Category Archives: ASEAN

by | November 17, 2014 · 11:49 am

China’s Maritime Silk Road is all about Africa

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Rice bound for Africa is loaded onto a cargo ship in Bangkok, Thailand

A recently signed agreement between China and Thailand sheds light on the dynamics of the Maritime Silk Road.

Amid all the fanfare and media buzz about China’s re-envisioning of its two Silk Road projects, the New Silk Road and the Maritime Silk Road, admittedly little is known about the details, the mechanics, and the functions of the new routes.  For example, this interactive graphic published by Xinhua suggests the Maritime Silk Road’s prime focus is to facilitate trade between Asia and Europe when in actuality the focus of the Maritime Silk Road is to support and facilitate booming trade growth between Asia and Africa.  To put this into perspective, from 2011 to 2013, trade between China and the EU showed no increase, keeping steady at around USD 530bn.  This was outpaced by trade growth between China and Africa which expanded at an average of 10% per year over the same period of time and is projected to increase 15-20% per year over the next five years.  In 2013 total trade between China and Africa reached USD 210bn – five years ago China’s total trade with Africa was less than half of what it is now. Continue reading →

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Filed under ASEAN, China, Current Events, Foreign policy, GMS, Regional Relations, SLIDER, Thailand, Trade, Yunnan Province

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by | November 5, 2014 · 4:28 pm

A Different Global Power: Understanding China’s Rise in the Developing World

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By Xiangming Chen and Ivan Su

China is now the largest trading nation in the world with strong ties to Africa, Latin and America and the Middle East. This once impoverished and isolated nation has lifted several hundred millions of its own people out of poverty and is now reshaping the developing world. This article looks at China’s involvement in four developing regions to assess China’s influence as a rising global power.

The China where the first author grew up through college in the early 1980s was the largest and one of the poorest developing countries. The China where the second author left to attend high school in the United States was about to pass Japan to become the world’s second largest economy, in 2010. Over the past three decades, China has lifted over 500 million of its people out of poverty. Globally, China has just surpassed the United States to become the largest trading nation in the world and is expected to soon overtake the latter as the world’s largest economy (in terms of purchasing power parity or PPP). More importantly regarding the focus of this essay, China is now the largest trader and investor in Africa, with its footprints spreading and seeping into all corners of the developing world.

How did the once impoverished and isolated “Third World” country become a powerful force in shaping a new developing world in the 21st century? What are the positive vs. negative consequences of China’s inroads into developing countries by exporting its urbanism to Africa, for example? These questions highlight China’s global impact that matters a great deal to the everyday life of millions of poor people in developing countries. In this essay, following China’s global footprints in four developing regions, we offer a broad comparison of both the different and consistent economic impacts of China within and across these regions.1 Figure 1 shows China’s investment in energy and infrastructure in the four regions, while Figure 2 breaks China’s investment into four specific sectors of one major country in each of the four regions. Guided by these comparative data and focusing on four developing regions, we present a broad picture of China’s widespread but mixed role in developing countries, thus offering a preliminary assessment of whether China’s influence as a rising global power may differ from the traditional or established Western powers in how they approach the developing world.

 

China in Asia: Exerting Neighboring Influences

Back in the last decades of the 20th century, the drivers and role models for development in Asia and beyond were the “Four Tigers”: Hong Kong, Singapore, South Korea, and Taiwan. The onset of the 21st century began to position China toward the epicentre of the Asian economy, with its influence spreading across the continent through more trade, outward investment, and other outgoing initiatives such as cross-border infrastructure development.

In Southeast Asia, China has been trying to integrate with the Greater Mekong Subregion (GMS), which consists of China’s Yunnan Province, Guangxi Autonomous Region, Cambodia, Laos, Myanmar, Thailand and Vietnam. “China’s trade with each of the GMS countries has grown since 1990, most rapidly since 2000.”2 In addition to increasing trade, China exerts strong influence on the GMS through various development projects. In Myanmar, China has reached a $20 billion agreement to construct an 800-kilometre rail link between Myanmar’s Chinese border and its western coast.3 In addition to investing in infrastructure, China is also helping its neighbors to generate energy. Since 2005, China has invested over $87 billion in the energy sector across Asia, and about one quarter of these investments went to Malaysia. In 2010, an $11 billion energy deal signed between China’s State Grid Corporation and Malaysia Development Company included four hydroelectric mega-dams that are capable of generating up to 28,000 megawatts of power, an aluminum-smelting plant, exploitation of coal mines containing 1.5 billion metric tons of coal, and a 40 billion-cubic-feet natural gas development project. “With Malaysia reeling from an exodus of capital over the past two years, the projects have strong support at the state and federal levels. Officials hope the plan will attract foreign investment to the region.”4

China’s investment in Asia is not limited to Southeast Asia, as countries in South and Central Asia have also been affected by China’s direct investment. In 2013, China established a strong foothold in South Asia when it took over the upgrading and operation of Pakistan’s Gwadar Port from Singapore. The Gwadar project serves China’s “Go West” policy while allowing Pakistan to “look east.” China is building a road from Gwadar all the way north to Kashgar, the westernmost large city in Xinjiang. At the same time, Pakistan and China have also planned to connect the port via the Indus Highway, which will provide China with a land-based supply of oil from Central Asia. Given Gwadar’s geographical location, Gwadar cuts China’s distance from the Persian Gulf, from which China gets 60% of its oil, by thousands of kilometres.5

Compared to the other energy projects sponsored by China, the Central Asian vector of China’s energy policy has become more important due to the region’s abundance of oil and natural gas. While China sees Kazakhstan’s energy supply a key to its “Go West” program, Kazakhstan has used Sino-Kazakh cooperation to balance against Russia’s influence in its energy sector. China is also constructing a 1,800-kilometre natural gas pipeline from one of the world’s largest natural gas exporter, Turkmenistan, which benefits from doubling its energy supply to China and circumventing its biggest competitor – Russia. Beijing wins by securing new gas supplies and thus enlarging its already hefty investment in energy projects in Asia (see Figure 1).

