The rise of anti-globalisation sentiment and trade protectionism in the United States and Europe has thrust China into a new role as the world champion of free trade and multilateral agreements, a role that would have been unthinkable even two decades ago.
When President Donald Trump decided to pull the United States out of the Trans-Pacific Partnership (TPP), the focus shifted to the future of trade in Asia. With the TPP on life support, two major initiatives that feature China have taken on more importance.
One is the 16-country Regional Comprehensive Economic Partnership (RCEP), a major trade pact for which talks are nearly two years behind schedule. The other is the Belt and Road initiative, under which Beijing envisions hundreds of billions of dollars being invested in hard and soft infrastructure throughout Central, South and Southeast Asia.
Clearly, the global tables have turned, and the outward-looking view once championed by Washington is now Beijing's.
China is the world's largest merchandise exporter, shipping US$2.1 trillion worth of goods in 2016. It is the third largest recipient of foreign direct investment (FDI), attracting $133.7 billion out of a global total of about $1.6 trillion in the same year, according to the United Nations Conference on Trade and Development (Unctad).
The figures reflect that this once closed communist country is now an open and attractive place to invest, as the champion of the free-trade world. The expansion of Chinese influence into the rest of Asia through trade and investment is growing sharply. But will this pro-trade and pro-multilateralism movement now led by China remain vibrant in Asia as more people grow sceptical about the benefits of globalisation?
Asian experts believe trade in the region, especially Southeast Asia, will continue to flourish in line with economic growth and the rise of the middle class, Belt and Road investments, further integration of the Asean Economic Community (AEC), prospects for the RCEP, and the fresh stimulus of e-commerce.
Wick Veloso, CEO of HSBC Philippines, said better-connected economies to facilitate trade and investment and the flow of goods and people would get a further boost from the Belt and Road, which is a key to government ambitions to double bilateral trade between China and Asean to $1 trillion by 2020.
"The normalisation of relations between China and the Philippines is now helped in part by the Belt and Road initiative, with infrastructure funding and technical support that will create better connected economies that will further facilitate trade and investment and the flow of goods and people between Russia and its partners, especially China," he said in a teleconference with Asean reporters last week.
HSBC does not see the protectionism brewing in the US as an issue for Asean and the Philippines. Most Philippine exports to the US are agriculture-related and not in the same categories where Mr Trump wants to correct trade imbalances, he said.
Sumit Dutta, the CEO of HSBC Indonesia, also said he had not observed any fallout in Indonesia from the new stance of the Trump regime.
"On the business level we continue to see increased and active interest in investment and trade across both the US and Indonesia," he said.
ASEAN PROSPECTS
Tony Cripps, the CEO of HSBC in Singapore, said Asean was the world's fourth-largest trade bloc and about 25% of its trade activity was within the connected countries of the 10-member bloc, so "the fundamentals are incredibly powerful", especially with the growth of the middle class.
"China is Asean's top trading partner and the facilitation of that relationship is incredibly important, and this is where Singapore plays the role in partnership with China in financing infrastructure around the Belt and Road," said Mr Cripps.
Mr Veloso said Asean's strategic geographic location on the Belt and Road network and the region's huge demand for infrastructure make it a focal point for what HSBC believes is a $2.1-trillion investment opportunity.
"What we have on the table right now is the opportunity to be able to have technology and funding from China … and it is important that we become part of the infrastructure projects that the Belt and Road initiative has created and there is opportunity for employment for the Philippines as well," he added.
According to Mr Cripps, intra-Asean trade growth has been substantial, which is helping to offset the impact of external developments, though he conceded that predicting what the US might do next is becoming difficult. Trade is also evenly distributed with the likes of Europe, China, Japan and Australia, so there is less dependence on a single market.
"In terms of investment, the largest investor in terms of FDI into Asean is Asean itself and a lot of that is funneled through Singapore," he noted. "Asean investment is double that of China, for instance ... so there is a lot of that intra-Asean story that we can continue to expect to grow from 25% today on the trade side."
Kamalinne Pinitpuvadol, executive director of the International Institute for Trade and Development (ITD) said that despite the slowing state of global trade, with weak investment and growing protectionism and populism in many countries, it has been forecast that from 2017-21, Asean economies will grow by a range of 3-8% on average and will benefit from joint investments.
