The proportion of old people is still very small in ASEAN countries, when compared with Western countries. In 1980, the proportion of the population aged over 60 was 7.2 per cent in Singapore, 5.7 per cent in Malaysia, and around 5 per cent in Thailand, the Philippines, and Indonesia. In Western countries, by contrast, this proportion ranges between about 12 and 30 per cent. The question might then be raised as to why it is necessary at this time to consider ageing a phenomenon deserving of serious attention in the ASEAN region. The answer is not that an ageing crisis is just around the corner; it is not. By the turn of the century, the proportion of aged in ASEAN countries will still be below 8 per cent, except in Singapore. But in all cases, the proportion will be rising. In other words, the number of old people will be increasing faster than those at all other ages. This trend will continue at an accelerating pace in the early twenty-first century. Therefore, what is faced is not an immediate crisis of ageing, but rather a steady trend which will lead to many changes in the way societies work, and raise many questions about appropriate approaches to problems raised by the steadily increasing share of old people in the population. The time to begin examining these issues is now, not later when the issues have assumed major importance and some of the options may have been foreclosed.

Population ageing over the next decade or two will be of a different order of magnitude in Singapore compared to the other ASEAN countries. Cowgill and Holmes (1970) have proposed that populations should be considered as “aged”, “mature”. “youthful”, and “young” on the basis of the proportion of total population aged 65 and over:

Translated into proportions aged 60+ (the measure used in the present study) the definitions would be roughly as follows:

I. Introduction

1. Objectives of the Study

The textile and garment industry is one sector where developing countries have successfully competed with industrial countries. Over the past decade, the rapid increase in the production capacities of ASEAN countries has placed the region in the same league as the major producers and exporters of the industry. The industry plays an important role in the economies of the ASEAN members, except possibly for Singapore. Undeniably, textiles offer vast potentials for improving the capacity of each country to earn foreign exchange. However, the rapid expansion of trade has been held back by the growing protectionism of industrialized countries, such that textiles is now probably the most regulated item in international trade.

While the issue of protectionism has caused much concern, many foresee that the ASEAN textile industry will be affected by another development. This is China's recent emergence as a major exporter of textiles and clothing. Although the world's largest, the Chinese textile industry has remained inward-looking for many years. More active involvement by China in world trade, particularly in textiles, is viewed as a threat by many producers in the ASEAN region.

This paper attempts to analyze the impact of this recent development on the ASEAN textile industry and on ASEAN-China economic relations. The specific objectives of this paper are as follows:

1. To analyze the structure of the industry and the pattern of its development in the ASEAN region;

2. To identify the problems of the industry and to assess possibilities for the future; and

3. To evaluate the impact of China's emergence as a major exporter of textiles on the ASEAN textile industry and on ASEAN-China economic relations.

2. Scope and Limitations

The textile industry, as referred to in this study, comprises two separate industries: textiles (namely fibres, yarns, fabrics, and other products such as thread, twine, net, and cordage) and garments (namely wearing apparel and accessories).

I. Introduction

China's trade relations with the countries of ASEAN goes back a long time. These relations underwent a critical change in the 1970s and since then bilateral trade has expanded considerably. In 1970, trade values were only US$180 million; by 1980 they had grown to US$1.85 billion, and by 1986 to US$3.35 billion, a more than a seventeen-fold increase over 1970. The variety of commodities traded has grown considerably, with petroleum as one of the important commodities. The proportion of petroleum in this trade is not large, but with the recent growth of the petroleum industry in Brunei and Indonesia, the countries of ASEAN have been closely watching the expansion of China's petroleum industry and its exports. This paper is a study of the development of China's petroleum industry and its effect on economic relations between China and ASEAN.

II. Development of the Petroleum Industry in China

China was one of the earliest countries to discover and use petroleum and natural gas. More than 2,000 years ago, in the Qin and Han Dynasties, oil and gas were found in what are the modern provinces of Gansu, Shaanxi, and Sichuan. The Annals of the Han Dynasty record the existence of an “inflammable stream” near the present-day city of Yan'an, and note that the liquid was used for lamps, lubrication, as an anti-corrosive, and as fuel for boiling bitter to make salt. However, the use of petroleum as a source of industrial energy has a short history of less than a century.

