11/29/2004, 00.00
CHINA - ASEAN - LAOS
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China on the march in South-East Asia

With ASEAN deal Beijing expands its influence in the region.

Vientiane (AsiaNews/Agencies) – China is strengthening its economic role in South-East Asia. Not satisfied of weakening US power in Latin America at the last APEC summit, Beijing is now signing important trade deals at the summit of the Association of South-East Asian Nations (ASEAN) now underway in Vientiane (Laos). It is increasing its own influence in a region once dominated by the US and Japan.

But for some observers, these trade deals are potentially harmful to workers in ASEAN countries and to democratisation efforts in both the ASEAN region and China itself.

The goal of accords signed by the ten ASEAN members (Brunei, Cambodia, Laos, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and China is to create by 2010 the largest free trade area worth over US$ 2 trillion with nearly 2 billion people.

But the relationship between the two parties remains ambiguous. On the one hand, ASEAN countries remain weary of China because of the possibility that the Communist giant might intervene militarily to solve territorial questions. On the other, China has become ASEAN's largest source of foreign investment. "Whether we like it or not, we have to trade with China," said Winichai Chaemchaeng, director general of Thailand's Trade Negotiation Department.

The ASEAN-China pact will be signed today at a meeting of ASEAN leaders and those of the association's partners such as China.

The pact is not limited to economic questions but covers security, politics, technology, medicine and transportation.

In signing the plan of action, China secures a steady supply of oil and raw materials from Southeast Asia to feed its booming economy. Linking up with ASEAN also helps Beijing further isolate Taiwan: in the final declaration ASEAN foreign ministers accept the 'One China' principle.

The plan calls for cooperation in military training, agreements on cyber security, tourism promotion and the creation of early-warning systems for illnesses like SARS, AIDS and bird flu.

It also wants to improve transportation links between the countries of the region (a highway between Bangkok, Thailand, and the south-western Chinese city of Kunming should be completed by 2007)

Chinese Deputy Foreign Minister Wu Dawei said trade with ASEAN would surpass US$ 100 billion this year. "China's development offers an opportunity for development in the region, instead of a challenge," he said.

But some analysts warn of a downside. According to Dan Lynch, an international relations professor at University of Southern California, ASEAN countries and companies would benefit from the trade agreement with China, but the average worker would not. Unemployment could worsen and wages drop as they tried to compete with China, with its huge labour market and hidden state subsidies.

Professor Lynch added that the biggest problem facing South-East Asia was that China's success removed the incentive of ASEAN elites to pursue substantive democratisation. "The winds of democratic change blew invigoratingly throughout much of South-East Asia in the late 1990s, partly because of western pressure," he said. "But today, the region's business and political elites ask: 'Why bother? No one pressures China to democratise, so why should we?'" (MA)

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