China’s charm offensive in Southeast Asia

Attracted by the region's cheap labour, abundant natural resources and growing consumer markets, Beijing is now determined to win over its ASEAN neighbours.

China has been in bitter disputes with Vietnam and the Philippines over territorial claims in the South China Sea. But if you were in Nanning this week attending the China-ASEAN Expo, there was little hint of that simmering tension.
 
Senior Chinese and Southeast Asian leaders, including a ranking member of the standing committee of the Politburo (the most powerful political body in China) and prime ministers of Singapore and Cambodia, senior ministers from Laos, Vietnam, Burma and Thailand have all turned up for the largest trade show in the region.
 
Chinese vice-premier Zhang Gaoli, a member of the standing committee of the Politburo, downplayed the tension with the China’s neighbors, focusing instead on the booming trade relationship with ASEAN, which is tipped to reach US$1 trillion within this decade.     
 
“The peace and stability of the South China Sea concerns regional development and prosperity and the well-being of the people, hence serving the common interests of all the countries in the region, “ he says.
 
Beijing is also turning to ancient history to woo its Southeast Asian neighbours.
 
Chinese president Xi Jinping says the country wants to build a new 21st century maritime silk road with its neighbors, alluding to the maritime expedition of Chinese admiral Zhen He in the 16th century, who explored the region with his large fleet that reached as far as East Africa.
 
He has been promoting that message this week during his tour of Indian Ocean countries on the proposed route that include India, Sri Lanka and Maldives.
 
It is not hard to see why China is launching a charm offensive in the ASEAN countries. The region is of both vital economic and strategic interest to China and other regional powers like Japan and the United States.
 
Economically, the ASEAN countries continue to grow as an economic powerhouse with a combined GDP of $US5.6 trillion and more than 600 million people.  China is the largest trading partner for the ASEAN countries, taking advantage of the free trade agreement signed in 2010.  
 
Furthermore, the ASEAN Economic Community will come into existence at the end of 2015, effectively creating one of the world’s largest free trade areas.  China wants to further entrench its economic position in the region by building a high-speed railway connecting Southwest China and Southeast Asia.
 
Zhang Gaoli also called for upgrading the current free trade agreement with the region, encouraging more trade and investment. Chinese businesses, both state-owned and private, are both showing increasing interest in investing in Southeast Asia.
 
Ministry of Commerce officials even encourage Chinese businesses to invest in the Philippines at a time when the bilateral relationship is at its lowest point due to escalating territorial disputes. The Chinese are busy building industrial parks throughout Southeast Asia to take advantage of the region’s cheaper labour, abundant natural resources and growing consumer markets.
 
China’s charm offensive is taking place at a time when its Asian rival, Japan, is also making a concerted effort to expand its economic influence in the region.
 
Japanese Prime Minister Shinzo Abe visited Indonesia, Vietnam and Thailand in January 2013 as his first foreign trip after his re-election. Abe also urged closer security ties with the region at the recent Shangri-La Security Dialogue organized by the London-based International Institute for Strategic Studies.
 
Abe said, “Japan will offer its utmost support for the efforts of the countries of ASEAN as they work to ensure the security of the seas and skies, and thoroughly maintain freedom of navigation and freedom of over flight.”  
 
This is not to mention the US’ policy of a 'pivot' to Asia, which many Chinese view as Washington’s effort to contain China. “ With a belligerent Japan to its east, being on good terms with its western neighbours [ASEAN] is essential to providing China with much needed strategic stability as it focuses on growing its economy,” says the state-owned English newspaper China Daily.
 
Beijing’s charm offensive in the region is directed at improving it’s standing at a time when some ASEAN countries are becoming nervous about China’s assertive policy.  One of the signature policies is to offer 150,000 scholarships to Southeast Asian students.
 
Zhang Gaoli, one of the country’s most senior political leaders told ASEAN leaders at the expo that China wants to resolve South China Sea disputes peacefully.
 
“China is ready to work with ASEAN countries to implement the Declaration on the Conduct of Parties in the South China Sea in a comprehensive and effective manner,” he says.
 
Peter Cai travelled to Nanning as a guest of the Chinese government.

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