China: ASEAN?'s friend or foe?<\/p>\n
William Foreman, Vientiane\/Associated Press<\/p>\n
China would seem to be a scary neighbor for Southeast Asian
\nnations, with its roaring economy that's vacuuming up vital jobs
\nand foreign investment from the region.<\/p>\n
But leaders of the Association of Southeast Asian Nations
\n(ASEAN) were shelving some of their anxieties about China's
\ngrowing economic power and seeking closer ties with the behemoth
\nduring their annual summit opening on Monday in the Laotian
\ncapital.<\/p>\n
Judging whether China is the region's friend or foe isn't so
\neasy. The Communist giant to the north is rapidly beefing its
\nmilitary with weapons that could be used to resolve simmering
\nterritorial disputes with Vietnam and others in the South China
\nSea.<\/p>\n
However, Chinese have become big spenders and investors in
\nSoutheast Asia. They're also aid donors who rarely publicly
\ncriticize troubled countries like Myanmar and Cambodia that are
\nostracized by much of the world.<\/p>\n
The 10 countries of ASEAN planned to adopt agreements with
\nChina to create the world's biggest free trade area by 2010 - a
\nUS$2.4 trillion market of nearly 2 billion people.<\/p>\n
Parts of the pact to be signed on Monday would begin cutting
\ntariffs on goods by mid-2005 and create a system for resolving
\ntrade disputes.<\/p>\n
Some ASEAN nations and companies are worried the agreement
\nwill overwhelm them, said June Teufel Dreyer, a political science
\nprofessor at the University of Miami in the United States.<\/p>\n
\"Many Southeast Asian states are worried about the advantage
\nit will give big Chinese banks, big Chinese appliance
\nmanufacturers,\" Dreyer said.<\/p>\n
Southeast Asian officials at the summit said their only option
\nis closer ties with China.<\/p>\n
\"Whether we like it or not, we've got to trade with China,\"
\nsaid Winichai Chaemchaeng, director general of Thailand's Trade
\nNegotiation Department.<\/p>\n
Ong Keng Yong, ASEAN's secretary-general, denied there was any
\nanxiety about China within ASEAN. The region must work harder to
\nattract investors and adapt to the new competition from China, he
\nsaid.<\/p>\n
\"They'll always be there, Chinese imports, Chinese exports,
\nChinese businessmen, Chinese investors,\" Ong said. \"Just like we
\nhave a lot of Japanese, American or European investors.\"<\/p>\n
Ong said the ASEAN-China free trade agreements would help make
\nthe market fairer.<\/p>\n
\"We will try our best to avoid any of the ugliness or the
\nrigors of fierce competition,\" he said.<\/p>\n
Southeast Asia has benefited from China's ravenous appetite
\nfor raw materials. The Chinese are running a trade deficit with
\nthe region - China's fourth biggest source of imports.<\/p>\n
ASEAN exports to China last year increased nearly 52 percent
\nto $47.3 billion from the previous year, the group said. Chinese
\nexports to ASEAN last year climbed 31 percent to $31 billion
\ncompared to 2002.<\/p>\n
Chinese Vice Foreign Minister Wu Dawei said China's trade with
\nASEAN would surpass $100 billion this year, and this \"offers an
\nopportunity to development in the region and to our neighboring
\ncountries instead of a challenge.\"<\/p>\n
But there's a downside for ASEAN. Investment dollars that
\ncould go to the region are flooding into China. The country
\nsucked in $392 billion in net foreign direct investment from
\n1994-2003, while ASEAN attracted $147 billion, according to
\nMorgan Stanley.<\/p>\n
\"China is a magnet for foreign investors, in many ways
\nunbeatable as a manufacturing outlet,\" Indonesian President
\nSusilo Bambang Yudhoyono said at the conference on Sunday.<\/p>\n
Dan Lynch, an international relations professor at University
\nof Southern California, said the elite ASEAN nations and
\ncompanies will benefit from the trade agreement with China but
\nthe average farmer and worker in the region likely won't.<\/p>\n
Unemployment will worsen and wages will drop as they try to
\ncompete with China, with its huge labor market and hidden state
\nsubsidies, he said.<\/p>\n
But Lynch said the biggest problem facing Southeast Asia is
\nthat China's success removes the incentive for ASEAN elites to
\npursue substantive democratization.<\/p>\n
\"The winds of democratic change blew invigoratingly throughout
\nmuch of Southeast Asia in the late 1990s, partly because of
\nWestern pressure,\" Lynch said. \"But today, the region's business
\nand political elites ask, 'Why bother? No one pressures China to
\ndemocratize, so why should we?\"'<\/p>",
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