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ASEAN ANALYSIS  31  August 2010

China usurping Japanese transport role in Asean

By David Swartzentruber
AseanAffairs   31 August 2010

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The quite modern 6-year-old MRT subway that I take to reach work at AseanAffairs was built with substantial help from the Japanese.

However, Thailand is a fairly large country (about the size of two Wyoming states in the U.S.) and for years the State railway system has been a loss leader for the government. The railway sorely needs new rolling stock and fresh ideas to start generating revenues.

The current Abhisit administration believes that high-speed railways will fill the bill and rather than turn to Japan, which seems to have all types of problems these days, China is apparently ready to join in the effort to upgrade Thailand’s rail service.

In addition, Chinese-made cars have been added to Bangkok’s elevated railway, the Skytrain. The original cars, still in service, were produced by the German firm, Siemens.

In addition, China is backing the development of highways throughout Southeast Asia to link up with Chinese highways.

These developments leave little doubt that Chinese is coming into its own on the Asian mainland and displacing the development role that Japan and to a lesser degree, the European Union countries, have played in the region for at least the last 20 years.

Of course, one could sense the Chinese use of soft power going back to April 2009 when a new investment fund and loan package to help alleviate the impact of the global financial crisis for Asean countries represented the latest overture of China's "soft power" campaign toward the region.

Many believe that aid package unveiled in Beijing was strategically announced to score a commercial and diplomatic point over the economically ailing United States.

The aid package underscores accelerating economic integration. China's trade with the 10-member Asean has nearly doubled from $105.9 billion in 2004 to $202.5 billion in 2007 and it keeps increasing .

In the first half of this year, the total value of China-ASEAN two-way trade reached 136.5 billion U.S. dollars, growing by nearly 55 percent compared with the same period last year.

Exports to Asean countries reached US$64.6 billion U.S. dollars, up by more 45 percent, and imports from Asean countries reached nearly US$72 billion, up by 64 percent.

A new economic alignment has emerged in Asia and where will it lead. I suggest “follow the money.”

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