"Asean integration will continue to be crucial for trade in Asia along with the arrival of China's One Belt One Road, but we still need to enter into a new dimension of globalisation that is more inclusive," he told Asia Focus at the Trade and Development Regional Forum 2017.
Surin Pitsuwan, a former Asean secretary-general, said the value of merchandise and trade in commercial services in the region nearly doubled between 2005 and 2015.
"Because of this ease of transport, because of this opening up of markets, this liberal order, this level playing field, trade value has gone up twice in 10 years," he noted.
Currently, global trade value is worth between $18 trillion and $19 trillion and expected to grow by 2.5% in 2017, but the growth rate has fallen "very steeply" in the past two years because of anti-globalisation sentiment and the view, espoused by the likes of Mr Trump, that "if you have a trade surplus with us you are cheaters".
"Somehow we have to renegotiate the deals that we have and this time they won't be multilateral but will be bilateral because we can squeeze more out of you," Dr Surin said, paraphrasing the views of the US president.
"You can call it unequal trade and you can call it the politics of foreign trade that have created problems between us but I would say that there is no other alternative but to go back to multilateralism," he continued.
"Countries that used to gain but now think they have lost out in globalisation and multilateralism should rethink because the world has been opened up so that all of us can be benefit rather than only one side, and if you want to back to that [pre-globalisation] world, it will not be healthy for anyone."
INCLUSIVENESS
The lack of inclusiveness that is fanning anti-globalisation sentiment is a genuine concern, especially for the less developed countries in the region, acknowledged Supachai Panitchpakdi, former director-general of the Word Trade Organization (WTO) and the previous secretary-general of Unctad.
He said there was a need for greater inclusiveness in the forming of the global trade framework and that developing countries should have more say in the setting up of world trade regulations.
"It is time for the small players in Asia to play a bigger role in the management of the world trade and economy through crucial international institutions such as the WTO, the International Monetary Fund and the World Bank, because if global trade and sustainable solutions are only left in the hands of major developed powers that used to be gigantic but are now getting poorer, it will not help anyone," he said.
"Developing countries should have more say in the forming of WTO regulations while another problem is the various attempts by developed countries to set up free trade agreements outside of the WTO framework and that is not right."
The failure to reach an acceptable resolution in the Doha round of world trade talks, he said, was due to a lack of strength in the voices from developing countries.
There have been nine rounds of multilateral trade talks since the end of the Second World War, but Doha is the first to focus on helping developing countries to join the global marketplace and share in economic prosperity. Developing nations represent two-thirds of the 155 members, but the EU, the US, China and India still tend to dominate the talks.
Dr Supachai said a global push for investment and development in innovation, sustainable agriculture and renewable energy was crucial to the world's future, and regulations to globally manage them should not be left to the developed world alone to decide.
He believes Unctad should lead the way in promoting a system of global trade negotiations that is beneficial to developing economies, such as the enforcement of measures to support fair competition and laws to protect consumers, as these are not included within the WTO's framework, along with agreements on intellectual property.
"For example, the agreement on geographic indications needs to be revisited because larger nations still do not want developing countries to have GI on their products even though it is very beneficial for farmers who can gain from the value added," he explained.
Despite the concerns, there are positive developments in terms of new regulations that will facilitate trade in Asia. According to the ITD, one of the three important forces playing out in the global policy arena, besides a growing resistance to globalisation and the spread of digital technology, is the growing support for trade and development, especially for developing countries.
This includes the new WTO Trade and Facilities Agreement in February 2017, the regional Framework Agreement on Facilitation of Cross-border Paperless Trade Agreement (FA-PT) in the Asia-Pacific region in 2016, and the "e-trade for all" initiative that Unctad announced in 2016.
In Southeast Asia, meanwhile, Mr Dutta said the AEC was still a work in progress and after 50 years of Asean, he thinks there has been "significant progress" in terms of free movement of goods, capital and people, but "we are not there yet".
Mr Veloso said technology and digital innovations would help speed up the level of integration within Asean, while Mr Cripps said the commitment to the AEC was "there and strong", pointing to a new outline for liberalisation of trade and improvement of the region's digital position by 2025.
He said he was confident that "liberalisation and activity will become easier within the bloc over time".