 

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China in Africa: Reaching Maximum Impact

Through increasing trade and investment, China’s growing presence has reshaped the landscape in Africa. While negligible two decades ago, China-Africa trade reached $200 billion in 2013, which makes China Africa’s largest trading partner today. With only limited investment in Africa before the 2000s, China’s cumulative investment in Africa exceeded $150 billion by the beginning of 2014. Of these investments, close to $100 billion has gone into energy and infrastructure projects.6

China’s unprecedented economic growth requires an increasing amount of oil to sustain it. In 2012, close to one-third of China’s total oil imports came from Africa, and China is looking to expand its energy presence in Africa. Nigeria has received the most Chinese direct investment over the past decade. While many Western energy firms are reluctant, China reached a $10 billion hydrocarbon deal with Nigeria at the beginning of 2014 (see Photo 1). In addition to exploiting crude oil and natural gas, China has been involved in constructing an additional refinery in Baro, Nigeria.7 Although critics have attributed China’s heavy footprint in Africa’s energy sector to its energy and resource demand back home, evidence suggests otherwise. China Africa Sunlight Energy Ltd. recently invested $2.1 billion in developing a 2,100-megawatt plant to help ease electricity shortages in Zimbabwe, which is only capable of generating 1,320 megawatts against a demand of 2,200 megawatts of electricity. “China Africa Sunlight Energy is looking at the possibility of pumping gas to the port city of Beira in neighbouring Mozambique, using an idle pipeline that the National Oil Co. of Zimbabwe once used to bring fuel into the country.”8 This power plant is expected to produce 300 megawatts by mid-2015, and the number is looking to double by the end of the year. While much of the media attention has focused on China’s investment in Africa’s energy sector, China is reshaping Africa’s landscape through large-scale infrastructure development.

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Photo 1: Drilling Oil in Nigeria

Since 2005, China has invested more in Africa’s infrastructure than in any other part of the developing world. More than $44 billion has been spent to build roads, airports, and housing that are essential to the continent’s economic development. In Angola, China is helping the country’s reconstruction effort after the devastating civil war. One of China’s major investments in Angola is the rebuilding of the Benguela Railway, “an 840-mile transcontinental railway that links the Atlantic port of Lobito in Angola with rail networks in the Democratic Republic of Congo and Zambia. The project is expected to cost $300 million, and it will provide a much-needed cheap outlet for Congolese and Zambia copper, tin and coltan.”9 In Nigeria, China is helping to build Africa’s largest free trade zone in its commercial capital, Lagos. “A total of 16,500 hectares of land bordered by the Atlantic Ocean and the Lagos and Lekki lagoons has been earmarked for the whole free zone, which will include a deep-water sea port and a new international airport in close proximity.”10 The Lekki Free Trade Zone is aiming to cut down the country’s reliance on imports, and it will cost $5 billion to complete the first phrase of the project, which will cover 3,000 hectares of land. The construction will also include roads, power plants, and water plants. This evidence reinforces China’s substantial investment in building Africa’s infrastructure relative to the energy sector in comparison with the other developing regions (see Figure 2)

 

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However, concerns arise on whether Africa is too dependent on China as results of “high commodity prices and investment inflows.”11 With China-Africa trade looking to hit $280 billion by 2015, some worry that African economies depend too much on China. Some urge African countries to diversify their economies and decrease their dependence on China. There are also calls for China to focus more on human rights and community engagement. As such a dominant investor in some African countries including those with an authoritarian government like Zimbabwe, China struggles to balance between the return on its huge investment, helping local development and living up to international norms of engagement.

 

China in Latin America: Extending the Reach

Ever since the 1960s, China has been providing limited development assistance to a small number of Latin American countries such as Chile. Fast-forward to the 21st century, China has considerably expanded its economic ties with Latin America through greater trade and more diverse investment.

“Trade between China and Latin American countries has grown exponentially over the past decade. Although Sino-Latin American trade continues to remain a relatively small share of their respective global trade, growth has exceeded many expectations. From 2000 to 2009, annual trade between China and Latin American countries grew more than 1,200%, from $10 billion to $130 billion, according to the United Nations statistics.”12 In 2012, Latin America accounted for 13% of China’s total outbound investment – about $11.4 billion, a significant increase from the $120 million of 2004.

Like in Asia and Africa, China has favored the energy sector in Latin America (see Figure 1), targeting Venezuela for its oil and Brazil for its hydropower. Of China’s $100 billion investment in Latin America since 2005, more than half has been energy and infrastructure related. In 2010, China’s State Grid announced a $1 billion buyout of seven Brazilian power transmission companies. Two years later, in 2012, China’s State Grid was chosen by the Brazilian government to build a $440 million power-transmission project. And at the end of 2013, China’s State Grid led a group to win the rights building a $21 billion hydropower plant in Brazil. Set to become the world’s third-largest hydropower plant and take around 46 months to complete, it will also create a 2,092 km hydropower transmission line and two energy converter stations that will be able to take energy from the State of Pará, along the Xingu River in the Amazon Basin, to Brazil’s Southeast region, with a planned capacity of 11,233 megawatts. Brazil’s economic acceleration in the past decade led to a surge in the country’s energy demand. Given Brazil’s geographical endowment, as much as 80% of its total energy comes from hydropower generation.13 With power generation operating close to the limit, Brazil is urgently constructing more power plants using the Amazon’s abundant hydro resources and transmitting it to its Southeast region, especially Rio de Janeiro where much more energy is needed in light of the upcoming World Cup and Summer Olympics in 2016. To do so, Brazil has turned to China for its expertise and experience in building long-distance power transmission towers or the so-called electricity pylons (see Photo 2).

 

Photo 2: High on an Electricity Pylon in Eastern China Source: China Daily/Reuters

Photo 2: High on an Electricity Pylon in Eastern China Source: China Daily/Reuters

Besides its growing economic presence in Latin America, China has made some cultural inroads as well. Since 2012, China has opened 32 new Confucius Institutes all over Latin America, a Chinese foreign ministry deputy announced. Hotels in the region have begun to prepare for the increasing number of Chinese tourists by making the menus available in Mandarin.14 This confirms the larger trend of more Chinese tourists going to developing countries beyond Asia and advanced economies in North America and Western Europe, making China the world’s number one tourist-sending nation in 2013 with approximately 100 million overseas trips.

 

China in the Middle East: Reviving the Silk Road

Tracing what China is doing in the conventionally defined developing world has taken us to Asia, Africa and Latin America. Yet given China’s huge demand for external energy, we are not surprised at all to see China’s growing presence in the Middle East, whose energy sector ranks second behind Asia in absorbing Chinese investment (see Figure 1).

