By Wichai Kinchong Choi

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Connections Between China，ASEAN Foster Opportunity

By Wichai Kinchong Choi

The long-awaited ASEAN economic integration has finally taken a historic step into reality， formally beginning in 2016. Its blueprint is to form a single market and production base in the region，seek balanced economic development and strengthen its competitiveness so as to be incorporated into the world economy.

Its realization will further accelerate the economic growth of ASEAN. In 2015，the ASEAN economic aggregate ranked fifth in the world after the United States，China， Japan and Germany. The Kasikorn Research Center of Thailand predicts that the ASEAN economic aggregate will surpass Germany to rank fourth ather 2018 and account for 5.8 percent of the world total in 2025， exceeded only by the United States and China.

The highly unbalanced nature of the economic development of the ten ASEAN countries has brought huge potential and opportunities for regional economic development. It is advisable for Thailand to give full play to its geographical advantage as a transportation hub and continue to consolidate its status as a high-value manufacturing center. It should transfer its labor-intensive industries with low value added to ASEAN countries with lower production costs， such as Laos， Cambodia，Myanmar and Vietnam.

Since 2009， China has been ASEAN's largest trading partner. With the signing of the free trade agreement in 2011， ASEAN became China's third largest trading partner. The Chinese Government is actively adjusting the national economic structure，and the excess capacity of some industries might be appropriately transferred to the markets of ASEAN countries. The Chinaproposed initiative of building the 21st Century Maritime Silk Road and the Silk Road Economic Belt has created favorable conditions for Chinese enterprises to enter the ASEAN market.

With the growing economic integration of ASEAN， Chinese enterprises which intend to go global should work out a long-term development strategy，fully understand local customs， laws and regulations and make full use of cheap production costs and widely available human resources of neighboring countries. That will allow China to transfer domestic excess capacity overseas and produce quality products meeting the demands of the local market.

To comply with the urgent need of the market development of China and ASEAN countries， the Kasikorn Bank of Thailand has set up branches in Shenzhen， Chengdu and Hong Kong as well as representative offices in Beijing， Shanghai and Kunming（capital of Yunnan Province）. At the same time， it has also instituted similar measures in ASEAN countries such as Laos，Cambodia， Vietnam and Indonesia， closely linking China and ASEAN.

Making full use of its banking network in China and ASEAN， the Kasikorn Bank provides all-round financial solutions for cross-border trade and foreign direct investment， as well as solutions for the regional value chain. Other services include trade financing， corporate loans， business consulting and connection and market information， all of which are powerful resources for Chinese enterprises looking to expand their businesses in the region.

With deeper and closer trade and investment exchanges between China and ASEAN countries， in particular Thailand，the financial cooperation between China and Thailand has greatly expanded. The Kasikorn Bank， for instance， has signed strategic cooperation agreements with more than 20 Chinese counterparts， involving syndicated loans， factoring， leasing，trade financing， and settlement between the RMB and the baht， etc.

The prospects and potential of cooperation between the financial industries of China and ASEAN countries are far-reaching. the close connection between Chinese and ASEAN markets has created enormous business opportunities. In the spirit of mutual respect and learning， China andthailand can make up what the other lacks，draw on each other's strong points and share the risks. The financiers of the two countries should fully understand each other's laws and regulations， strengthen communication and understanding and develop banking products and services in line with market demand. Implementing such operations will offer comprehensive financial services to a broad range of customers keen on business development in the region.

About the author：

Wichai Kinchong Choi is a Senior Vice President of the Kasikorn Bank of Thailand.