China and ASEAN must speed up for Vision 2020

China and the members of the Association of Southeast Asian Nations have accelerated their intergovernmental cooperation on the digital economy this year. It took place in two waves.

In the first wave in late July and early August, State Councilor and Foreign Minister Wang Yi attended the foreign ministers' meetings on East Asia cooperation in Bangkok, where he called for greater cooperation on the digital economy, 5G and smart cities. Together with his ASEAN counterparts, he announced that 2020 will be the China-ASEAN Year of Digital Economy. In addition, the foreign ministers reached an agreement on the synergies between the Belt and Road Initiative and the Master Plan on ASEAN Connectivity 2025.

The just-concluded leaders' meetings on East Asian cooperation witnessed the second wave. Speaking at the 22nd China-ASEAN Summit on Nov 3, Premier Li Keqiang proposed innovative cooperation in a variety of fields including the digital economy, artificial intelligence, big data and network security.

The ASEAN-China Leaders' Statement on Smart City Cooperation Initiative reiterated China's support for the ASEAN Smart Cities Network, which includes eight Chinese cities - Nanning, Xiamen, Hangzhou, Jinan, Kunming, Shenzhen, Nanjing and Chengdu - and 26 ASEAN cities, among them 10 capitals and major cities such as Bangkok, Chonburi, Phuket, Hanoi, Ho Chi Minh City and Da Nang. The two sides also stated their shared commitment to the sustainability of smart cities, cross-cultural exchanges and the building of a knowledge-sharing mechanism in a bid to ensure technological progress benefits more people.

The digital economy has become a priority in Chinese-ASEAN intergovernmental cooperation. At the same time, it is also listed on the top agenda with regards to market development, rules making and human resource training. The market potential for digital economic cooperation is huge. ASEAN countries are particularly suitable given their 438 million working-age population, per capita GDP growth, internet users, online retailing and third-party payment. In some ASEAN member states, online retailing accounts for less than 1 percent of total retail sales of consumer goods; in China the figure is 4.39 percent.

In recent years, a large number of Chinese IT companies, besides Huawei which started earlier, have chosen Southeast Asia as the first stop for overseas operations. They have invested in e-commerce, mobile payments, online travel booking, among others, through direct investment and merger, technology export and strategic cooperation.

In 2013, Tencent co-founded MNC Tencent with MNC Media, Indonesia's largest media group. In 2017, JD.com invested in Traveloka, Indonesia's online ticket booking platform and Alibaba participated in the founding of Tokopedia, Indonesia's C2C e-commerce platform.

In August 2018, Malaysian Prime Minister Mahathir Mohamad visited the headquarters of Alibaba and spoke highly of the Electronic World Trade Platform proposed by Alibaba founder Jack Ma, now a special consultant for many Southeast Asian leaders.

As progress is made in the market, China and ASEAN are paying greater attention to rule-making. China has signed memorandums of understandings on e-commerce cooperation with Vietnam and Cambodia, started negotiations on cross-border e-commerce cooperation with Malaysia and established a ministerial-level dialogue mechanism with Thailand.

The 22nd China-ASEAN Summit in early November also stressed policymaking and the drawing up of standards for smart cities through multi-sector information exchange at different levels. In particular, China and Thailand released a joint statement advocating a bilateral cooperation mechanism for the digital economy and building a "digital Silk Road", covering top-level design, infrastructure input and talent training.

Enterprises too are playing an important role in the rule-making process as traditional rules fail to meet their needs for free, cross-border e-commerce.

In 2016, Jack Ma proposed the Electronic World Trade Platform concept. To be launched by the private sector, it would involve all shareholders and be aimed at establishing new global trade rules in the information era to help developing countries, SMEs and the younger generation gain access to the global market.

In March 2017, the first such overseas "pilot zone" was set up in Malaysia becoming fully operational in November that year.

Faced with incompatibility issues in Southeast Asia, the Chinese enterprises have now begun training locals, especially young entrepreneurs. To train information and communication technology talents in Southeast Asia, Huawei proposed and launched the "seeds of the future" talent training programs while cooperating with governments and universities.

In Malaysia, Alibaba Business School has trained about 15,000 digital talents and started an "internet entrepreneur program" in Southeast Asian universities in collaboration with the United Nations Conference on Trade and Development.

Apart from cultivating talent for business, Chinese and ASEAN universities must speed up building knowledge systems for the digital economy and related governance.

Peking University held the fourth China-ASEAN Youth Summit in 2019 to explore how universities and college students play a role and create opportunities for digital economic cooperation. Student delegations suggested that China and ASEAN develop multilingual courses in e-commerce and international trade, encouraging more ASEAN youth to master the Chinese language and related terms in trade and digital economy.

In conclusion, the four forces - intergovernmental cooperation, market development, rule-making and talent cultivation - are expected to empower the digital economy and sustainable development in China and ASEAN countries, and ready both sides for the coming China-ASEAN Year of Digital Economy in 2020.

Zhai Kun is head of the Belt and Road Initiative Big Data and Innovation Lab, co-founded by School of International Studies at Peking University and Tencent. Yang Xueying is a student at Guanghua School of Management at Peking University.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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