China’s infrastructure grip on Southeast Asia tightens

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The agreement signed these days to start the first phase of a new high-speed railway as part of the connection between Bangkok and Thailand’s Eastern Seaboard region with China’s southern hub of Kunming is just another step of China’s hegemonic infrastructure push in the region. 

Mostly state-related Chinese companies are increasingly targeting infrastructure investment in a region which needs a massive upgrade of roads, railways and ports if they are to unfold their economic potential and where regional government lack the expertise, competence and funding to do that on their own part.

The Asian Development Bank estimates that emerging economies across Asia will need to invest as much as $26 trillion into building everything from transport networks to clean water supply through 2030 to maintain growth, eradicate poverty and offset climate change.

Here, China takes over a sizeable part of the work. While in the beginning, the share of Chinese foreign direct investment {FDI} into Southeast Asia remained relatively small, Chinese corporations in the recent past have taken up larger stakes in major infrastructure projects across the region, Bloomberg notes.

China accounted for 14 per cent of net FDI inflows into Thailand last year, eight per cent in Vietnam and Indonesia and 6 per cent in Malaysia, according to ANZ Bank analysts. The Philippines received a marginal share of 0.14 per cent.

By sector, the bulk of Chinese investments has gone into energy, transport and real estate, ANZ noted. The three sectors accounted for 78 per cent of China’s cumulative investment and construction contracts in Southeast Asia from 2005 to the first half of 2017.

While the development of better and more infrastructure in Southeast Asia is widely seen as a positive point, critics note that the grip of China is growing in an unbalanced way given that Southeast Asia is already heavily exposed to China via trade and tourism flows, ANZ analyst Weiwen Ng remarked to Bloomberg.

 

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The agreement signed these days to start the first phase of a new high-speed railway as part of the connection between Bangkok and Thailand's Eastern Seaboard region with China’s southern hub of Kunming is just another step of China's hegemonic infrastructure push in the region.  Mostly state-related Chinese companies are increasingly targeting infrastructure investment in a region which needs a massive upgrade of roads, railways and ports if they are to unfold their economic potential and where regional government lack the expertise, competence and funding to do that on their own part. The Asian Development Bank estimates that emerging economies...

Reading Time: 2 minutes

The agreement signed these days to start the first phase of a new high-speed railway as part of the connection between Bangkok and Thailand’s Eastern Seaboard region with China’s southern hub of Kunming is just another step of China’s hegemonic infrastructure push in the region. 

Mostly state-related Chinese companies are increasingly targeting infrastructure investment in a region which needs a massive upgrade of roads, railways and ports if they are to unfold their economic potential and where regional government lack the expertise, competence and funding to do that on their own part.

The Asian Development Bank estimates that emerging economies across Asia will need to invest as much as $26 trillion into building everything from transport networks to clean water supply through 2030 to maintain growth, eradicate poverty and offset climate change.

Here, China takes over a sizeable part of the work. While in the beginning, the share of Chinese foreign direct investment {FDI} into Southeast Asia remained relatively small, Chinese corporations in the recent past have taken up larger stakes in major infrastructure projects across the region, Bloomberg notes.

China accounted for 14 per cent of net FDI inflows into Thailand last year, eight per cent in Vietnam and Indonesia and 6 per cent in Malaysia, according to ANZ Bank analysts. The Philippines received a marginal share of 0.14 per cent.

By sector, the bulk of Chinese investments has gone into energy, transport and real estate, ANZ noted. The three sectors accounted for 78 per cent of China’s cumulative investment and construction contracts in Southeast Asia from 2005 to the first half of 2017.

While the development of better and more infrastructure in Southeast Asia is widely seen as a positive point, critics note that the grip of China is growing in an unbalanced way given that Southeast Asia is already heavily exposed to China via trade and tourism flows, ANZ analyst Weiwen Ng remarked to Bloomberg.

 

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