Under President Xi Jinping, Southeast Asia occupies a special place in China’s foreign policy. Politically, the consolidation of good relations with countries there is an essential component of China’s periphery diplomacy. Within the framework of China’s ambitious Belt and Road Initiative (BRI), Southeast Asia sits at the juncture of the Silk Road Economic Belt (mainland Southeast Asia) and the 21st Century Maritime Silk Road (maritime Southeast Asia). China is one of the top investors and plays a significant role in the infrastructure project financing in Southeast Asia, especially the mainland countries including Myanmar, Laos, and Cambodia. Among maritime countries, the role played by Chinese financing is also growing as attested by funding and investment pledges made to Indonesia and the Philippines in the past few years.
According to the Chinese government, there are five areas that China emphasizes in the development of the BRI: policy communication, road connectivity, unimpeded trade, monetary circulation, and understanding among the people. Within the framework, connectivity, especially the hardware connectivity through transportation infrastructure development, occupies a central position in China’s strategic plan. Transportation networks especially in mainland Southeast Asia will enhance access to the Indochina peninsula and the Indian Ocean, as well as further consolidate China’s political and economic influence in the region. The new projects are also expected to provide much-needed business opportunities to the Chinese infrastructure industry burdened with over-capacity at home. China also expects these networks to reduce barriers and facilitate trade and investment with Southeast Asian countries.
This paper was originally published by the The Asan Forum’s Special Forum on November 3, 2017. Read the full paper here.