China's modern petroleum industry dates from the end of the nineteenth century. However, the semi-feudal, semi-colonial nature of the society precluded the establishment of a national industry. A few fields were exploited but soon fell into disrepair and near bankruptcy. By 1949, there were only eight outdated oil rigs producing 120,000 tons. China was called an “oil-poor country”.

1. Petroleum Prospecting and Growth

With the founding of the People's Republic of China, (PRC), the petroleum industry began to develop rapidly.

I. Introduction

There is a growing body of literature on the services sector in ASEAN. Koh (1985) studied the role of the services sector in ASEAN. Lee (1986) assessed trade in services between ASEAN and the United States. Tucker, Seow, and Sundberg (1983) looked at services in ASEAN-Australia trade. Pang (1985) provided an overview of ASEAN-EC trade in services. The present paper thus complements the existing studies on the services sector in ASEAN as it examines trade in services between ASEAN and China.

It is always difficult to define services as they constitute intangible output. There have been various attempts to define services and yet there is still no agreement among economists as to what constitutes a service (Riddle 1986; Bhagwati 1984; Kravis 1983; Hill 1977; and Smith 1973, among others).

Since the purpose of the present paper is to provide an understanding of the nature and importance of trade in services between ASEAN and China, a broad definition of services is adopted. Following the International Labour Organization (ILO) and Organization for Economic Co-operation and Development (OECD), the services sector comprises wholesale and retail trade, restaurants and hotels, transport, storage and communications, finance, insurance, real estate and business services, public administration and defence, and community and personal services. Trade in services refers to trans-border transactions in services between residents and non-residents. It also includes both trade and investment in services or invisibles in the balance of payments, including factor services such as investment income and workers' remittances.

Specifically, we want to distinguish the following categories of trade in services.

(1) Factor services and non-factor services. Factor services are normally defined as the investment income component of services plus requited transfers. The latter consists largely of workers' remittances. Thus, factor services are investment income and workers' remittances. Non-factor services comprise all other invisibles in the balance of payments.

I. Introduction

China's policy of opening to the outside world was made in late 1978. However, places are open to various degrees. Therefore there have been four echelons of opening — Special Economic Zones (SEZs), coastal open cities, coastal open economic zones, and inland.

August 1980 saw “Regulations Governing the SEZs in Guangdong Province” authorized at the fifteenth meeting of the Fifth People's Congress Standing Committee. Shortly afterwards came the promulgation establishing four SEZs in Shenzhen, Zhuhai, Shantou, and Xiamen. In April 1984, the Chinese Govern- ment declared the opening of fourteen coastal harbour cities and Hainan Island, after it had gained experience from the four SEZs and the setting up of Economic Zones for Technical Development in open cities with good environment. Some preferential policies concerning the SEZs were to be adopted to attract foreign investment, which aimed to introduce advanced technology and start joint research and production of new technology, products, and industries. January 1985 saw the Chinese Government's decision to open up the Yangtze and Zhujiang River Deltas, and the Southern Fujian Triangle as coastal economic zones. Thus, the SEZs, coastal open cities, economic zones, and inland open China to the outside world, in a sequence which moves from seashore to inland, with different levels and emphases. (Up to the end of 1986, 80 per cent of the operating foreign-invested enterprises were located in the coastal open cities.) Data on the SEZs are given in the Appendices.

It should be pointed out that each of the various levels of opened areas has its own characteristics. SEZs profit much from their grographical position of easy access to the world market. The fourteen coastal cities have advantages mainly in their thriving economy and all kinds of talents. They are places abundant in resources, particularly foundations for industry. The population in these cities is less than 8 per cent of the national total, but the industrial output value accounts for 23 per cent of the national total.

Given the increasing length of life after retirement from work, it is important that the potential contribution of the elderly in the community be maximized, and that they be treated as a resource rather than a burden. In Western countries, efforts are increasingly being made to tap the abilities and interests of the aged through such programmes as retired executives' programmes in which retired executives provide voluntary assistance in the running and management of small businesses; foster grandparents' programmes in which elderly people can become surrogate grandparents to children or young people who lack close family or are estranged from close family for some reason; and involvement in a wide range of community activities and associations requiring the input of time, of which the elderly have more to spare than do younger people who are in the work-force or busy raising families.

In Southeast Asia, there is less “institutionalization” of the community role of old people, but because of the respect accorded to age, and the prevalence of community activities involving all age groups rather than age group-based activities characteristic of more highly urbanized societies, there is a more automatic involvement of the elderly in the affairs of the family and of the community. For example, in the Philippine survey, about 40 per cent of the elderly females reported that they spent most of their time caring for other family members.

