Abstract

In the first 30 years of China’s industrialisation, US corporates, skilled workers and Wall Street benefited substantially while the unskilled workers’ employment declined, and their wages stagnated. Trump was the first candidate to exploit the votes of the unskilled workers. On the Chinese side, the overall economy, corporates, and workers all benefited, though the benefits accrued disproportionately to elites and corrupt officials. Less well researched is the negative effect on ASEAN countries, which suffered substantial de-industrialisation during this period.

Since 2015 when China spearheaded its “Made in China 2025” and especially since President Xi’s recent focus on “New quality productive forces”, its rapid climbing of the industrial ladder has increasingly threatened the industrial bases of the US, EU, Japan and Korea. On the other hand, China’s earlier competitive industrial structure with ASEAN has turned into greater complementarity. Over the next decade, dynamic market forces could subsume ASEAN’s industrial structure into significant dependence on China.

The current regional architecture is heavily weighted towards geopolitical and security alliances, with insufficient attention paid to regional geoeconomics. This presents a risk of ASEAN rapidly evolving into an appendage of China’s industrial structure over the next decade. This presentation attempts to conceptualise a framework to help maintain a balance in ASEAN’s future industrial development, in the face of China’s continued industrial ascent.

About the Speaker

Tan Kong Yam is presently Emeritus Professor of Economics at the Nanyang Technological University and NTUC Endowed Professor at RSIS. He is also a board member of Changi Airport Group.

From 1985-88, he was an assistant director in the Monetary Authority of Singapore in charge of exchange rate policy. He was the chief assistant to Dr Goh Keng Swee, the former deputy Prime Minister of Singapore invited by Mr Deng Xiaoping to advise China on economic development strategy (1985-95). From June 2002 to June 2005, he was a senior economist at the World Bank office in Beijing where he worked on the 11^th Five Year Plan with the State Council. Prior to that, he was the chief economist of the Singapore government (1999-2002) and head of department of strategy and policy at the National University of Singapore business school. He was also the director of the Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy (2010-2020).

He is a graduate of Princeton (1975-79, class of 1931 scholar, Paul Volcker Thesis prize) and Stanford University (1980-83), where he completed his Master and PhD in three years.

His research interests are in international trade and finance, economic and business trends in the Asia Pacific region and economic reforms in China. He has published twelve books and numerous articles in major international journals. He has also consulted for many organizations including Temasek, GIC, Exxon-Mobile, Citigroup, IBM, ATT, BP, ABN-AMRO, China Construction Bank.