Sun, May 01, 2011 - Page 5 News List

China to enhance SE Asia links: Wen

MUTUALLY BENEFICIAL:ASEAN has an ambitious plan to link new and existing rail, road and sea routes with China, creating a free trade area of 1.9 billion people

Reuters, JAKARTA

China will speed up the development of transport connections with Southeast Asia, building roads, telecommunication and power links as it seeks to boost trade, Chinese Premier Wen Jiabao (溫家寶) said yesterday.

Wen, speaking in Jakarta during a two-day visit to Indonesia, said China would give financial support through credit aid and investment, to provide for the better exchange of commodities, capital and people.

“In the next 10 years we will speed up the inauguration of land transport routes between China and ASEAN,” Wen said in a speech in Jakarta, adding that China will also provide funds for air and sea transport. “Today we witness the rise of Asia.”

He said China would unconditionally help underdeveloped countries in ASEAN, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

ASEAN has sought to highlight the potential for greater connections between its frontier markets and Asia’s biggest economic power, with the group’s foreign ministers heading on an unconventional road trip in January from Thailand to China.

Indonesia is seeking US$100 billion of private investment to develop its own dilapidated infrastructure, seen as a hurdle to attracting foreign firms and to gaining a sovereign investment grade rating that would cut government borrowing costs and put it on a par with BRIC nations such as China and Brazil.

Wen’s schedule in Jakarta looked ambitious for a capital hit by tropical downpours yesterday that flooded roads and jammed traffic. Bad roads in the archipelago cause delays adding to costs and exacerbating inflation, while air and boat accidents are all too common.

Wen promised Indonesia US$9 billion worth of loans for infrastructure on Friday, after meeting Indonesian President Susilo Bambang Yudhoyono.

ASEAN’s plan to link new and existing rail, road and sea routes together with China and allow better travel within a free trade area of 1.9 billion people is ambitious.

However, analysts say there is huge trade potential between ASEAN and China and better links could encourage Japan and South Korea to forge a closer relationship with ASEAN. Japan has already pledged more than US$50 billion in infrastructure investment.

China, ASEAN’s biggest trading partner, is seeking to double trade with Indonesia and get access to resources from a country that is a leading exporter of natural gas, palm oil and coal.

However, many Indonesian businesses are worried about a flood of cheap Chinese goods and a widening trade deficit with the Asian powerhouse. Yudhoyono asked for trade between the two countries to be balanced.

“China’s development will not disturb any countries and will not be a threat to other countries,” Wen said, according to a translation of his speech, adding that Beijing’s foreign policy was free, independent and peaceful.

Southeast Asian countries have clashed with China over rival claims to potentially oil and gas-rich islands in the South China Sea which is considered by China to be its backyard, while many see the US as a buffer against a dominant China.

Earlier in his two-day visit, which followed a trip to Malaysia, Wen sought to build trust and cultural links between the two countries which historically have been suspicious of each other, telling students at a Muslim university he had read the Koran.

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