China the dominant force at Mekong region summit

Mar 31, 2008 (AFP), When six Mekong country premiers meet in Laos from Sunday, China will be the elephant in the room, having lavished highways and sports stadiums on its neighbours and expanded its search for resources.

Booming China is fast emerging as the biggest economic patron of Laos, host of a two-day Greater Mekong Subregion summit, as well as of Cambodia and Burma, and it is a formidable force in Thailand and Vietnam.

Beijing has expanded its search for energy, minerals and markets as far as Africa and South America, but it has also pulled its smaller Southeast Asian neighbours firmly into its orbit with aid, trade and investment.

While China’s economic ties with GMS members Thailand and Vietnam still compete with economic powers like Japan, Taiwan and South Korea, they dominate in military-ruled Myanmar and in poverty-stricken Cambodia and Laos.

Chinese road crews are helping build transnational highways, such as a link between Bangkok and the southwest Chinese province of Yunnan, that are transforming the region of more than 266 million people under a scheme promoted by the Asian Development Bank.

Traders from China have fanned out across the region, and their cheap produce and consumer goods — from textiles and plastic wares to mopeds and TVs — are now sold in the remotest Mekong jungle backwaters.

He Yafei, China’s assistant foreign minister, said last Wednesday that the GMS — which starts with a dinner on Sunday followed by the meet on Monday — aims "to enhance economic links, to eliminate poverty and promote development".

China would use the summit to "put forward a new cooperation initiative that will include railway, power, information superhighway and other infrastructure development projects" and facilitate environmental protection, he said.

"This is an initiative for mutual benefit and win-win progress."

Not everyone is convinced, especially when it comes to the Mekong, Southeast Asia’s largest river, which is shared by the region’s unequal members.

China is the only Mekong country to have dammed its mainstream, and it is planning several more hydropower projects on the Chinese and lower Mekong that have alarmed environmentalists worried about its ecology and fish stocks.

In 2004 Chinese engineers finished blasting rapids and dredging the river in the Golden Triangle area for cargo traffic, turning the sleepy Thai river port of Chiang Saen into a bustling trade hub with a Chinese casino.

Some Thai and Lao villagers blamed the river works for falling fish stocks.

China’s rise has transformed many other parts of the Mekong region.

In Cambodia, where the 1975-1979 communist Khmer Rouge regime was backed by Beijing, China is the largest foreign donor and has invested in power projects along Cambodia’s south coast as well as mines in the northeast.

The China National Overseas Oil Corp has won rights to explore at least one offshore oil field block although no production date has been set.

The garment export industry, which accounts for some 80 percent of Cambodia’s foreign earnings, is heavily crowded with Chinese firms.

In Burma, a pariah state shunned by many Western countries, China was the biggest foreign investor in 2006, pouring in more than 280 million dollars — 100 times more than in 2003, according to Burmese government figures.

Most of the investment has been in big-ticket projects such as dams, mainly to provide electricity for Yunnan, and offshore gas schemes. China is also mulling a gas pipeline to Burma’s Sittwe port near Bangladesh.

But China’s growing influence is also apparent in the north of Laos, the region’s poorest country with a communist government that was pro-Moscow until the collapse of the Soviet Union and has since warmed to Beijing.

"A lot of Chinese businesses have sprung up," said Martin Stuart-Fox of Australia’s University of Queensland.

"Larger investments are in plantations and mines. Permission has been granted by local officials, for good bribes.

"Land has been confiscated from traditional users, which has caused popular discontent. A weak government in Vientiane has allowed provincial officials, and the local military, to collaborate with the Chinese," he said.

In the Lao capital, Chinese workers are constructing the main stadium for the 2009 South East Asian Games. Beijing has also built a national cultural centre, and a Chinese shopping mall has popped up.

Not far from the summit site, a Lao-Chinese joint venture is planning to develop the That Luang township and industrial park outside Vientiane.

"This is being called the ‘Chinese city’," said Stuart-Fox.

"It is widely thought that much of it will be occupied by wealthy Chinese business people intent on extending their exploitation of the country’s natural resources over the whole of Laos."

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