Based in Beijing, PR China, the “Support for Economic Cooperation in Sub-Regional initiatives in Asia” (SCSI) Programme, commissioned by the Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, aims to intensify cross-border economic relations between China and four neighbouring countries – Cambodia, the Lao PDR and Viet Nam, as well as Mongolia – within the framework of sub-regional mechanisms like the Greater Tumen Initiative (GTI) – and in the beginning of the programme the Pan-Beibu Gulf (PBG) Economic Cooperation – as well as the ASEAN-China Free Trade Area (ACFTA). The objective thereby is to ensure the equal inclusion of these countries’ interests in the respective regional integration processes – namely Mongolia within the cooperative context of GTI in Northeast Asia (NEA) as well as Cambodia, the Lao PDR and Vietnam within PBG or ACFTA in Southeast Asia. By providing a means to bypass lingering political conflicts, these regional economic communities (RECs) have proven to enable pragmatic cooperation on practical issues of common interest.
Initiatives aimed at fostering regional economic cooperation and integration play an increasingly important role for economic as well as social development in Asia. Apart from helping to dismantle trade barriers, the initiatives promote investment and help to improve the capacity of the regions to connect to the global market. At the same time, a common market means that countries in the region are better protected against economic stagnation and crises in industrialised countries. Moreover, subregional initiatives help improve the degree to which land-locked countries are connected to those on the periphery, close to borders. As a result, in addition to reducing regional disparities and therefore alleviating poverty, the initiatives help the regions to develop competitive advantages.
Although the global trend towards cooperation between two or more states is particularly pronounced in Asia, more needs to be done to improve the implementation of these cooperative arrangements at institutional level and private sector involvement.
The economic cooperation between the People’s Republic of China and selected, economically weaker neighbouring countries is strengthened through subregional initiatives such as the Greater Tumen Initiative (GTI) or regional mechanisms like ACFTA.
The SCSI Programme aims to support public stakeholders at the (sub-) regional, national, and provincial level, as well as private stakeholders in the context of sub-regional cooperation initiatives and regional free trade agreements by providing capacity building and organising trainings and dialogue events within the areas of trade facilitation, cross-border cooperation, maritime cooperation and private sector enhancement. The programme intends to enhance the structural conditions for regional economic cooperation, improve implementation capabilities for relevant stakeholders, and foster inclusion of the private sector in the regional integration process. Wherever suitable, it contributes international and European experiences as part of the process, and – in cooperation with other GIZ programmes in the region – the transfer of regional good practices through facilitation of knowledge exchange.
The project operates in the following three areas, which are closely interlinked: 1.) Strengthening the organisational structure of sub-regional initiatives by providing international expertise, setting up knowledge-sharing platforms and technical training about internal institutional processes; 2.) Strengthening the implementation capacity of actors involved in sub-regional cooperation regarding project planning, implementation and monitoring within the framework of RECs; 3.) Improving the private sectors’utilisation rate of the ACFTA, in cooperation with export-oriented business associations and chambers of commerce to overcome barriers to trade.
The project builds on the results of the aforementioned predecessor project RCI in Asia as well as on the experience gained in international cooperation with regional programmes in the fields of economic integration and private sector development.
The information and training courses offered by the project on the use of regional trade agreements by the private sector improve access to the Chinese market for economically less developed neighbouring countries. The project also encourages the inclusion of private companies in local cross-border cooperation.
The capacity of partner countries to become involved in economic integration processes through regional initiatives is enhanced and will further evolve due to sector studies and the development of expertise and resources. Training courses and, in particular, the regional transfer of knowledge as a form of South-South cooperation have already strengthened the organisational structures and the professionalism of regional initiatives and secretariats.
Greater Tumen Initiative
The Greater Tumen Initiative (GTI) is an intergovernmental cooperation mechanism which had been initiated by the United Nations Development Programme (UNDP) in 1991 and was subsequently founded in 1995 under the name Tumen River Area Development Programme. It has been aimed at strengthening economic and technical cooperation, as well as attaining greater growth and sustainable development in North-East Asia (NEA) in general and the Greater Tumen Region in particular. After the withdrawal of the DPRK in 1999, the four remaining founding members (People’s Republic of China, Mongolia, Republic of Korea (RoK), and Russian Federation) continued to cooperate under the GTI framework in order to achieve their common strategic objectives in the areas of transportation, trade and investment, tourism, energy, environment, local cooperation, and legal transition. While the establishment of a dialogue platform in the politically sensitive environment of the Tumen River area in itself is already a tremendous success, the GTI member countries agreed to further enhance their cooperation which is why the organisation is currently in the process of transferring itself into an independent legal entity. This process, which is scheduled to be completed by 2016, will lift the initiative to a recognised international organisation.
Pan-Beibu Gulf Economic Cooperation
The programme started implementation with the aim to support the Pan-Beibu Gulf (PBG) Economic Cooperation. It was jointly launched in 2006 by the Asian Development Bank (ADB), the member states of the Association of Southeast Asian Nations (ASEAN), and the People’s Republic of China. It was considered to represent one of the main vehicles for further ASEAN-China integration, next to the already well established Greater Mekong Sub-Region (GMS) Economic Cooperation Program. While the GMS Program supports cooperation in the continental part of the ASEAN-PRC region, PBG focused on the maritime aspects of ASEAN and the PRC’s southern coastal provinces. Its consequently strong emphasis on maritime trade and port cooperation has been re-affirmed by the Roadmap for PBG Cooperation which has identified “Ports and Logistics” and “Trade Funding” as the initiative’s two priority sectors. The road map was reviewed by the responsible ministries of the initiative’s member states but so far has not been ratified. The programme therefore currently focuses more on private sector development within the ASEAN-China Free Trade Area (ACFTA) – which covers the same area – and the inlcusion of the business community from Cambodia, Lao PDR, and Viet Nam into economic cooperation with China. The Framework Agreement of ACFTA has been upgraded in 2015 to provide further trade failictation measures but so far stays underutilised – especially within the business community of the three programme focus countries in Southeast Asia.