Xi Jinping

Xi Jinping outlines US$1tr trade target with Asean states

President pledges more investment to improve ties in historic speech to Indonesian parliament

PUBLISHED : Friday, 04 October, 2013, 12:00am
UPDATED : Friday, 04 October, 2013, 8:59am

President Xi Jinping yesterday became the first foreign leader to address the Indonesian parliament, pledging more investment initiatives to bolster ties with the region while sidestepping territorial disputes over the South China Sea.

Xi said China was ready to enhance political and strategic trust with Association of Southeast Asian Nations (Asean) members.

The president's overture was aimed at mending regional ties overshadowed by recent tension involving the South China Sea.

The approach was described by some Chinese analysts as an indication of Xi's new foreign policy initiatives. While the territorial disputes have not hindered trade links, Xi is using the trip to reinforce China's role as a major regional trading and investment partner.

He told the Indonesian lawmakers China would strive to ensure the trade volume with Asean countries reaches US$1 trillion by 2020.

He also restated the proposal to establish a regional infrastructure investment bank, an initiative he raised during a visit to the region in March.

Xi later travelled to Malaysia on the second stop of his trip.

Ian Storey, a senior fellow with the Institute of Southeast Asian Studies in Singapore, said trade links with China had grown rapidly regardless of the maritime tensions.

"The establishment of an infrastructure investment bank will not redefine the growing trade ties we've seen in the last few years," Storey said.

"It will show that China is not only an important trade partner, but also an important investment player in Southeast Asia."

Professor Zhang Mingliang , a specialist in Southeast Asian affairs at Jinan University, said Xi's speech was symbolic as it underlined China's significance in the region.

"Even if [US President Barack] Obama were to be invited to give a speech to the parliament, he would be the second one to do so, not the first one," he said.

Indonesia has played an active role in raising disputes with China through the Asean platform and it has dismissed as illegal the "nine-dash line" Beijing has drawn around most of the South China Sea to mark its territorial claims.

As the region's biggest economy and population, Indonesia has also served as an intermediary on important issues.

Storey said Indonesia had helped to restore consensus among Asean states and sought to reduce damage after a contentious meeting among Asean foreign ministers in Phnom Penh last year. At the meeting, the foreign ministers failed to issue a joint communiqué for the first time in its 45-year history.

Member states failed to reach an agreement on whether to include in the communiqué a diplomatic row between China and the Philippines over the Scarborough Shoal. Observers attributed the failure to Beijing's efforts to divide the body.

Xi made no direct reference to the South China Sea in his address. Instead, he said China and "certain Southeast Asian countries" must use peaceful methods and friendly talks to address disagreements over territorial sovereignty and maritime rights.

Zhang, from Jinan University, said the territorial issue would not be a priority in future regional meetings as China had agreed to engage in discussions with Asean member states on the Code of Conduct (COC), a set of guidelines Asean countries hope to introduce as a legally binding document.

A working group meeting on the COC was held last month in Suzhou , Jiangsu province. However, Storey said the meeting in Suzhou had yielded no substantive agreements, while Asean countries had allowed China to set the pace and scope of the discussion.

"Asean wants an early conclusion [to the COC negotiations], but China doesn't want it, and there is not much Asean can do."