Despite China’s massive efforts to secure energy from Asia and Africa, as well as from Venezuela in Latin America, its dependency on Middle Eastern oil has risen over time. The Middle East is currently the largest exporter of crude oil to China. The share of oil imported by China from the Middle East was 48% in 1990, 49% in 2005, and 51% in 2011. It is expected that China’s crude oil imports from the Middle East will reach 70% by 2020 and continue to grow until 2035, according to the International Energy Agency. Saudi Arabia is China’s largest energy supplier with about one million barrels per day, accounting for 20% of China’s crude oil imports. Iran, another big oil supplier, contributes about 10% to China’s overall oil imports as well (see Figure 2). China has maintained a friendly relationship with both Saudi Arabia and Iran. A number of top Chinese leaders including Hu Jintao and the current president Xi Jinping have visited Saudi Arabia. And China has been dragging its feet on the UN sanctions against Iran.15 These diplomatic postures toward the Middle East conform to China’s pragmatic economic policies and interests in other energy- and commodity-rich regions such as Africa and Latin America.

But China’s interest in the Middle East does not stop with oil. “As with other regions, China has rapidly expanded its economic ties with the Middle East through trade. From 2005 to 2009, China’s total trade volume with the Middle East rose 87%, to $100 billion and reached approximately $222 billion in 2012, according to China’s official statistics. This surge pushed China to surpass the United States as the top destination for the Middle East’s exports in 2010. China’s exports to the Middle East are primarily low-cost household goods that benefit the average Middle East consumer. An example is growing numbers of Egyptians being able to afford inexpensive Chinese cars. Also, residents in the Gaza Strip suffering from the Israeli blockade depend on cheap Chinese goods in their daily lives.”16

As many African countries have done, some Middle Eastern governments have brought Chinese contractors in to work on major infrastructure projects. Egypt has also partnered with China to develop its Suez special economic zone, a development strategy that China had used itself and promoted in Africa and the least developed parts of Southeast Asia like Laos. While China has diversified its investment in the Middle East, it is much more concentrated in the energy sector than in infrastructure (Figure 1). This further establishes China’s significant dependency on the Middle East for energy resources, namely oil. However, once we factor in the non-oil related Chinese economic activities, China’s footprint in the Middle East becomes somewhat similar to the large scope of China’s economic influence in the other three developing regions, especially in several major countries where China has moved beyond energy into infrastructure and commodities (see Figures 1 and 2). In this sense, the Middle East still marks the old destination for China’s new effort to revive the ancient Silk Road through Central Asia.

 

China’s Ambitious and Uncertain Role

Judging by a sampling of evidence across the four developing regions, we characterize China’s role as very ambitious and yet uncertain. The ambitious aspect is increasingly fueled by China’s abundant surplus capital in both private and public hands that may have a stronger effect on the urban landscape and transport infrastructure of developing countries than on its quest for the latter’s energy and commodities.

On the bank of the Mekong River in Cambodia’s capital city Phnom Penh, the $700 million Diamond Island Riviera, a joint venture mixed-used development project involving a Chinese company, includes three 33-story condominium towers, a shopping mall, a hospital, an international school and two pedestrian shopping streets with signs in Mandarin. Before its scheduled completion in 2017, Chinese buyers, especially Shanghainese, are already buying the condos in cash as investment properties.17

It is again in Africa where the transport infrastructure is the poorest in the developing world that China is scaling up its investment most aggressively. On his recent four-country tour of Africa, Chinese Premier Li Keqiang committed to set aside $2 billion for an African Development Fund and promised his support for a high-speed rail network connecting African capitals. As a start, China Railway Construction Corporation made a $13.1 billion deal to build an 860-mile high-speed railway in Nigeria that would employ more than 4,000 workers during construction, and 5,000 more afterward.18 Claiming no-strings-attached, China’s ambitious effort can deviate from the precedent of Western colonial powers who had built highly limited transport infrastructure for shipping out their craved commodities from Africa. Yes it is uncertain that the Chinese will succeed where the earlier powers largely failed.

As further evidence on its ambition to build the developing world’s urban and transport infrastructure, China is funding and building Nicaragua’s lifelong dream in having its own canal since the 19th century, when it rivaled Panama for control of the waterway. In August 2013, President Daniel Ortega announced that a $40 billion contract had been signed with a Hong Kong-based Chinese company that would design a route and start construction in December 2014 and manage the canal for 50 years. Estimated to cost as much as $60 billion, an infrastructure project of this massive scale is very uncertain in terms of returning investment to China. Yet China might not be looking for a quick return on investment, but to control a trade route independent from U.S.-managed Panama.19

The uncertain aspect of China’s strong role has also run into trouble in the Middle East. Despite China’s political advantage in taking a somewhat neutral position regarding Iran under West-imposed sanctions in order to continue buying its oil, Iran’s Ministry of Oil has recently removed China from the project to develop the South Azadegan oilfield because of long delays. This puts China’s non-political or no-strings-attached approach to dealing with developing countries, especially those with an authoritarian domestic system and a precarious international status, to test or at risk.

While ambitious and already far-reaching and powerful, China’s role in reshaping the developing world will only grow and remain uncertain over time. It highlights the ongoing debate about whether China merely exploits commodity and energy resources in developing countries as the old West or truly promotes national and local development through its overseas infrastructure construction and other positive means as a new global power. This debate will not be settled for a long time as we continue to scrutinize China’s powerful role in shaping the developing world during the 21st century.

 

About the Authors

Xiangming Chen is the founding Dean and Director of the Center for Urban and Global Studies and Paul E. Raether Distinguished Professor of Global Urban Studies and Sociology at Trinity College, Connecticut, and a distinguished guest professor at Fudan University, Shanghai. He has published extensively on urbanization and globalization with a focus on China and Asia. His several books include Shanghai Rising: State Power and Local Transformations in a Global Megacity (University of Minnesota Press, 2009; Chinese Edition, 2009).

Ivan Su is currently a third-year student at Trinity College, Connecticut, majoring in Public Policy and Law and Urban Studies. His interests are situated at the intersection of city planning, city economic development, and legal studies. He speaks fluent Mandarin and Cantonese, and  carried out a field research project in the southern Chinese city of Guangzhou in summer 2014. He has been a student researcher at the Center for Urban and Global Studies at Trinity College since 2012.

