Chinese Business in Southeast Asia

For a region in which, throughout 2007, the only functioning democracy was the rather rickety Cambodian version, mainland Southeast Asia customarily watches state decision-making being taken from behind curtains. In Vietnam, Laos and the provinces of China that are part of the Greater Mekong Subregion, decision-making is dominated by central-local struggles for resources within various the Communist parties and other influential parties.

In Burma, leading figures in the military junta hold the reins of power and attempt to suppress any coverage of their acts. In Thailand, until the apparent and still fragile return of democracy signaled by the recent election (December 23rd, 2007), most observers understand that what appears in newspapers and on the television has little relevance to the real reasons decisions are taken. The same is true for Cambodia.

The nature of the influencers varies from country to country and their relevance varies in time. As oil and gas finds are confirmed in Burma and Cambodia, for example, the role of oil companies from India and China intensifies, as those two countries seek to secure energy supplies for the next decades. The long-term cross-border investment by Chinese companies and entrepreneurs in northern Burma, in particular, has led to estimates of as many as one million Chinese being resident in the Mandalay region.

The border separating China and Burma has become a conduit for Chinese investment in the southern neighbour. Chinese managers now hold a huge amount of influence in that area and Chinese workers are active on infrastructure construction throughout the country. It was Chinese money that enabled the Burmese junta to complete their enormously expensive relocation of the capital city from Rangoon to Naypidaw. For decades, Chinese weapons have buttressed the junta and enabled them to fight wars against the many ethnic minorities seeking autonomous rule.

In Cambodia and Laos, the Communist revolutions of 1976 were accompanied by nationalistic impulses which reduced overseas influence and, in the case of Cambodia, depopulated Phnom Penh and the countryside of ethnic Chinese. A feature of Laotian history has always been the very low density of the population combined with the difficult terrain of the country. The lack of roads or railways has contributed to the difficulty in promoting economic development.

This situation is changing as Asian Development Bank funding has led to the creation of a transportation plan which will link both north (Kunming) to South (Singapore) and east (Da Nang) to west (Delhi) at some, perhaps distant, time in the future. It is common for Laos to be conceived of as one of the crossroads in this plan, which will bring, it is hoped, numerous benefits. However, these infrastructure developments are largely being built by Chinese firms utilizing imported Chinese labour.