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Chasing Competitiveness: China's investments in Southeast Asia

  • 27 Sep 2017

    Dr. Aravind Yelery | Asst. Director & Associate Fellow

    Venue: ICS Seminar Room, 27 September 2017
    Time: 3:00 PM

Thanks to China’s connectivity strategies, the context of its engagement with Southeast Asian countries has undergone drastic changes. China’s ability to project common growth and inter-connectivity through maritime lines has increasingly created new spaces between two sides. This connectivity or the launch of maritime-centered projects draws worries from many Southeast Asian countries. It is not strange that despite having sizeable migrant and overseas Chinese population, the Southeast Asian countries, in varying degrees, continued welcoming non-Chinese presence in the region. Strategically, China does not want to see an anti-China coalition in the region, especially the US-led coalition. Not only has the US military maintained close diplomatic and political relations with Thailand, Singapore and Indonesia but economic engagement of non-Chinese states in the region is sizeable and in the wake of China’s slowing growth, this may further trigger China’s worries about losing Southeast Asia. As the beneficiaries and major promoters of economic globalization, China can benefit greatly from a prosperous Southeast Asia but the statistics show a different picture. Since 2009 and until June 2016, cross-border trade between China and ASEAN countries reached 1.12 trillion yuan. Currency swap agreements total 1.4 trillion yuan. Clearly, the potential is huge but as per a study by Wharton, the majority of the production chains are not controlled by Chinese firms but by Japanese, South Korean, EU and US firms that own and profit from the intellectual property that oils these chains. This indicates that aggregate visible trade statistics are only one measure and likely not the best measure to evaluate China's economic integration with and importance for the Southeast Asian economies. In the case of Thailand and China ties, the situation is not different from the other countries of the region. For example, Thailand carried the tag of ''Detroit of the East" but Chinese companies have lost the automobile sector to non-Chinese companies. Toyota leads in this not only with production bases but also substantial investment in R&D. The modus operandi of Chinese companies in Thailand and eventually along the Mekong sub-region needs more serious up-gradation. While connectivity projects have helped China to upgrade its engagement with the region. It is evident that consumables and tourist numbers alone will not help China to develop long-term sustainable economic relations with Southeast Asia.

About the Speaker – 

Aravind Yelery is Assistant Director and Associate Fellow at the Institute for Chinese Studies, Delhi. Previously, he was associated with Shanghai Ji-Ou (Sino-European Commerce Ltd.) as a Sr. Corporate Consultant (Research). He holds a PhD in Chinese Studies from the School of International Studies, Jawaharlal Nehru University, New Delhi. Yelery’s research interests include China’s foreign policy,

Chinese business, Chinese manufacturing trends, urbanization and Chinese government and politics. He has recently submitted an Indian Council of Social Sciences Research-sponsored research project on WTO, anti-dumping and China’s market economy status. He has been actively involved in conducting workshops on doing business in China and conceptualizing immersion programmes for Indian executives in China. He contributes on China-related issues in a number of Indian newspapers.

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