References

  1. For this culminating article, we have drawn heavily from the series of articles on China and the developing world that has appeared in this magazine since the February 2013 issue. See Kayla Chen and Xiangming Chen, “China and Latin America: Connected and Competing”,The European Financial Review(February 2013): 56-58; Fakhmiddin Fazilov and Xiangming Chen, “China and Central Asia: A Significant New Energy Nexus”, The European Financial Review (April 2013): 38-43; Xiangming Chen and Curtis Stone, “China and Southeast Asia: Unbalanced Development in the Greater Mekong Subregion”, The European Financial Review (August 2013): 7-11; Xiangming Chen and Garth Myers, “China and Africa: The Crucial Urban Connection”, The European Financial Review(December 2013): 89-93; Abbᾱs Varij Kᾱzemi and Xiangming Chen, “China and the Middle East: More Than Oil”, The European Financial Review(February 2014): 40-44; and Xiangming Chen, Pallavi Banerjee, Gaurav Toor, and Ned Downie, “China and South Asia: Contention and Cooperation Between Giant Neighbours”, The European Financial Review(April 2014): 10-16.
  2. Xiangming Chen and Curtis Stone, ‘China and Southeast Asia: Unbalanced Development in the Greater Mekong Subregion’,The European Financial Review(August 2013): 7-11.
  3. Ibid.
  4. ‘Malaysia and China agree to $11 billion deal to build mines, dams in Borneo’; accessed from http://news.mongabay.com/2010/0112-sarawak.html.
  5. Xiangming Chen, Pallavi Banerjee, Gaurav Toor and Ned Downie, ‘China and South Asia: Contention and Cooperation Between Giant Neighbours’,The European Financial Review(April 2014): 10-16.
  6. Xiangming Chen and Garth Myers, ‘China and Africa: The Crucial Urban Connection’,The European Financial Review(December 2013): 89-93.
  7. John C.K. Daly, ‘China’s bold $10 Billion investment in Nigerian hydrocarbons’; accessed from http://thediplomat.com/2014/01/chinas-bold-10-billion-investment-in-nigerian-hydrocarbons.
  8. Godfrey Marawanyika, ‘China Africa Sunlight to invest $2.1 Billion in Zimbabwe Power’; accessed from http://www.bloomberg.com/news/2013-09-03/china-africa-sunlight-to-invest-2-1-billion-in-zimbabwe-power.html.
  9. Michail Vafeiadis, ‘China buying out Africa: Top five destinations of Chinese money’; accessed from http://www.csmonitor.com/World/2012/0301/China-buying-out-Africa-Top-5-destinations-of-Chinese-money.
  10. ‘Nigeria embarks on vast free trade zone with China’; accessed from http://www.reuters.com/article/2010/09/01/nigeria-china-idUSLDE67U24K20100901.
  11. Accessed from http://www.ibtimes.com/imf-worries-chinese-slowdown-could-damage-sub-saharan-economies-1576706?ft=3aj78&utm_content=xiangming.chen@trincoll.edu&utm_medium=Apr_27_2014_0401_194973&utm_source=TailoredMail&utm_term=China+Economic+Slowdown+Impacts+Reach+To+Africa&utm_campaign=Apr_27_2014_0401.
  12. Kayla Chen and Xiangming Chen, ‘China and Latin America: Connected and Competing’,The European Financial Review(February 2013): 56-58.
  13. Ze Jin, ‘China’s 21 billion investment in Brazil’s hydropower’; accessed from http://wallstreetcn.com/node/75689.
  14. ‘China’s influence in Latin America is increasing’; accessed from http://www.dw.de/chinas-influence-in-latin-america-is-increasing/a-17156409.
  15. Ibid.
  16. Ibid.
  17. Chris Horton, ‘Giant development in Cambodia hinges on Chinese buyers’,The New York Times,May 6, 2014; accessed from http://www.nytimes.com/2014/05/07/realestate/commercial/giant-development-in-cambodia-hinges-on-chinese-buyers.html?_r=1.
  18. Kathleen Caulderwood, ‘Chinese Premier Li Keqiang vows to help build a railway through Africa ‘with no strings attached’,International Business Times,May 6, 2014; accessed from http://www.ibtimes.com/chinese-premier-li-keqiang-vows-help-build-railway-through-africa-no-strings-attached-al+African+Railway+No+Longer+A+Pipe+Dream&utm_campaign=May_09_2014_0700.
  19. Patricia Rey Mallén, ‘Is the partnership between China and Latin America paying off’?International Business Times, May 8, 2014; accessed from http://www.ibtimes.com/partnership-between-china-latin-america-paying-off?

 

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by | September 22, 2014 · 10:28 am

Water release at Yunnan dam sparks SE Asian alarm

Manwan Dam, Yunnan

A huge hydroelectric facility in southern Yunnan is causing tension between China and several of its downstream Southeast Asian neighbors. The Jinghong dam (景洪大坝), which stretches across the Mekong River, is currently discharging water in an effort to lower reservoir levels, raising the specter of flash flooding further south along the riverway.

On September 1, the Chinese government informed flood control authorities in Cambodia, Laos and Thailand that the dam would begin to release large amounts of excess water. The facility partially opened its floodgates September 5, releasing 535 cubic meters of water per second. Such activity is expected to continue through the end of the month.

Although this amount of water has yet to cause flooding in Laos or Thailand, both countries have issued public warnings as a precaution. Officials in both countries fear any further increase in outflow from the dam — which has the capacity to release up to 9,000 cubic meters of water per second — could have disastrous consequences. An unnamed official in Laos told website RFA river levels in the city of Houayxay — 200 kilometers south of the Jinghong dam — had risen noticeably but had so far not approached flood levels.

Thailand, which makes up more than 800 kilometers of the country’s northern border, is currently in the grips of its annual flood season. At least 28 provinces in the country’s north are already experiencing widespread inundations. Because of this, Thai flood control authorities are particularly wary of any increased flow along the river. Channel News Asia is reporting “the situation at the Chao Phraya dam, the main water gateway between the mountainous north and the central plains [of Thailand], are at a critical level”.

