Tuesday, 3 September 2024 – Professor Evelyn Goh explored the political opportunities and strategic concerns arising from Southeast Asia’s growing economic ties with China.
REGIONAL SOCIAL AND CULTURAL STUDIES PROGRAMME AND REGIONAL ECONOMIC STUDIES PROGRAMME HYBRID SEMINAR
ISEAS – Yusof Ishak held a hybrid seminar titled “Chinese Investments in Southeast Asia: Patterns and Significance”.
In the seminar, Professor Evelyn Goh (Australian National University) gave a talk on Chinese investments in Southeast Asia based the research she had undertaken for a recently published co-authored book of the same title. The seminar was moderated by Dr Cassey Lee, Senior Fellow and Coordinator of the Regional Economic Studies Programme at ISEAS.
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Professor Goh first described how the database on Chinese investments were constructed. The database covered the ASEAN-10 countries and spanned the 2005 to 2019 time frame. The definition of investment used in her study covers both ownership (acquisition) and service provisions. This approach was take due to the often-intertwined nature of Chinese investments. She noted that while effort had been undertaken to compliment the dataset with ASEAN’s self-reported annual investments, not all datapoints could be reconciled due to the difference in reporting requirements.
Predicated on this, Professor Goh went on to highlight the two periods of significant Chinese investments in the region. The first period, covering 2009-2013, coincided with the Global Financial Crisis and the decline of other sources of investment in the region. The second period, 2014-2019, covers the rollout of the Belt and Road Initiative (BRI). Initially focused in the sector of energy and metals, Chinese investments later diversified to include areas such as infrastructure and beyond. Professor Goh noted that while nominally large, when compared against other FDI partners, a more conservative picture of Chinese investments has emerged. For instance, looking at the ASEAN data set examining the top three non-ASEAN foreign investors in the region, China only ever featured as the third (i.e neither the first or the second), and only in the years 2012 and 2018.
Further breaking the investment down into the different countries, she grouped Chinese investments into three categories: those taking up the highest proportion of FDI – Indonesia, Malaysia, and Singapore, medium proportion investments – Laos and Vietnam, and the smaller proportion of investments: Cambodia, Philippines, Thailand, Myanmar, and Brunei Darussalam. Of these three groups, she noted that the vulnerability of such investments occurred mostly with the third group despite its smallest relative share in Chinese investments in the region. This was partly due to the types of industries such investments were made in – energy and infrastructure – as well as the fact that they tended to account for much of that country’s total FDI, thus making them more dependent.
Examining more broadly at the types of vulnerabilities arising from such inflows into Southeast Asia, Professor Goh offered two ways in which this might occur: one, where critical national infrastructure is being controlled by non-national third parties, and two, when Chinese investments occur in an industry or sector strategically important to China.
The seminar fielded various questions from in-person and online audiences. Some of them pertained to how well Southeast Asians countries were able to assess the risks of Chinese investments in the region. Others also wondered about the distinction between the state and private companies when it came to Chinese investments. On the topic of diversifying trade sources, a viewer also wondered if high Chinese investments in particular country would deter other potential investors, and in doing so perpetuate further dependency on Chinese investments.
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