International Law

China Uses Soft Power with ASEAN

By Stan

One of the big recent themes in the international press regarding China is the notion that the Middle Kingdom will come out of the Great Recession in much better shape than other nations, particularly the U.S.

I wrote on this recently (see previous post here), disagreeing generally with this notion.

If you’re keeping score at home on how China is doing on the international stage in the midst of the recession, here’s one story to note regarding the recent meeting of the Association of Southeast Asian Nations  (ASEAN). China has been making significant progress with ASEAN on several different levels for many years now, especially on the trade front.

China promised ASEAN the following goodies last week:

China will extend $25 billion in aid and credit to members of the Association of Southeast Asian Nations, ASEAN, officials revealed Sunday.

Chinese Foreign Minister Yang Jiechi, meeting with envoys from the 10 ASEAN countries in Beijing, said China will establish a $10 billion China-ASEAN investment cooperation fund to be used for infrastructure construction, energy production, information technology and communications, the state-run Chinese news agency Xinhua reported.

Yang also revealed China planned to offer $15 billion in credit to ASEAN countries during the next three to five years, as well as $39.7 million in special aid to Cambodia, Laos and Myanmar to meet what Chinese officials called urgent needs in those countries.

Remember that these countries have become heavily interdependent with the Chinese economy and the global supply chains of many multinational enterprises, often acting as suppliers of intermediate goods to China. The huge fall-off of China’s export market means that a lot of these suppliers are sucking serious wind. I suspect that they really need the help and, as economic development has proceeded in the region with China as a manufacturing hub, looking to China for assistance makes a lot of sense.

If China can follow through with significant assistance to the ASEAN nations during this time of crisis, the move will certainly help to solidify its status as a regional leader. It would be interesting to know what Japan and the U.S. have offered, if anything, to ASEAN over the past six months.

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Full post as published by China Hearsay on April 13, 2009 (boomark / email).