Further downstream in Cambodia and Vietnam, officials appear less concerned. No flood warnings related to the Jinghong dam water release have yet been issued in either country. However, a spokesman for Cambodian water conservancy group 3S Rivers Protection Network told reporters, “We know when an upstream dam opening its gates to release reservoir water combines with the heavy rains of wet season, it’s a high threat.”

The 1,750-megawatt hydropower plant, located roughly five kilometers north of the city ofJinghong, first went into operation 2008 following more than five years of construction. Power generated at the facility is used in Yunnan but is also often sent to energy-hungry Guangzhou or exported to Thailand.

Exemplified by the current situation in Jinghong, cross-border management of the Mekong — called the Lancang River (澜沧江) while flowing through China — is often a contentious issue. Mekong countries have, in the past, expressed frustration over how the river is handled inside China. Such concerns largely revolve around the wellbeing of the 48 million people who rely directly on the waterway for their food and livelihoods in Southeast Asia.

This article was written by Patrick Scally and originally posted on GoKunming.

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Filed under ASEAN, China, Energy, Mekong River, Regional Relations, SLIDER, water, Yunnan Province

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by | February 26, 2014 · 12:00 pm

New Addition: Country Profiles on East by Southeast

ExSE is excited to announce the addition of a new section to our website!  Country profiles are now available for Cambodia, Laos, Myanmar/Burma, Thailand, and Vietnam.  These profiles introduce the historical, political, and economic milieu of countries in Southeast Asia and provide you with up to date analysis of current events and developing trends in the region.  You will find links to economic and environmental data as well as a discussion of each country’s regional connections (including the China connection!) in a greater context.

These country profiles are authored by undergraduate students enrolled in the Regional Development in China and Southeast Asia program at the IES Kunming center.  Each semester new students will have the opportunity to update, edit, or add to the existing reports so be sure to check for updates frequently.

Country reports can also be accessed via the site’s top menu bar under Profiles.

If you have suggestions, contributions, or photos to provide for the country reports, please feel free to contact us at eastbysoutheastmail@gmail.com.

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Filed under ASEAN, Cambodia, China, Current Events, Laos, Myanmar/Burma, SLIDER, Thailand, Uncategorized, Vietnam

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by | November 16, 2013 · 4:54 pm

China’s Bridgehead Strategy and Yunnan Province

Editor’s note: Liu Jinxin wrote this essay to debunk the myth that China’s bridgehead strategy is militaristic or expansionary in nature.  As a chief architect of this strategy, he seeks to demonstrate that developing Yunnan province into a bridgehead will increase international trade flows and deliver long-term regional security.  This translated essay currently guides top-level foreign policy makers in China in implementing economic strategies along its borders with Southeast Asia.  

 

Yunnan province's border crossing with Vietnam at Hekou/Lao Cai

Yunnan province’s border crossing with Vietnam at Hekou/Lao Cai

The definition of a bridgehead?

According to the Modern Chinese Dictionary, a bridgehead (桥头堡) is a military term that refers to a strategic chokepoint on the field of battle and particularly refers to a fortified structure that defends and controls a bridge or ferry crossing. In economic terms, bridgehead refers to a strategic forward position on a political or economic front line. The term bridgehead appeared for the first time in an official national level Chinese policy document called “Eastern Bridgeheads” in July 1994 which confirmed the Shandong cities of Rizhao and Lianyugang as the bridgehead terminus of the Eurasian landbridge.

In the economic research of landbridges, a bridgehead is a key concept that acts as a port and facilitates the ease of transportation. Bridgeheads are also international centers of shipping, finance, and information which together form an integrated international center of trade. From a logistical and supply chain system perspective, a bridgehead serves basic support to the Eurasian landmass. It is a city or a region that sits on a strategic position on the logistical and supply chain and serves the specific purpose of controlling the flow of resources along international trade routes. The basic characteristics of a bridgehead are its powers to control, develop, and influence.

The power to control

The power to control suggests capabilities levels of secure logistical flows. This can be understood in narrow and broad senses. From a narrow sense, secure logistical flows are conditional to the degree of market openness.  The survival and development of logistical flows must not be threatened by the power of a government to regulate or control it. From a broad sense, a state’s security and international security are guaranteed by engaging in logistical activities. The capability of a state’s secure logistic flows is determined by its capacity to control strategic resources, logistics routes, linkages, and its industrial supply chain.

Linking with the similar strategic logistic routes, resources, and supply chain structures of neighboring states, a concerted logistics system can deliver harmony and mutual trust as well as a collective security that realizes long term stability. Fostering mutual trust, mutual benefit, and equality work together to form a new worldview for security and protects the security of individual states as well as respects the security concerns of other states.  Mutual trust also promotes collective security.

 

The power to develop 

Developmental power is preconditioned by the construction of logistic routes, linkages and supply chain structures, the developmental needs of economic corridors, and mutual benefit and cooperation. This power can help states share development trajectories, share prosperity and harmonious development, and eliminate security threats at their root. States should place the promotion of shared development as the method for solving global development imbalances and fostering sustainable development. To revolutionize international financial systems, oppose trade protectionism, and promote regional economic cooperation, developing countries should establish development modes that foster interdependence, deliver effective beneficial outcomes, and seek to erase poverty. Developing countries should expand trade with each other, open markets to each other, and increase the level of south-south cooperation.

 

The power to influence

Influential capabilities rely on a state’s degree of openness and tolerance, strengthening of the construction of a national culture, making positive contributions in international cooperation, solidification of geo-cultural space, promotion of geo-cultural integration, ability to cooperate harmoniously, and mutual progress with its neighbors. States should respect the rights of other states to determining their own development paths by admitting differences in cultural traditions, social systems, and value systems. States should actively promote and provide guarantees to human rights, and increase dialogue to eliminate misunderstandings. States should initiate a spirit of openness and tolerance, make use of the development modes of other states in a comparative and competitive fashion, and seek collective development despite differences.

 

The functionality of China’s bridgeheads

The central government has required Xinjiang Uyghur Autonomous Zone, Yunnan province, and other frontier provinces and zones to open the construction bridgeheads along national borders to implement a stable and prosperous frontier region. To deliver prosperity, the bridgeheads should:

1) Be a foundation of protecting border security and stability

2) Take measures under the conditions of high technology to serve as a front line in partial wars and non-traditional security issues

3) Support efforts to rapidly develop ethnic and national zones through new economic modeling

4) Expand the promotion of international/regional cooperation with neighboring states and extend degrees of openness by forging ahead as zones of experimentation.

