mention, the Time magazine named him as ‘100 most influential people in the world’.”

Tan Sri Sheng sharing his knowledge to the participants

Tan Sri Sheng started the inaugural lecture by sharing four key points to the audiences. He said, “Firstly, we are now going through the worst pandemic with 8.4 million people being infected around the world and with more than 450,000 deaths and it’s still spreading. Secondly, our global economy is now moving into the biggest depression since the 1930s, we are unlikely to have V shape recovery and all of us need to prepare for two to three years of slow and painful adjustment. Thirdly, East Asia had been the first to be hit by the COVID-19 virus and likely to be the first to recover, however, the lesson that we need to learn is that we need to have a different mindset and think about how we can recover and rebuilt the post-COVID economy and society. Fourthly, China and ASEAN had complemented each other very well since the relationship started. The China market is large and mature, while ASEAN is young and growing with 600 million populations with great cultural diversity. But for now, we need to overcome the challenges on how to commit to each other through the global supply chain and open peaceful trade using digital transition.”

Tan Sri Sheng explaining the unavoidable recession that would take place in 2020

Explaining how the gross domestic product (GDP) could fall by huge amounts in 2020, Tan Sri Sheng said, “We are going to go through a very different period for next 18 months until the vaccine is found. By 2020, the recession would be unavoidable. The recession is very likely to worsen, hence causing low growth. It will be slow to recover but there will be no inflation for the moment.”

Tan Sri Sheng showing the forecast from the World Bank Global

The IMF World Economic Outlook (WEO) projected the depression faced by all economies

Organisation for Economic Co-operation and Development (OECD) predicted that our world GDP will worsen if the second wave returns

The research by Mckinsey states that the earliest recovery of economies will take place in the second quarter of 2021 or third quarter of 2023

Most of the SMEs got affected during the lockdown

Tan Sri Sheng explained, “Based on the data from Organisation for European Economic Co-operation (OECE), the lockdown hurts service sector where SMEs dominate.” He elaborated, “Lockdown stops the movement of humans. The virus does not move but it is the human being that moves and carries the virus. World trade is about people’s movement, the world had stopped the plane, intercity activities, international business and so on. The businesses that hurt the most are the small businesses.”

Job loss became world’s biggest issue after the lockdown. The lockdown has affected 2.7 billion workers or 81% of the workforce

Purchasing Mangers’ Index (PMI) showing ASEAN supply chains that are hit by COVID-19

Tan Sri Sheng said ASEAN benefits in the global supply chain from import substitution and product relocation by US and China

Towards the end of the session, Tan Sri Sheng concluded that we live in a very strong area hurt by global threat and pandemic but China and ASEAN are in a good position to recover, reform and restructure. East Asia is still the region with the most modern infrastructure and well-trained labour force, open to trade and innovation with the highest savings. China, India and ASEAN depend more on domestic consumption to sustain growth and there is a huge opportunity for trade and investment especially in the digital economy. CABA is playing a critical role for Private-Public Partnership plus regional partnership to overcome the challenges and recession.

The webinar was followed by a Q&A session between the speakers and participants.

CABA, a non-profit and non-governmental organisation, is a business promotion group and cooperation mechanism, and coordinates the communications between chambers of commerce, industrial associations, trade institutions and enterprises within China and ASEAN, under the framework of China-ASEAN Free Trade Area to promote the trade and investment cooperation in this region.

The full video of the webinar is uploaded on the Facebook page “China-ASEAN Business Association”. Please click https://www.facebook.com/Official.CABA/videos/1370526986481175/ if you are interested to watch the full video. A total of 233 participants took part in the live webinar via Zoom and as of 24 June 2020, there have been 8,120k views on Facebook.