Related to the role of the elderly in the community is the question of their leisure time activities. It is clear from Table 8.1 that listening to the radio and watching TV are important leisure time activities, being engaged in by roughly half the respondents in all countries, with little difference between the sexes. Talking with friends/neighbours occupies about a quarter of respondents in most countries, though fewer in Singapore and much more in Thailand. The importance of reading appears to differ quite markedly by country and sex, the differentials being linked, no doubt, to differentials in literacy.

ASEAN countries, whether of necessity or from philosophical conviction, seek to maintain the existing system of family care and concern for the elderly. The family is seen as ultimately responsible for its elderly dependants, and institutionalization to be used only as a last resort. The aim is to obtain as much community participation as possible. This philosophy is reflected in the kinds of income maintenance, health care, recreational programmes, and publicly funded institutional care available to the elderly. Governments provide limited special services for particular groups of the aged, and rely on private and charitable groups to assist in providing for the needy. Social security programmes are typically limited to employed individuals with complementary special welfare programmes for the impoverished and the impaired.

Thailand is perhaps typical of the other ASEAN countries in the increasing attention given in government development plans and in welfare programmes to the needs of the aged (see Debavalya and Boonyakesanond 1982). The Thai Government set up the National Committee on Ageing in February 1982, chaired by the Minister of the Interior. This committee has established seven subcommittees and held a national “Seminar on Roles of all Organisations in Longterm Planning for Elderly Population”. In the Fifth Five-Year Plan (1982–86), the needy aged are considered a special target group along with many other underprivileged groups such as orphans, needy children, victims of disasters, the disabled, etc. In addition, it is the policy of the government to encourage the participation of the private sector in the provision of social welfare services for the needy aged. The plan aims to strengthen the family as a basic social unit to enable it to care for its own elderly members more adequately. As well as residential care where needed, non-institutional care, particularly in the form of social service centres for the elderly, will be expanded. In terms of health care, the under-5s and over 60s are singled out as groups to receive special emphasis. A programme of free medical care for those aged over 60 is being gradually introduced in general hospitals throughout the country.

I. Introduction

There are two main sections in this study. The first reviews the strategic policy dimension and posture of ASEAN members in their external economic relations and their implications for ASEAN-China economic relations. The second examines the policy instruments and institutional mechanisms of individual ASEAN countries which have evolved in response to the economic opening up of China and in the context of its new economic relationship with ASEAN countries.

It is inaccurate to suggest that there is a collective ASEAN posture with regard to external economic relations with China. To date there are no official ASEAN-wide policies and institutional mechanisms which constitute the official conduits for economic relations between ASEAN as a group on the one hand and China on the other. All existing economic relationships, particularly at the governmental level, are conducted at the national level on a bilateral plane.

There are, however, some ASEAN private sector initiatives to approach China collectively. The approach is nascent and at the brainstorming stage. In particular, the G-14 for ASEAN Economic Co-operation and Integration, initiated by ASEAN-Chambers of Commerce and Industry, has suggested collective ASEAN initiatives with socialist economies which include China. But, for its rhetoric and numerous recommendations, the question of the China-ASEAN economic relations was deliberately made a low priority and conspicuously kept at a low profile.

However, with respect to its external economic relationships with other countries, ASEAN has developed various institutional mechanisms and broad pro-active policies collectively to have dialogues with major countries (particularly the United States, Japan, and EEC members) and to have a common stand on certain global economic issues (particularly in trade and protectionism). There are definitely areas of commonality and shared interests in regional and global economic issues, and it is in these that one can identify a common, if not collective, policy position. In spite of this, we must recognize that there are substantial differences in views and postures among the ASEAN countries on various global economic matters. The following section will highlight some of these collective ASEAN policy positions.

Introduction

In Thailand the public sector consists of three major institutions: the central government, state enterprises and local governments. The size of the Thai public sector has expanded rapidly both in absolute terms and in relation to the total size of the economy.

The central government finance is made up of budgetary and non-budgetary transactions. Budgetary transactions refer to the fiscal transactions as stated in the annual budget. They are financed by budgetary receipts which may take the following forms: tax revenue, sales and charges, contributions from state enterprises, domestic borrowing and use of treasury cash balance.

