US policies drive SE Asia toward China

By Ding Gang Source:Global Times Published: 2012-7-18 20:00:00

A major reason why Myanmar has conducted reforms is that it hopes to end its overdependence on China. This hope is also behind the adjustment of US policy toward Myanmar. If the US maintains its sanctions on Myanmar, this will only force Myanmar to embrace China, which Washington does not want to see. So Myanmar and the US both want to balance China's influence.

The US eased its sanctions after Myanmar started its reforms and the US naturally would like to see US companies and enterprises immediately enter Myanmar and grab a slice of its market.

From this perspective, the US pivot toward Asia is not able to isolate China. Instead, this might even bring profits to China, because what Southeast Asian countries need most at the moment is investment.

US Secretary of State Hillary Clinton recently visited some Southeast Asian nations. While there, she said the chief aim of US diplomacy at present is to step up its links with Asian countries with cooperation with ASEAN at the core. She also announced that the US will grant $50 million to promote the Lower Mekong Initiative and for the development of education, environment, health and infrastructure in the Lower Mekong countries.

According to a recent report by the Asian Development Bank, Myanmar's infrastructure remains poor. Electrical coverage in the country is merely 26 percent and the highway mileage per capita there is two kilometers per 1,000 people in contrast to an average of 11 kilometers across the whole of Southeast Asia. To bridge the gap, Myanmar needs more money.

If the initiative can be fully implemented with US support, then it will bring benefits not only to Myanmar and ASEAN countries, but to China, Japan and South Korea as well. China and ASEAN have already shifted the focus of their cooperation to connecting the region. But poor infrastructure seriously limits China's investment.

Besides increasing investment, there is something else the US could do. What ASEAN nations want most is for the US to open its textiles market to them. The US Congress is discussing whether the US will remove its import quota of textiles from Cambodia and Laos. Myanmar also expects the US to open its textile market to it.

Before the US imposed sanctions against Myanmar, the US and the EU accounted for 54.1 and 34.6 percent of Myanmar's textile exports. These make up 10 percent of Myanmar's total export. So it will be very exciting if the US can resume its imports. This is a labor-intensive industry and a rise of US imports will create more job opportunities for Myanmar and therefore consolidate reform foundations of the country.

If such a scenario happens, a more important side effect is that it will also benefit Chinese textile and garment enterprises, because this is likely to create more conditions for their investments in Myanmar. Also, if Southeast Asian nations increase their garment exports to the US and EU, they will buy more tools and machines from China.

But one thing could cause trouble. Will Washington think that China is taking advantage of the US policy and making it harder for the US to balance China's influence in the region?

The US may wave its old "banner of democracy, freedom and human rights," but for ASEAN nations that achieve joint booming economic development with China, this may not be so attractive.

The US policy trend in the region is actually filled with contradictions. While Washington is unwilling to grant more economic aid to ASEAN countries, it hopes to make these nations' more dependent on it. While Washington wants to vie with Beijing for regional sway, it has to join China and ASEAN's joint development to share the benefits.

Such dilemma is probably the key point deciding whether the US current policy toward China is sustainable.

The author is a senior editor with the People's Daily. He is now stationed in Bankok.

Posted in: Columnists, Ding Gang

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