China’s reopening is more than just boosting tourism in Asean

Tourism is on the rise fuelled by the pent-up demand of mainland Chinese visitors, while trade is being reinvigorated driven by Chinese consumption of goods and services in the region. Furthermore, Chinese investment is expected to resume, with the Regional Comprehensive Economic Partnership (RCEP) further accelerating investments between China and Southeast Asia, particularly in the manufacturing sector. 

Revitalizing Southeast Asia's Economies 
Chinese tourists have always been a significant contributor to the tourism industry in the region, with countries like Thailand and Singapore being major beneficiaries. In Thailand, Chinese tourist expenditure was equivalent to 3.2% of their respective nominal Gross Domestic Product (GDP) in 2019. This year, the country is expecting five million Chinese visitors. 

Singapore, which saw 3.6 million Chinese tourists pre-pandemic in 2019, is likewise delighted about their return. According to the latest numbers from the Singapore Tourism Board (STB), the first quarter of 2023 saw almost 124,000 Chinese visitors to Singapore, and the numbers are expected to increase. In comparison, the total number of visitors from China in 2022 was roughly 130,000. 

The increase in demand from Chinese businesses could create new opportunities, including the expansion of existing trade relationships. There is also massive potential for Asean and Chinese companies to collaborate and expand their e-commerce market. Cross-border e-commerce platforms such as Lazada have emerged in Southeast Asia, importing more Chinese goods to meet the needs of the region’s growing middle class. These platforms also create new channels for Asean businesses to sell their products and reach out to Chinese consumers. 

Moreover, Asean countries could attract investment by tapping into China's Belt and Road Initiative (BRI). This could provide funding for infrastructure projects, such as roads, ports, and railways, which would significantly enhance economic growth and competitiveness. 

Prospering in Peace 
While the reopening presents opportunities, there are also challenges such as growing geopolitical tensions between China and the West. Asean could play an important role in reducing these tensions. The resumption of travel between China and the region can serve as a catalyst leading to constructive dialogue and cooperation. Asean’s role in mitigating these challenges will be crucial in maintaining peace and stability in the region and beyond. 

The conflict between Russia and Ukraine, and the ongoing trade and technology war between the US and China have already contributed to the current economic slowdown, severely affecting Asean's export-oriented economies. China's renewed Russia partnership has been interpreted in the West as a hostile move. Any further escalation in tensions between China and its neighbours could lead to increased military spending, diverting resources away from social programmes and economic development. 

With Asean’s central role in relations between the East and West, governments across the region will want to seek balance by maintaining close relations with both the US and China. With China as a predominant trading partner, Asean countries need to ensure that the tensions between China and the US do not boil over and that they continue to trade peacefully. 

The priorities of American strategy in Southeast Asia are security, politics and economic development while those of China are all focused on economic growth, in line with the needs of countries in the region. Asean could facilitate dialogue between the US and China to promote understanding and reduce tensions. The organization has a long history of promoting peaceful dialogue and conflict resolution in the region and could leverage this experience to bring the two countries together. 

Moreover, Asean can work to promote economic interdependence between the US and China. By promoting trade and investment, Asean could encourage the two countries to work together and avoid economic conflict. Also, by addressing issues such as territorial disputes and ensuring freedom of navigation in the South China Sea, Asean could help to reduce tensions between the US and China. 

If Asean can continue to work with the US to enhance security cooperation in the region, while at the same time ensuring that with China, there is no disruption of trade, then tensions between both countries will be reduced. The massive size of Asean, with a young population and outward-looking policies, has been key to Asean’s economic growth. China’s reopening is a benefit to Asean, but the expansion of tourism, trade and investment is only possible if stability is maintained between Asean, China, and the US.

Vijay Eswaran

Vijay Eswaran is a prominent Asian thought leader, philanthropist, speaker, and author. He is the founder and Executive Chairman of the QI Group of Companies, a multinational conglomerate headquartered in Hong Kong that has diverse business interests in areas such as education, retail, direct selling, real estate, hospitality, and luxury products.