Trust and mistrust

Updated On: Dec 12, 2007

Increased trade and investment have traditionally been associated with increasing likelihood of peace and prosperity.

However, in the case of East Asia, the picture looks more complicated.

Chinese investments into the region have been increasing. China's Commerce Ministry predicted foreign investment by Chinese enterprises would likely exceed US$20.9 billion (Bt707 billion) this year, up at least 30 per cent from 2006. The Nation compiled a series of reports from Deutsche Presse-Agentur indicating the rising amount of Chinese investments in the less developed ASEAN economies.

In CambodiaChina was the largest foreign investor in 2006, with $763 million in investment approvals, almost doubling its 2005 total. In Laos between 2001 and this August 2007, China was the second largest foreign investor (in approved investment terms) after Thailand, with $1.1 billion. In Vietnam, Chinese investment skyrocketed from $66 million in 2005 to $312 million in 2006. Chinese investments in these countries tended to be concentrated in primary industries or energy production.

Investments in these countries have not always been plain sailing. For instance, Chinese investments in dam projects in Myanmar have been met with protests. A non-governmental organisation, the Burma Rivers Network submitted a petition to Chinese President Hu Jintao, calling the Chinese government to require the 10 Chinese companies involved in dam building in Myanmar to conduct proper social and environmental impact studies. The petition said that, ‘The dams would represent over 30 billion dollars in investment… This would be by far the biggest inflow of money to a military regime that Transparency International rates as the world's second most corrupt.’

The security picture of East Asia also looks mixed. The Council for Security Cooperation in the Asia Pacific (CSCAP) recently published a report called ‘Security Through Cooperation: Furthering AsiaPacific Multilateral Engagement’, saying that there was an urgent need ‘for much deeper multilateral cooperation and institutionalization of the dialog process’. CSCAP representative from Canada and editor of the report Brian L. Job questioned the necessity of an ASEAN country to ‘buy the most sophisticated jet fighter aircraft.’

CSCAP co-chairman Jusuf Wanandi of Indonesia told the press conference, ‘Beside Taiwan Strait, North Korea and conflicts in the southern Thailand and the southern Philippines, we must also anticipate the power relations in Northeast Asia between China, Japan and the role of the U.S. there’.

While the security situation in Northeast Asia seems to be primarily related to inter-state relations e.g. in the Korean peninsular, Sino-US relations, the security threats in Southeast Asia seem to be primarily intra-state problems such as the insurgencies in Southern Thailand and Southern Philippines. One of the few exceptions is the situation in the South China Sea.

This week, several hundred Vietnamese protestors demonstrated outside the Chinese embassy in Hanoi, against the Chinese legislature’s recent ratification of a plan to create a symbolic administrative region called Sansha to manage three archipelagos, including the Paracels and the Spratlys. The demonstrators chanted ‘Down with China!’ and ‘Long Live Vietnam!’  (10 December 2007)


Activists petition China to regulate dam projects in Burma (Nation, 9 December 2007)

Hundreds In Vietnam Protest China Claims On S China Sea Lands (Dow Jones, 9 December 2007)

Vietnamese hold rare demonstration to protest China's move to control disputed islands (Associated Press, 9 December 2007)

Atmosphere of mistrust around Asia Pacific: Report (Jakarta Post, 8 December 2007)

Chinese investment pouring into Thailand's neighbours (The Nation, 4 December 2007)