The global financial crisis is proving a boon for a resurgent China, which is
poised to exert ever greater influence in Southeast Asia.
While drawing neighboring countries back into China's economic orbit has been
part of Beijing's strategy for restoring what it sees as the country's rightful
place on the global stage, recent months of recession have furnished Beijing
with new opportunities to further its leadership ambitions in the region.
After the political turmoil in Thailand led to the cancellation of an
Association of Southeast Asian Nations (ASEAN) summit aimed at tackling the
global crisis in April, Beijing demonstrated its
leadership and gained political mileage when regional leaders and chief
executive officers attended the annual Boao forum in the southern Chinese
island of Hainan. The meeting this year was billed as a new "platform for
emerging economies" to cope with the economic downturn.
With the theme "Asia: Managing Beyond Crisis", the meticulously organized Boao
forum stood in stark contrast to the failed ASEAN summit in Pattaya.
"Developed economies have long dominated international media," said Long
Yongtu, the Chinese forum's secretary general. "Our aim is to offer a platform
for emerging economies to present their voices. This is particularly important
against the backdrop of the current financial crisis."
China's actions to further its leadership role in the region include a US$10
billion investment cooperation fund and an offer of $15 billion in credit to
its Southeast Asian neighbors to help them weather the current crisis. The fund
will finance infrastructure development linking China and its neighbors while
the loans will be offered as rescue packages over the next three to five years.
Chinese Premier Wen Jiabao pledged that China would take an active role in
pursuing closer economic and trade cooperation in the region. "The fate of all
nations is tied together. No one is immune from the global financial crisis and
is able to conquer it alone," he told the forum.
Wen also vowed that Beijing would encourage trade settlement in Chinese yuan
with neighboring countries to help ease foreign-exchange shortages and aid
bilateral trade and investment. Beijing has signed currency swap agreements
this year with Hong Kong, Indonesia, Malaysia and South Korea.
At the forum, Chinese economists promoted the use of the yuan as a regional
currency while at the same time blaming the toll of the global economic crisis
in Asia on the region's high degree of dependence on the US economy.
"Asia is heavily dependent on US markets partly because of the US dollar's role
as an international currency," Fan Gang, a leading Chinese economist, said at
the forum. "America's attitude in the past has always been that: 'this is our
currency, but it is your problem'. Asia, however, is now in a position to raise
demands and choose its foreign exchange reserve currencies."
Commentators in the mainland press have called on Chinese leaders to extend a
helping hand to neighboring Asian countries to achieve greater trade diversity
while using regional markets to absorb excess manufacturing capacity at home.
As many neighboring economies are undergoing a flurry of new construction
projects, investment is expected to create more employment chances for China's
workers.
"Along with the World Bank and other financial institutions, China should use
part of its enormous reserves to help developing countries with the hope of
promoting its own development and enhance its image as a responsible world
power," Ding Yifan, researcher with the Development and Research Center under
the State Council - China's cabinet - wrote in the newspaper China Daily.
Ding Yifan noted that by providing capital to the US and by buying its
government treasury bonds, China has been blamed for its "excessively" high
savings rates and for causing the credit bubble.
"It [the US] is really an unreasonable debtor," Ding wrote. "If we invest our
capital in infrastructure programs of developing countries, there will be no
such blame."
The Mekong countries have been a particular focus of attention for China. Along
with other proposals, Beijing has announced 270 million yuan (US$39.7 million)
in aid to Myanmar, Cambodia and Laos, and a donation of 300,000 tonnes of rice
to an emergency East Asia rice reserve.
"Stressing the Greater Mekong sub-region area is an important part of China's
whole periphery strategy of nurturing neighboring friendship," said Zhang
Xizhen, professor at the School of International Studies of Beijing University.
A thousand years ago, the modern Chinese province of Yunnan was the center of
the southern Silk Road, through which was transported tea, salt, spices and
medicinal herbs between China, Tibet and India. Through trade and diplomacy,
Chinese power spread deep into the Mekong region.
Today the countries that are bound by the Mekong River - Myanmar, Cambodia,
Laos, Thailand and Vietnam - offer China's southwestern regions the chance to
catch up economically with the more prosperous provinces of the country's east
coast. Yunnan province, through which the Mekong flows, and to the east Guangxi
province, which like Yunnan borders Vietnam, are being groomed for central
roles in China's plan to revive its influence in Southeast Asia.
Kunming, the capital of Yunnan, would be the Chinese terminus of two proposed
pipelines - a gas pipeline from central Myanmar, and an oil pipeline from the
Myanmar port of Sittwe, which would create a route for Middle Eastern crude and
bypass the strategically vulnerable Malacca Strait shipping route.
Guangxi, which to its east is near the economically vibrant Pearl River Delta
in neighboring Guangdong province - is focusing on increasing the seaborne
traffic through the Tonkin Gulf.
Central and local government investment will finance infrastructure in the
capital city of Nanning and along the coast - aiming to increase Guangxi's
access to Indonesia, Malaysia and the Philippines - creating a new channel for
goods to flow between southwest China and ASEAN.
Cooperation with other Mekong countries is important, not only as a way of
boosting foreign trade and development in southwest China and redressing the
country's imbalanced economic structure, but also as a diplomatic tool,
according to Zhang Xizhen.
"Through cooperation with these countries, China can set up an example of a
'win-win' partnership to prove its peaceful rise to other ASEAN members and the
world, and to counter the spread of 'China threat' theory," he said.
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