5) Serve as a transit and storage point for national energy resources.

From a spatial perspective, Xinjiang acts as a bridge between the East and the West; it is the new Eurasian landbridge’s thoroughfare, and as a “west gate,” it serves the opening of China’s northwest region to Central Asia and Europe.

Yunnan opens China to the Southwest connecting two oceans, the Pacific and the Indian as well as East Asia, Southeast Asia, and South Asia. It is the linkage point between China’s southwest, the Southeast Asian peninsula, and the South Asian Subcontinent, and is the starting point of the Yangtze River Delta economic zone as well as the Pearl River Delta economic zone. Yunnan acts as the core belt of the China-South Asia Economic Circle and the China-Southeast Asia economic circle. It is the main connective channel between China and the Indian Ocean and is China’s core zone in the Greater Mekong Subregion. More importantly the province serves as a key trade passageway for goods and services passing from China to South Asia and the Southeast Asian peninsula.

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Core Values

China’s bridgeheads are a result of major changes in geo-strategic international structure. The concept is part of China’s key diplomatic principles which pledge to be a good neighbor, a prosperous neighbor, and a secure neighbor. It is also reflective of China’s active pursuit of being a responsible world power. The core values of the bridgehead strategy are:

1) To foster an infrastructure development strategy that expands participation in the world market and establishes interdependence, while constructing mutually beneficial win-win relations with its neighbors

2) To highly prioritize unity among ethnic peoples and social stability by promoting cultural diversity and shared developmental progress

3) To respect  public opinion and the will of peoples in neighboring countries, and respect their value systems by promoting cooperation and exchange between peoples and democratic equality

4) To acknowledge the guidance of international voices and place equal importance on China’s international image and economic benefit

5) To safeguard the benefit of overseas Chinese and Chinese businessmen abroad

6) To value strategic resources, strategic routes, the shared security of strategic industrial supply line

7) To promote the construction of low carbon footprint urban areas and the use of clean energy by promoting an economic society that delivers harmonious, stable, and secure sustainable development

8) To promote the construction of a harmonious new world order and the active promotion of new kinds of partnerships with neighboring countries

9) To resolutely protect free and fair global trade and investment climates, and maintain the free flow of products, investment and services

10) In the long term, to promote sustainable growth, coordinated concerns, advocate tolerance to total adjustment, and promote balanced growth

Global economic balances can only be reached through sharing benefits and needs between developing and developed states.

 

Yunnan province as China’s southwest bridgehead

The southwest bridgehead is the front line of China’s interaction with the Indian Ocean, and its purpose is to construct a series of overland pathways given China’s southwest connects to South Asia and Southeast Asia trade routes. The bridgehead’s purpose is also to construct a base facing South Asia and Southeast Asia that supports export processing and the facilitation of international and domestic production, and the Kunming international land port economic zone.

Establishing Kunming as an inland economic zone will strengthen logistical flows coming from South Asia and Southeast Asia, create a tourism base for national culture, a commerce base, export processing base, and modern agriculture base as well as an information platform. This platform will come together through the increased progress of the yearly Kunming trade fair, China-South Asia fair, and the creation of different cooperation forums. The central objective is to turn Yunnan province into China’s platform for communicating with Southeast Asia and South Asia. Through creating this window, Yunnan can facilitate the building of trust between China and South Asia and Southeast Asia, and demonstrate the fruits of reform as well as Chinese culture by promoting mutual understanding and friendship. Yunnan can become a demonstration zone for how China can open to its neighbors.

The influence of a bridgehead extends outwards and is continuously stretching its limits. In China this includes two major regions.

 

A bridgehead to Southeast Asia

Southeast Asia includes the 10 ASEAN states of Malaysia, Philippines, Singapore, Thailand, Indonesia, Brunei, Vietnam, Lao PDR, Cambodia, and Myanmar and the non-ASEAN state of East Timor. In total this region covers 4.5 million square kilometers, supports a population of 580 million, has a combined GDP of $1.9 trillion USD and a total trade of approximately 2 trillion USD. The creation of the ASEAN-China Free Trade Zone in 2010 created a free trade area of 13 million square kilometers and a combined population of 1.9 billion. It is the largest populated free trade zone in the world and the largest free trade zone among developing countries.

China and ASEAN states are linked by mountains and rivers and share advantages by having varied distribution of resources, differences in specialization of industrial processes, complementary strengths, and an enormous potential for cooperation. As trade between China and ASEAN states increases at a rapid rate so are rates of investment. China is ASEAN’s 4th largest trading partner and ASEAN is China’s 5th largest trading partner. ASEAN has been established as a priority zone for attracting Chinese FDI and is one of the outward investment zones for Chinese industries. ASEAN is also a major market for Chinese labor, and China is winning an increasing amount of engineering contracts in ASEAN.

To date China and ASEAN trade relations have already entered a “Golden Era” and as China and ASEAN open their markets to each other, the ASEAN-China Free Trade Zone will enter a substantive phase. These contributions will bring robust commercial opportunities as the Southeast Asian peninsula is a major global agricultural production area and a critical zone of emerging industries.

 

A bridgehead to South Asia

The South Asian subcontinent (by way of the BCIM economic zone which includes Bangladesh, China, India, and Myanmar) is the geo-strategic fulcrum between the Indian Ocean and the Arabian Sea. At the same time, it is zone of choice for the secure channeling of China’s energy resources. The South Asian Subcontinent is also known as the Indian Subcontinent and is comprised of the Indian peninsula, the Indus river plateau, and the downstream plains of the Ganges and Brahmaputra rivers covering an area of 4.3 million square kilometers. It supports a population of 1.2 billion on 10% of the Asian continent. Its northern reaches are formed by the Himalayan and Karakoram mountain ranges and its southern limits are the Arabian Sea and the Bay of Bengal. Its western borders are limited by the Iranian plateau, and its eastern frontiers are the mountainous eastern regions of India, Bangladesh, and Myanmar.

