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China's EconomyAs China’s economy and political influence grows so does its impact on neighbouring South-East Asian countries. These countries are central to China’s foreign policy due to both cultural ties and possible economic benefits. China’s influence began to grow exponentially after it joined the World Trade Organization (WTO) in 2011.

The ASEAN-China Agreement

China’s development benefits the rest of South-East Asia in many ways. Its remarkable economic growth benefitted businesses in nearby countries. China’s market today is the second largest in the world, which has caught the attention of both the US and nearby nations. Noticing its growth, South-East Asian countries strengthened their trade relations with China via the ASEAN-China agreement, in 1991. As a method of improving and strengthening relations, both parties established the ASEAN-China Cooperation Fund. Such economic agreements brought along peace maintenance assurances.

Trade Relationships

The growth of China’s own economy also indirectly benefits neighbouring economies. The more the manufacturing sector in China grows the more it depends on imports to supply its factories. Therefore, important economies such as Japan, South Korea, Taiwan, Thailand, Singapore, Malaysia, Indonesia, Philippines and India are all running trade surpluses with China. Countries like Taiwan, Korea and Japan are now relying on China to bolster their production lines as they moved their labor-intensive industries to China which allows them easier access to international competition. It is in the neighbouring countries’ interests to allow China’s economy to grow further as it is now their main exporting location.

A Political Partner

Additionally, China’s development offers political stability and security to the rest of South-East Asia. Similar to their economic relations, China and the ASEAN countries also established the ASEAN-China Senior Officials Political Consultation to focus on politics and security. As a way of ensuring peace and political stability, China ensures that it supports its neighboring countries to reach their fullest potential. China provides assistance for developing countries such as Laos, Burma and Cambodia through funding construction of power plants and regional grid interconnection.

The International Railway

On top of that, China’s economy benefits the rest of South-East Asia due to its dedication to building a railway that connects the whole of South-East Asia. This has been long planned, however, without Japan’s support it seemed impossible. Now that China is able to fund those plans without Japan’s support, construction has begun in the north of Thailand. China’s influence not only in Thailand but in the whole of the region is foreseen through its plans of building a 3000km railway that goes from the north of Thailand, to Malaysia, and all the way to Singapore This railway would mean development for the whole region and for China itself. It may allow it to seize more control of the South China Sea in exchange for the economic development the railway will bring. The railway’s endpoint is extremely strategic due to the fact that the Strait of Malacca is located in Singapore, the pathway for oil from the Middle East to East Asia.

– Njoud Mashouka
Photo: Flickr