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China and Southeast Asia: Unbalanced Development in the Greater Mekong Subregion

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Trinity College Trinity College Digital Repository Faculty Scholarship 9-2013 China and Southeast Asia: Unbalanced Development in the Greater Mekong Subregion Xiangming Chen Trinity College, [email protected] Curtis Stone Follow this and additional works at: https://digitalrepository.trincoll.edu/facpub Part of the Asian Studies Commons, and the International Economics Commons China and Southeast Asia: Unbalanced Development in the Greater Mekong Subregion By Xiangming Chen & Curtis Stone Integrating with Southeast Asia is a key component of China’s multi-pronged regionalisation around its borders as its global rise continues. Below, Xiangming Chen and Curtis Stone consider the ambition of China’s ‘Go Southwest’ strategy to extend its economic interests and influence into Southeast Asia, and explore how China’s regional assertion reinforces the larger trend of new spatial configurations in light of increasing globalisation. The authors show how simultaneous globalisation and regionalisation unleashes a dual process of de-bordering and re-bordering where the traditional barrier role of borders is yielding more to that of bridges, as small, marginal, and remote border cities and towns become larger centers of trade and tourism. This article examines China’s effort to engage Southeast Asia and many of China’s footprints within and beyond the cities of the Greater Mekong Subregion (GMS). Inter-country and intra-regional trade provides the starting point for examin- ing the extent of economic integration in the GMS, and also its unbalanced development. Going Southwest In a coffee shop in central Vientiane on a hot summer day in 2012, two young Chinese businessmen from northwestern China, sipping ice-cold Latte, talked about the prospect of a new venture to explore copper in the mountains of north- ern Laos: ‘If we make $100 and they [Laotians] get $5, they should be happy’. On the outskirts of Yunnan’s capital city of Kunming, China’s fourth largest airport behind Beijing, Shanghai, and Guangzhou (also the world’s fifth largest airport in occupied area), Changshui International Airport, which is expected to have flown 38 million passengers by 2020 and 65 million by 2040,1 was opened with much Southeast Asia leaves many striking footprints within and fanfare in June 2012. While seemingly disparate, this pair of beyond the cities of the Asian Development Bank (ADB) anecdotes reveals the ambition of China’s ‘Go Southwest’ facilitated Greater Mekong Subregion (GMS), which strategy to extend its economic interests and influence into was launched in 1992 and consists of China’s Yunnan Southeast Asia. Province (with the later addition of Guangxi Zhuang Auto- Integrating with Southeast Asia is a key component of nomous Region), Cambodia, Laos, Myanmar, Thailand, China’s multi-pronged regionalisation around its borders and Vietnam. as its global rise continues.2 China’s regional assertion rein- forces a larger trend of new spatial configuration as an inher- Trade with the GMS Countries ent part of increasing globalisation driven by China. This Inter-country and intra-regional trade provides the start- simultaneous globalisation and regionalisation unleashes ing point for examining the extent of economic integration a dual process of de-bordering and re-bordering where the in the GMS as well as its unbalanced development. China's traditional barrier role of borders is yielding more to that trade with each of the GMS countries has grown since 1990, of bridges.3 As a result, once small, marginal, and remote most rapidly since 2000 (see Figure1, next page). Given the border cities and towns have become larger and lively centers size of their economies, Thailand, followed by Vietnam, led of trade, tourism, and other flows. China’s effort to engage the smaller GMS countries in trade with China. However, www.europeanfinancialreview.com 7 Global Economy Panlong District, which will serve as the Despite the overall growth of China-Southeast Asia trade, financial and commercial zone for the China exerts a disproportionately strong influence on the local presence and regional expansion GMS through a Yunnan-based and regionally oriented policy. of multinational companies. In implementing the ‘Kunming as an International Outpost’ strategy, Yunnan the total volume of China-Myanmar Unequal Power and Unba- provincial and Kunming municipal gov- trade rose by $5.9 billion from 2001 to lanced Development ernments have introduced a variety of 2011, while China-Laos trade increased Despite the overall growth of China- policies and projects. First, they are by $1.2 billion (Figure 1). Much of Southeast Asia trade, China exerts a building a central Yunnan regional China’s growing