The severity of South Asia’s natural landscape has prevented integration and the historically its cultures have been relatively closed-off to each other. This has produced divergent sentiments of independence in the region. The South Asian subcontinent includes India, Pakistan, Bangladesh, Nepal, Bhutan and does not include Sri Lanka or the Maldives. Its major rivers are the Indus, Ganges, and the Brahmaputra. Major agricultural products are wheat, rice, cotton, hemp, cane sugar and tea. Resource endowments include coal, mica, zinc, and gold.

An international pathway can be built from Yunnan through Myanmar to give China direct access to the Indian Ocean and its benefits will promote good neighborliness and the strengthening of border areas. Frontiers serve the specific functions of national defense and economic and cultural exchange. Sharing borders with Myanmar, Lao PDR, and Vietnam, Yunnan province serves as the connective link between China, South Asia, and Southeast Asia. It offers an alternate route to the passage of goods through the Straits of Malacca and is the fastest land route for goods to travel from China to South Asia, the Indian Ocean, Europe, and Africa.

Due to its advantageous geographical position, the province can facilitate huge market potential with partners in South Asia, Southeast Asia, and the Middle East. Lastly, because of its history of friendly exchange with its neighbors, Yunnan province serves as the ideal representative for diplomatic connections.

The construction of international pathways will do much to improve the state of transportation and shipping and can only expand and deepen the political, economic, and cultural cooperation between China and Southeast Asian states. Building these pathways and supporting the bridgehead strategy will develop regional economic cooperation between China, Southeast Asian, and South Asian states, strengthen the relationship of good neighborliness, and bring stability and peace to China’s border areas.

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by | October 10, 2013 · 9:18 pm

The Growing Transport Network and Dams on in the Greater Mekong Subregion

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by | October 5, 2013 · 12:31 pm

Missed Opportunity? Barack Obama Cancels Southeast Asia Trip

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Earlier this week US President Barack Obama cancelled his historic visits to Malaysia and the Philippines but made good on his promise to attend regional leadership meetings in the coming days where key trade agreements and hard power deals are likely be negotiated and fortified.  However, domestic pressures over the budget crisis and government shutdown in Washington have caused the President to scrap his trip entirely.

Will Obama’s absence be a game-changer for regional relations and the US’s strategic pivot to the Asia Pacific?  Will Tea Party-infused political brinkmanship in the US offer Chinese president Xi Jinping, also attending the summits, a golden opportunity to expand China’s regional footprint?

Obama’s strategic “pivot” and return to the Asia Pacific, by and large, has utilized Southeast Asian states as a springboard in developing a program of political and economic laurels that open up Southeast Asian markets for foreign direct investment and international trade.  From a 1,000 foot view, the US pivot looks similar to China’s foreign policy to Southeast Asia, thus the US’s program both complements and competes with China’s regional rise.  It is important to remember that due to its proximity to Southeast Asia and its fast-tracked economic expansion, China’s investment and trade volumes with Southeast Asia will always exceed that of the United States.  However another hard reality is that US power in Southeast Asia, both soft and hard, will always eclipse that of China’s.  It will take major restructuring in the US (for the worse) and in China (for the better) to reverse this relationship.  Despite the best efforts of the Tea Party in the US and potentially of an equally challenging New Left movement down the road, the status quo in terms of the channels that express US military, economic, and cultural power in Southeast Asia are unlikely to weaken.  For China, we are uncertain of Xi Jinping’s economic reform platform likely to unfold at year’s end, but we can be assured that his platform will focus on strengthening China’s domestic economy first, with foreign policy and other considerations taking a backseat.

In terms of soft power choices between China and the US, the consistent preference of Southeast Asians is to side with the US or at the very least, against China.  Wealthy Southeast Asians, like the Chinese, send their children to top US universities for robust skilling; Southeast Asians, like Americans, go to China to learn Mandarin. Middle income consumers in Thailand, Vietnam, and Malaysia refuse to purchase Chinese made smart phones (and their apps and operating  systems), those who have the means to purchase cars in Laos choose Japanese Toyotas or refurbished Korean used cars, and with the Chinese mainland’s crowding out of the Hong Kong and Taiwan entertainment industries, no one in Southeast Asia listens to new music or watches new films coming out of China. Continue reading →

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by | September 17, 2013 · 11:33 pm

The 3rd Annual ICIRD Conference, Part II

Previously, I introduced ICIRD 2013, a Bangkok-based conference exploring issues of development, greater economic integration, and the idea of the regional commons. This blog post will delve more deeply into the background of the commons, an alternative way of organizing public goods that circumvents the hungry advance of neoliberal globalization. 

By way of illustrating, one of the most pressing current issues surrounds the Mekong River, the classic example of a regional – and transboundary – commons in Southeast Asia. Crossing six countries, laden with social and historical significance, and layered with overlapping claims and uses, millions depend on its shared resources, while growing hydropower development threatens large-scale devastation and destruction of riparian ecosystems. But forms of the commons can range in scale from municipal parks and shared community fishing sites along river banks, to oceans and digital commons on the far end.

The Commons as Social and Historical

Certainly in the context of greater regional integration augured by the ASEAN Economic Community (AEC), the concept of the commons becomes an increasingly important, if imperiled, way of organizing assets and resources within communities. Introducing the Focus on the Global South Round Table I, Shalmali Guttal offered the following definition of the commons: it is a collection of assets that are actively managed for the good of the collective and should be accessible by everyone. They include not only natural and physical resources, but social, cultural, political (e.g., concepts like justice) and intellectual wealth as well.

But that’s not all that the concept offers: there can be no commons without a certain type of social relations based on sharing. It’s important to remember that the commons are entwined within the history of Southeast Asia, just as its growing commodification is embedded within the larger context of globalization. As Dr. Victor Savage (National University of Singapore) mentioned in an earlier panel, historically the Southeast Asian region has lacked traditional notions of private land ownership. Here, instead, usufruct rights guaranteed the rights of access for communities, and the commons functioned as safety net and social insurance.

But over time, as  Dr. Walden Bello (Member of the Philippines’ House of Representatives) reviewed, the transition to capitalism became inextricable from the plunder of non-Western societies, in a process that continues even now. He argued, for example, that the ADB and World Bank are central in enforcing ideologies of private property and codes to delegitimize communal traditions.

The tension between these divergent worldviews, one based upon the primacy of private property and the other upon the social relations upholding the commons, is ultimately not about choosing between a given set of choices, but rather about entire ideological frameworks brought together in one current, historically-informed confrontation.

