Economists said that member states of the Association of South-East Asian Nations (ASEAN) are set to benefit from China’s economic recovery even amid uncertainties regarding the coronavirus pandemic. China is a vital economic partner of ASEAN countries, especially when other major economies falter due to the health crisis. The world-second largest economy will likely become ASEAN’s sole large source of demand that is still growing.
Malaysia’s Ministry of Commerce said that China had been ASEAN’s largest trading partner for a decade. Meanwhile, ASEAN took over the European Union as China’s largest trading partner in this year’s first quarter, contributing to 5.1% of the country’s international trade volume during the quarter.
China is expected to be able to stabilize its economy in the second quarter, thanks to restriction relaxation and the stimulus programs to support the domestic market. Economic data so far has suggested an accelerated recovery in the Chinese consumer market. This can be seen in the 36.3% year-on-year increase in online sales during the five-day May Day holiday.
The recovery in China can increase demand for ASEAN commodities and manufactured goods while boosting commodity prices, manufacturing activity, and business confidence in the region. In addition, China can increase investment in ASEAN countries through the Belt and Road Initiative and private channels.
However, the ASEAN tourism industry, which saw a surge of visits by Chinese tourists before the pandemic, is unlikely to recover soon. The lifting of travel restrictions as well as the reopening of international flights and borders remain uncertain due to the pandemic.
