AAS Annual Meeting

Southeast Asia Session 534

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Session 534: China's Rise in Southeast Asia - Sponsored by the Journal of Current Southeast Asian Affairs

Organizer: Anne Booth, SOAS, University of London, United Kingdom

China’s rise had a huge impact on the region of Southeast Asia. In the 1990s China was perceived as a threat to its Southeast Asian neighbours in part due to its conflicting territorial claims over the South China Sea and its support of communist insurgencies. This perception began to change in the wake of the Asian Financial Crisis 1997/98. Today, China’s charm offensive has downplayed territorial disputes while focusing on economic relations with Southeast Asia. This panel looks into China’s growing presence and influence in Southeast Asia from several perspectives: it analyses Chinese investment policies in Southeast Asia and its economic and political implications for the region. The panel also discusses the changing pattern of bilateral relations between China and several Southeast Asian states. China has forged strategic partnership with some Southeast Asian states and transformed former hostile relations into co-operative partnerships. The panel is sponsored by the Journal of Current Southeast Asian Affairs.

China's FDI in the ASEAN Region
Margot M. S. Schueller, German Institute of Global and Area Studies, Germany

Many of China’s Southeast Asian neighbours have rich natural resources and are becoming more interesting as a market for Chinese capital and consumer goods. In order to secure the access to the ASEAN market for its companies, the Chinese government is applying a complex mixture of different policies that support Chinese direct investment in Southeast Asia. This strategy seems to be successful as China has become one of the most important trading partners und source of investment for most of the ASEAN member countries, especially the smaller ones. The paper analyses the factors that explain the development and pattern of foreign direct investment (FDI) of Chinese companies in the ASEAN region. By applying the concept of institutional and structural push and pull factors we want to show what exactly the Chinese government’s policies towards investment in the ASEAN are in terms of countries and sectors and what kind of incentives the ASEAN member countries offer to attract Chinese companies. The analysis is based on the institutional push factors of Chinese FDI in the ASEAN, particularly on the Countries and Industries for Overseas Investment Guidance Catalogue published by the Chinese government. In order to understand the incentives offered by the ASEAN member countries to attract Chinese companies, the various country-specific investment policies are analysed and complemented by findings obtained in interviews conducted during a field research in December 2009 in some of the ASEAN countries.

Overseas Chinese and China: Changing Links since the 1990s
Krislert Samphantharak, University of California, San Diego, USA

The paper examines the changing role of the overseas Chinese in key South East Asian economies since the 1990s, and the interaction of South East Asian business groups with their counterparts in China. The paper will also examine investments by Chinese-owned conglomerates in China and the extent to which they have been successful

Balancing growth and environmental protection in China-ASEAN relations"
Joern Dosch, University of Leeds, United Kingdom

Achieving a balance between trade and investment liberalisation and environmental protection is one of the key challenges confronting both the Southeast Asian states and China. All have embarked on far-reaching trade liberalisation programmes, driven by World Trade Organization membership, membership in the ASEAN Free Trade Agreement or other international factors. The expansion of trade and liberalisation initiatives further pressures the environmental sustainability of the region. Apart from formal trade and investment regimes, illegal trade—particularly of wildlife and timber products—is also undermining the sustainability of the region’s environment. A test case for the seriousness of environmental considerations in national trade and investment deliberations is the ASEAN–China Free Trade Agreement (ACFTA). However, despite the considerable volume of trade in natural resources such as minerals, agricultural goods and wood, and in products derived from these resources, as well as an expected increase in the trade of products that fall into the most polluting sectors, the ACFTA does not contain provisions for cooperation on environmental problems that may arise as a result of trade liberalisation. The paper argues that a) one reason for the low level of intergovernmental commitment to environmental protection and sustainability with regard to trade and investment matters is a lack of societal lobbying and pressuring; and b) while the quantity of environmental policies and regulations has increased, environmental ministries are often ill-equipped either to enforce existing regulations or to design, implement, monitor, inspect and enforce new effective environmental policies

"China-Indonesia Economic Relations since Suharto"
Anne Booth, SOAS, University of London, United Kingdom

The paper looks at the considerable changes which have occurred in trade and investment relations between China and Indonesia since 1998. Over most of the Suharto era, relations were very limited, but since the late 1990s trade and investment flows have increased. But the growth has also generated frictions, not least in those industries which have felt threatened by Chinese competition, both in local markets and abroad. With the full implementation of the China-ASEAN FTA in 2010, protests have mounted that China is imposing a colonial pattern of trade on Indonesia, importing raw materials and exporting manufactures which compete with local production. The paper tries to evaluate these claims and looks at possible future directions in trade and investment flows between the two countries.

The limits of China’s political sensitivity in its relations with continental Southeast Asia: managing bilateral disagreements with Burma/Myanmar
Jurgen Haacke, London School of Economics and Political Science, United Kingdom

Since launching its policy of establishing good neighbourly relations, China’s influence in continental Southeast Asia has grown steadily, as Beijing has strengthened its relationship with the Association of Southeast Asian Nations (ASEAN), emphasised political stability in its southern periphery and promoted greater economic interdependence, in part through development assistance. Known for taking seriously deep-seated security concerns vis-à-vis the People’s Republic and a nationalist mind-set among decision-makers across the sub-region, Beijing is generally credited with opting for political accommodation and prudent policy choices, not least to support the notion of China’s peaceful rise and to preclude continental Southeast Asian states from harming Beijing’s regional and wider international interests. The paper examines in what ways this assessment applies to the case of China’s relations with Burma/Myanmar. Against the backdrop of China’s efforts to translate into diplomatic practice conceptions of the PRC as a responsible great power as well as international attempts to influence Naypyidaw on the issue of political change, it asks in particular how Chinese decision-makers have managed bilateral issues over which Beijing and the current military government in Burma/Myanmar have disagreed.

Chinese Investment in Hydropower and the Restructuring of Politico-economic Relations in the Mekong Basin
Oliver Hensengerth, University of Southampton, United Kingdom

The focus of the paper will be on the political issues involved in China's investment in hydro power projects in Laos and Cambodia. It is argued that this investment should be viewed as part of China's strategy of restructuring both political and economic relations with countries in the Mekong River Basin. The paper will examine how China proposes to conform to international standards in the hydro power industry, especially as these relate to environmental protection and social protection. Field data from both China and Cambodia is drawn on in the paper.