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    China Business
     May 16, 2008
Page 2 of 2
China's embrace leaves US in cold
By Fu-kuo Liu

generally on developing regional strategic frameworks through infrastructure linkages, cross-border trade and investment, and upgrading competitiveness of regional countries.

In order to become a prosperous, integrated, and harmonious subregion, GMS member states have adopted a strategy to enhance connectivity, improve competitiveness and promote a sense of community. Their joint efforts have been put forward in nine priority sectors - agriculture, energy, environment, human resource development, investment, telecommunications, tourism, trade and transport - and three priority geographical areas - the

 

North-South Economic Corridor, a East-West Economic Corridor, and a Southern Economic Corridor.

The entire region understands the implication of China’s success in advancing into Southeast Asia and Central Asia by different economic means. It is important to note that China has managed well not only through bilateral economic cooperation but also by initiating or participating in multilateral economic mechanisms.

By the same token, the region has also observed the rapid decline of US influence in all related policy areas. Especially on various joint statements announced by regional countries on occasions of regional multilateral forums, China postures itself with more confidence and a much firmer position in initiating new cooperative proposals and leading the ways of regional cooperation.

In effect, regional economic and political interdependence between China and ASEAN countries is blossoming, though the degree of ASEAN dependence on China is accelerating, especially for those members of GMS. Through various development projects of GMS, China is quickly developing solid connections and networking with its partners.

How substantial is China's influence over its GMS partners? What would be the rationale for China's enthusiasm for sub-regional cooperation? How can one understand the right direction of China's policy intention? The overall policy strategy, which China has taken for the past decade, emphasizes reshaping a peaceful image and helpful attitude of accommodation toward its neighbors. Thus the settlement of border disputes with its neighbors came up as the top priority on Beijing's foreign policy agenda.

On economic cooperation and foreign aid, as China's economy booms, the central government launches "cross-border economic zone" initiatives toward its southern neighbors and encourages provincial governments to utilize all possible resources to deepen interaction and communication with its neighbors.

Currently, all related economic initiatives toward Southeast Asia can be summarized into three general forms: China-ASEAN Free Trade Area on the strategic level, cross-border economic corridors, and the Beibu Gulf Rim economic sphere based on sea transport networking among coastal countries of the South China Sea. In a nutshell, what Chinese sub-regional initiatives have brought forward is paving the way for China-ASEAN cooperation. With such high-profile national investment in facilitating cross-border relations, ASEAN countries have already heightened the degree of dependency upon China’s economic and political development.

While many observers are worrying about not paying enough attention to catching up to China’s new efforts in the region, they have discovered that the United States does not have much to do apart from existing bilateral security cooperation.

Although China's continuous advance into the region does not necessarily mean that the United States' substantial role has been replaced, experts in the region have commonly concurred that US influence is seriously declining. To say the least, US policy toward Asia is not keeping pace with the new dynamics of regional economic integration that has been spearheaded by China’s economic advancement in the region.

What Asian countries need for substantial economic cooperation initiatives does not seem to be reflected in Washington's Asian policy orientation now. In the region’s important juncture of historical development, we may begin witnessing a new structure of regional cooperation shaping up in Asia without a strong US presence.

In the past few years, China's policy toward Southeast Asia has noticeably been thriving. The preparation for CAFTA to take effect is progressing steadily. Through several sub-regional economic cooperation mechanisms, the relationship between China and ASEAN is much closer than readily observed. The environmental and social impact of the GMS development projects is, however, creating a backlash in regional communities, and this may serve as a great challenge to China, as demand for the implementation of those projects increases.

The general direction of the Vientiane Plan of Action for GMS Development for 2008-2012 indicates that in addition to accelerating substantial progress of nine sectors, much of GMS resources will be injected to strengthen the institutional framework and mechanism to push cooperation forward.

Meanwhile, China is also very keen on initiating new sub-regional economic cooperation, such as with the "two corridors and one ring" plan. Although the cross-border economic cooperation initiatives mostly benefit the border provinces, it represents China's endeavors to explore economic, diplomatic, and security interests in the region. Based on Beijing's grand strategy, the new sub-regional economic cooperation implies more than its provincial economic development zone. China is trying to utilize its strategic location to extend its influence in economic development for broader market access in Southeast Asia.

The fundamental idea of the Beibu Gulf Rim economic cooperation and the like reflects China’s geopolitical and geo-economic deliberation via economic rather than political means. CAFTA opens up bilateral framework for cooperation on the strategic level. The GMS and other sub-regional frameworks facilitate the progress of bilateral cooperation from the grassroots level.

More importantly, the region of the GMS for years has been China's geopolitical constituency. What China expects to gain is through the process of economic cooperation: first, trying to convey a deliberate message to the region that the rise of China will be peaceful; second, bringing about economic development in its southern provinces; and third, making Kunming a regional operations center for trade and transport. In sum, China’s active role in the GMS projects its strategic vision of a strengthening relationship with ASEAN.

Notes
1. "GMS Flagship Initiative: North-South Economic Corridor," Asian Development Bank, June 26, 2005.
2. "Country Report on China's Participation in Greater Mekong Subregion Cooperation," National Development And Reform Commission,PRC, Ministry of Foreign Affairs,PRC, Ministry of Finance, PRC, 2008-03-28.
3. "China-Vietnam 'two corridors and one ring" with great potential," Nan Boa Woan, March 22, 2005.

Fu-Kuo Liu, PhD, is a research fellow, Institute of International Relations, National Chengchi University. He was 2006-2007 visiting fellow at the Center for Northeast Asian Policy Studies, the Brookings. His research works focuses on regional security, the United States policy in Asia and regionalism in Asia.

(This article first appeared in The Jamestown Foundation. Used with permission.)

(Copyright 2008 The Jamestown Foundation.)

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