Non-budgetary transactions are those outside the annual budget, which may take the forms of foreign grants and loans and extra-budgetary funds. The extra-budgetary funds consist of deposits of public agencies with the treasury and revolving funds set up for specific purposes. These funds are not subject to budgetary control and depositing agencies can disburse their funds without having to go through the normal budgetary procedures. An example of revolving funds is the Oil Fund, which was set up to stabilize the retail prices of petroleum products through charges and subsidies on their retail sale.

Central government deficit on a cash basis consists of a budgetary cash deficit plus non-budgetary cash deficit made up of an extra-budgetary deficit and external loans and grants. Thus, while budgetary deficit may be financed only by domestic borrowing, central government expenditure financed by external loans forms a part of non-budgetary transactions.

State enterprises are the second major public sector institution in Thailand. Their budget consists of a current and a capital budget. While the current budget is mostly financed by their operating revenue, most capital expenditure is financed by domestic and external borrowings. These borrowings require the approval of the National Debt Committee at the Ministry of Finance, which is responsible for ensuring consistency with macro-economic targets. Certain state enterprises do receive subsidies from the central government budget. These enterprises are engaged mostly in promotional activities and do not earn revenue. Tourism Authority and Sports Authority are two examples of such enterprises receiving subsidies.

Introduction

The public sector in Malaysia consists of the federal government, thirteen state governments, four municipalities (namely Penang, Ipoh, Kuala Lumpur and Malacca), non-financial public enterprises (NFPEs), and public financial institutions such as the Employee Provident Fund (EPF) and the Bumiputra Investment Foundation. As of September 1988, there were 847 government companies (including government financial institutions), with paid-up capital amounting to $19,652 million, of which the government contributed $13,819 million1 (Economic Report, 1988-89, p. 96).

The fiscal system of Malaysia operates under a federal structure. Under the Federal Constitution (10th schedule), the main revenue sources assigned to the states are receipts from land sales, revenue from lands, mines and forests, entertainment duty and Islamic religious revenue. Additional sources of revenue are assigned to the states of Sabah and Sarawak. These include import and excise duties on petroleum products and export duty on timber and other forest produce. The Constitution also provides for capitation and road grants to the states. In addition, special grants are provided to Sabah and Sarawak.

During the six years ending 1988, consolidated revenue of the thirteen states (excluding grants from the federal government) amounted to about one-sixth of the total revenue of the federal government. The operating expenditure of all the states combined increased steadily from 8.5 per cent of the operating expenditure of the federal government in 1983 to 22.5 per cent in 1988.

The quantitative importance of development expenditure of the NFPEs has been considerable. Thus, during the six years ending 1988, development expenditure by the NFPEs was about 70 per cent of such expenditure by the federal government.

In spite of the importance of the state governments and the NFPEs, this paper focuses on the fiscal system and practices of the federal government of Malaysia and their probable impact on resource allocation, incentives and growth, equity and stabilization.

I. Introduction

The last two decades have seen the relationship between the People's Republic of China (hereafter China) and ASEAN countries undergoing a dramatic evolution. The end of the Vietnam War, the U.S.-China detente, and the Vietnam invasion of Kampuchea are major events which moved many countries of ASEAN to normalize their relationship with Beijing. The changes which took place within China itself have also led to closer co-operation between ASEAN and China.

Many argue that the death of Chairman Mao Tse-Tung and the purge of the Gang of Four escalated the new emerging trend in China and led to the rise of Deng Xiaoping to the supreme position in China. Under Deng, China which had been under the strict socialist path, began to reform her economic system based on the Four Modernization Principles. The modernization of China, which began in 1970, comprises new thinking on the economic system, institutions, and economic relationship with the rest of the world — the so-called ‘open-door policy’. These developments have caused some concern both within China and in the rest of the world. The introduction of the profit motive and the price system into China means that there can be incentives for Chinese to operate according to the market principle. At the same time, China has not solved the problems arising from the parallel operation of the price mechanism system and the planned economy. At present, the price mechanism is limited to certain commodities and localities and it is very difficult to envisage its extension to the whole vast economy.

The introduction of the market system, while generally lauded by outsiders, has also led to a price spiral resulting in a higher cost of living for the Chinese. The economic reforms which China undertook means also that she is more willing to integrate with the international economy. Since China has reached self- sufficiency in many commodities, her exports of surplus items have played a significant role in her economic relations with the rest of the world in general.