trade with Myanmar disproportionately strong influence on economic circle knitted together by and Laos occurred through cooperation the GMS through a Yunnan-based and the four cities of Kunming, Qujing, across international boundaries. The regionally oriented policy that proj- Yuxi, and Chuxiong with Kunming as role of Yunnan and its capital city of ects development consequences over the core (see Map 1).5 In May 2012, Kunming in China-GMS trade cannot the borders. Yunnan approved the establishment be understated. On May 6, 2011, China’s State of six border economic cooperation Yunnan's GDP skyrocketed from $33 Council issued the important document zones, including one around the city billion in 2000 to $160 billion in 2012, entitled ‘Supporting the Accelerated of Tengchong (see Map 1). This pro- and the province aims to double that to Construction of Yunnan as the vincial initiative augmented the central $320 billion by 2017 through even stron- Important Outpost for the Southwest government’s approval of opening three ger cross-border economic and trade Region’, which tasked the capital city border economic cooperation zones ties.4 Kunming acts as the origin and of Kunming to become the international in the cities of Ruili, Wanding (under core of economic activities that reach hub for China’s southwestern region the jurisdiction of Ruili but not con- into the bordering countries of Laos, facing the GMS. Symbolically, Yunnan’s trolled by it), and Hekou (Map 1) in Myanmar, Vietnam, and beyond. tallest building is rising in Kunming’s 1992. Ruili and Hekou became the first and second largest border ports for Figure 1. China’s Trade with Five GMS Countries, 1990-2011 Yunnan’s total foreign trade. Myanmar is Yunnan’s largest trading partner, and Ruili accounts for more than 30% 60000 of the trade with Myanmar and more than 60% of the province's trade with Myanmar.6 50000 To complement the spatial planning of new city-regions and lively border 40000 trade, Yunnan has created new institu- tional and cultural ties to the GMS coun- tries. It has recently set up commercial 30000 representative offices in Singapore and Cambodia and is planning to expand the number of Confucius Institutes and 20000 Chinese language centers already oper- ating in the GMS countries to increase Millions of U.S. Dollars in Current Prices Dollars in Current Millions of U.S. China’s soft power. It has trained a 10000 growing number of specialists who can speak Thai, Burmese, and Vietnamese. The number of international students in 0 19901991 199219931994 19951996 19971998199920002001 2002200320042005 20062007200820092010 2011 Yunnan rose from 760 in 2001 to 10,000 Cambodia 3 2 13 21 36 57 70 121 162 160 224 240 276 321 482 563 733 934 1134 944 1441 2499 in 2007 and to over 20,000 in 2011, with Laos 20 13 32 41 40 54 35 29 26 32 41 62 64 109 114 129 218 264 402 752 1085 1301 about 80% of them having come primar- 7 Myanmar 372 392 390 490 512 767 659 644 576 508 621 632 862 108011451209 14602078262529004442 6501 ily from Southeast Asia. Thailand 12401270 131813512024 33633145 35153672421666247051 8557126517342181 27723463412938195293 6473 The Myanmar border towns of Vietnam 3 32 179 400 533 10521152 14371246121824662809 3264463967428197 99491511194521043008 4020 Muse and Namhkam have done well by importing Chinese goods such as gar- Source: Data compiled from two sources.13 ments and consumer electronics, which 8 The European Financial Review August - September 2013 Map 1. Yunnan Province and Its City Circles and Connecting and Powering for Development Border Economic Zones To facilitate and scale up trade along and beyond China’s TIBET AUTONOMOUS combined long border with Myanmar, Laos, and Vietnam, REGION SICHUAN Meili Snow Mountain China has been extending its tentacles of transport infra- Taizi Snow Mountain Deqen Yibin Jinsha River Nujiang River structure to the GMS in multiple directions (see Map 2 on Gongshan Zhongdian Xichang next page). China has reached an agreement with Myanmar Yulong Snow Mountain Jinsha River Weixi 5596 Ninglang Zhaotong to construct a rail link between Myanmar's Chinese border Fugong Bijie Myanmar Biluo Snow Mountain Lijiang Yalong River 4376Jinchuan and its western coast. The railroad will run from the Shan Heqing Lanping Liupanshui Gangland Panzhihua State’s border town of Muse and span 800 kilometres across Pianma Liuku Yongren Xuanwei Anshun Erhai LakeBinchuan Dongchuan District the country to Rakhine State's port city of Kyaukphyu on Niulon River Gaoligong Mountain Dali Yuanmou GUIZHOU 3374 Qujing the Bay of Bengal. The whole project is projected to take Baoshan Yingjiang Tengehong Kunming Chuxiong Luliang Xingyi five years and is estimated to cost about $20 billion, and Anning Dianchi River Luxi Ailao Mountain Shilin LongchuanWanding River GUANGXI ZHUANG it will be borne
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