Bridging the gap

06 October 2010
Steve Finch
Southeast Asia GLOBE

In the Asean region, there could soon be a new economic kid on the bloc. When Hanoi hosts the fifth East Asia Summit at the end of this month, Southeast Asian leaders along with those from the Pacific region are expected to unveil a huge $290 billion infrastructure blueprint focused almost exclusively on the Asean region.

As expected, China has already manoeuvered to be intimately involved in what is known as the Comprehensive Asia Development Plan (CADP) over the next five years. Less expected, perhaps, are the increasing signs that the Chinese may be outmanoeuvered by their closest economic and geographical rival – Japan.

After overtaking Japan as the second-largest economy in the world during the second quarter, China’s rise in Southeast Asia has for some years now looked inevitable. In Cambodia, for instance, Chinese approved investment reached $5.6 billion between 1994 and the end of the first half of 2008, which nearly matched the total Cambodians invested in their own country.