China is the “real game” in terms of business for Southeast Asia, according to Karim Raslan, founder of KRA Group.
“It’s quite clear that China matters so much more than the U.S.,” said Raslan, responding to the question about the impact of the possible win of Democratic presidential candidate Joe Biden on Southeast Asia.
“Actually, to be frank, I don’t think Southeast Asians really care,” he said during his interview on CNBC’s “Squawk Box Asia” on Wednesday. “Southeast Asians have already experienced an enormous boom in bilateral trade with China.”
“The U.S. is a sideshow. It’s important for geopolitics, but the real game in terms of business — and these are mercantilist nations — is China," he added, justifying why China is the "real game."
Raslan explained that Southeast Asia is China’s largest trading group, after exceeding both the U.S. and the European Union in 2020.
“I think what we’ve got to bear in mind is that the perception of U.S. power, U.S. influence, has diminished enormously,” he noted.
According to Raslan, the constant inclusion of Indonesia in its Generalized System of Preferences, which removes duties on products from developing countries, is America's contribution to the region.
He pointed out that there is “some capacity,” but that U.S. investments could not be compared to China's.
“These numbers are dwarfed by the Chinese investment in nickel smelting in eastern Indonesia,” Raslan said. “As I say, billions and billions of U.S. dollars have been pumped over there.”
China as a competitor
Anthony Arend of Georgetown University said that he agrees with Biden when the candidate said that China is a competitor to the US, not an adversary.
“I think Biden has it correct, it is much more of a competition rather than an adversarial relationship,” Arend said during an interview with CNBC’s “Street Signs Asia.”
He pointed out that the US has to consider that, whether they like it or not, China is a “great power.” However, he mentioned that China has human rights issues and is making “ridiculous assertions of jurisdictional claims” in the South China Sea.
“So you have to hold them to task for that, but respect the fact that they are a great power and that we can’t just ignore them or deal with them as if they were a minor actor in the international system,” said Arend.
He noted that the term “adversary” is not right because it suggests that China can be defeated.
“We can’t defeat China. We have to engage China,” he stressed. “We have to criticize where necessary, but we have to try to cooperate where possible.”
Arend also considers China as the “greatest” threat to the US where geopolitics is concerned.
“I would say China presents the broadest geopolitical threat because of their power, their influence and their ability to extend globally,” he said.
China reported 4.9% GDP growth for the third quarter of 2020, according to data published by the National Bureau of Statistics.
The figure was up 4.9% from a year ago, making the growth for the first three quarters of 2020 to 0.7% from a year ago.
Economists predict that China GDP growth of 5.2% in the third quarter, based on an average of estimates gathered by Wind Information, a financial information database.
“Generally speaking, the overall national economy continued the steady recovery and significant results have been delivered in coordinating epidemic prevention and development,” the bureau announced in an English-language release.