Resistance and Alternatives

Pervasive throughout the ICIRD panels was the idea that everywhere the commons are being threatened by a neoliberal logic that seeks its enclosure and commercialization. The growing commodification of nature makes itself readily felt in the rise of issues like land grabbing, water privatization, and rampant hydropower development in the region, all of which were repeatedly raised in the course of the conference.

Neoliberalism, in Dr. Bello’s account, lost much of its legitimacy, due in part to the role of research organizations and scholars who documented its high human costs, as well as the internal crises of neoliberalism, erupting spectacularly in the Asian financial crisis of 1997 and the global crisis in 2008. He argues that while neoliberalism has been largely discredited, the lack of alternative paradigms means that it remains a source of default strategies for technocrats.

It may be partially true that business as usual continues for lack of other competing visions. But power also incentivizes its own perpetuation. And raising alternative possibilities is one way to counter the naturalization and legitimacy of dominant neoliberal globalization as it is taking place.

In seeking alternative forms of state-community relationships, it makes sense to step back from the lens of the nation-state. Yong Ming Li’s presentation (subtitled “Seeing like a chao baan/neak tonle,” in reference to James C. Scott’s seminal tome) offers one such narrative. By shifting down to the scale of the local, social-natural relations take on a new centrality that includes “a multiplicity of grounded perspectives and practices from the chao baan (villagers) of Chiang Khong, Thailand and the neak tonle (villagers living on the Tonle Sap lake)” (from ICIRD paper abstract). These social-natural relationships defy conceptualization based solely on market relations with nature.

The role of the research and academic communities seems clear – to keep giving voice to critical analyses of the changes taking place in the region and what’s at stake. To illustrate, the “Encouraging Green Growth in Thailand” forum was based on the appealing premise that “green economies will lead to higher resource efficiency, and investments in green innovation will benefit green pioneers with new markets, higher productivity, and human capital development” (from panel summary). Yet the forum ended in a robust debate about whether green growth (with its undeniable focus on growth) represents merely another reconfiguration of capitalism being pushed towards a new frontier.

Ultimately, as former Philippines Senator Dr. Orlando S. Mercado (who holds the distinction of being the first permanent representative of the country to ASEAN) told me after the Focus panel:

“We have to struggle to have our voices heard. But we should not only just be making our voices heard. We have to be able to move within the system to affect changes by taking advantage of various crises that erupt. To me, as a scholar interested in disaster mis-management, I feel that the cause of protecting the commons is served very well by making sure that each crisis, each disaster, each calamity, is taken advantage of to show that there must be people championing the cause of those who are adversely affected by its lack of management and the privatization that is ongoing as a consequence of economic development – all on the altar of creating a community that is ‘prosperous’.”

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by | September 3, 2013 · 7:03 am

The 3rd Annual ICIRD Conference, Part I

With the ASEAN Economic Community set to launch in 2015, it’s not surprising to see a heightened level of uncertainty, concern, and even apprehension about what this enhanced sphere of regional integration will mean for Southeast Asian nations.

Holding this backdrop firmly in mind, the 3rd Annual International Conference on International Relations and Development (ICIRD) recently commenced at Chulalongkorn University in Bangkok, on August 22-23, 2013. This year’s timely theme, “Beyond Borders: Building a Regional Commons in SE Asia,” showcased established voices, civil society organizations, and a new generation of scholars rising to the challenges of this historical moment. Over forty panels traversed diverse but interrelated topics from environmental justice and human rights, to sustainable economic growth.

While few would deny the problems of development in Asia as they have manifested so far (e.g., environmental degradation, growing income disparity, and resettlement), finding a consensus on a way forward proves much more difficult. As Dr. Siriporn Wajjwalku (Assoc. Prof., Thammasat University) noted with some urgency in the opening remarks, “2015 for us in the region is approaching… It’s extremely important for us to think about the commons and go beyond the borders that we are facing now.”

Dialogue and discussion are a good place to start. Thus Dr. Carl Middleton (Lect., Chulalongkorn University), a member of the ICIRD Executive Committee that organized the event, proclaimed the conference “a success in that there was plenty of sharing of knowledge, experience and ideas amongst the participants, and a wide range of examples of the commons and how they support peoples well-being and create public space were discussed.” Continue reading →

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by | August 21, 2013 · 9:17 am

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

By Xiangming Chen and 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 examining 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 northern 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, was opened with much fanfare in June 2012. While seemingly disparate, this pair of anecdotes reveals the ambition of China’s ‘Go Southwest’ strategy to extend its economic interests and influence into Southeast Asia.

Integrating with Southeast Asia is a key component of China’s multi-pronged regionalisation around its borders as its global rise continues. China’s regional assertion reinforces a larger trend of new spatial configuration as an inherent part of increasing globalisation driven by China. This 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 (Chen). As a result, once small, marginal, and remote border cities and towns have become larger and lively centers of trade, tourism, and other flows. China’s effort to engage Southeast Asia leaves many striking footprints within and beyond the cities of the Asian Development Bank (ADB) facilitated Greater Mekong Subregion (GMS), which was launched in 1992 and consists of China’s Yunnan Province (with the later addition of Guangxi Zhuang Auto-nomous Region), Cambodia, Laos, Myanmar, Thailand, and Vietnam.

Trade with the GMS Countries

Inter-country and intra-regional trade provides the starting point for examining the extent of economic integration in the GMS as well as its unbalanced development. China’s trade with each of the GMS countries has grown since 1990, most rapidly since 2000 (see Figure 1). Given the size of their economies, Thailand, followed by Vietnam, led the smaller GMS countries in trade with China. However, the total volume of China-Myanmar trade rose by $5.9 billion from 2001 to 2011, while China-Laos trade increased by $1.2 billion (Figure 1). Much of China’s growing trade with Myanmar and Laos occurred through cooperation across international boundaries. The role of Yunnan and its capital city of Kunming in China-GMS trade cannot be understated. Yunnan’s GDP skyrocketed from $33 billion in 2000 to $160 billion in 2012, and the province aims to double that to $320 billion by 2017 through even stronger cross-border economic and trade ties. Kunming acts as the origin and core of economic activities that reach into the bordering countries of Laos, Myanmar, Vietnam, and beyond.

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