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Trade between China and Southeast Asia is increasing as a result of the Belt and Road Initiative, but there are also concerns arising.

Trade between China and Southeast Asia is increasing as a result of the Belt and Road Initiative, but there are also concerns arising.

In the past decade since China introduced the Belt and Road Initiative, trade with Southeast Asian countries has increased by over 100%. China has invested billions of dollars in constructing railways, airports, ports, and other infrastructure to promote connectivity. However, this drive for greater connectivity has also brought about unintended consequences, according to experts.

Analysts who spoke to VOA’s Mandarin Service in the region expressed various concerns, such as growing debt, the potential negative impact of projects on the environment, and a rise in crime.

From 2013 to 2021, the International Institute for Strategic Studies based in the U.K. reported that there were a total of 131 Belt and Road projects in Southeast Asia, which was the highest number in the Asia-Pacific area.

According to Chen Shangmao, a professor at the Department of Public Affairs at Fo Guang University in Taiwan, the BRI has brought about some positive effects due to its expansive reach.

Chen informed VOA that there has been a steady growth in trade volume between China and Southeast Asian countries in recent years, indicating its impact on the overall economy, trade, and investment.

According to the State Council Information Office of China, in 2022, the trade volume between China and the ten member countries of the Association of Southeast Asian Nations (ASEAN) increased to $975.3 billion from $443.6 billion in 2013.

What China wants

The China-Laos railway, a major project under the Belt and Road Initiative, has been completed by Beijing in Southeast Asia. This semi-high-speed rail line, spanning 1,000 kilometers and costing $6 billion, was finished in December of 2021. It has significantly reduced travel time between Laos’ capital, Vientiane, and China’s southern border.

In the future, the railway is anticipated to link Beijing and Bangkok, and potentially extend to Singapore.

The Executive Director of Panyapiwat Institute of Management in Bangkok, Pollasak Ruongpanyaroj, stated that the China-Laos Railway has only provided minimal potential advantages for one of the most impoverished nations in Southeast Asia.

Ruongpanyaroj noted that the high-speed rail connecting Laos and China has not significantly benefitted Laos’ economy. Do you observe any resources in Laos that could be marketed to China? The loan repayment is exorbitant.”

According to Chen from Fo Guang University, this railway is necessary for China rather than Laos. This is because, without other transportation systems in operation, the railway is not beneficial to Laos. However, the large debt incurred has caused great concern among other countries.

According to Chen, approximately 60% of Laos’ GDP is made up of its debt to China, which is a concerning situation. This raises additional concerns, such as how Laos plans to repay the debt and what actions they will take if they are unable to do so. Furthermore, there may be a risk of China making political demands as they see fit in response to the debt.

Drugs, telecom fraud

According to analysts, the implementation of the BRI has led to a surge in Chinese citizens in the area, along with significant investments and improved connectivity. As a result, organized crime groups have also expanded their presence in Southeast Asia.

Sihanoukville, a port city in Cambodia, has been designated as a special economic zone by China’s BRI. However, it has been associated with various issues such as drug and human trafficking, telecom fraud, prostitution, and gambling.

Ruongpanyaroj stated that the Chinese population has been involved in illegal activities such as telecom fraud and online gambling, resulting in crackdowns by Myanmar, Cambodia, and the Philippines. These actions are considered to be part of the gray market.

“He mentioned that individuals involved in illicit industries have migrated to Thailand in order to establish casinos and bars, and are also engaged in drug trafficking.”

The United Nations Office on Drugs and Crime released a report last month stating that the trend of trafficking individuals for the purpose of committing online scams and financial fraud, particularly in Special Economic Zones and other areas in Cambodia, Laos, Myanmar, and other countries like Malaysia and the Philippines, is on the rise.

Beijing has been stepping up its efforts to crack down on the problem both in China and with authorities in the region. In 2022, China’s party-backed Global Times reported that authorities resolved 464,000 cases related to online gambling and telecom fraud.

According to the report, there has been a rise in social issues caused by online gambling and telecom fraud in China, as well as in Southeast Asian nations like Myanmar, Thailand, and Sri Lanka. Chinese citizens have been targeted and have become victims of crimes such as murder, kidnapping, and human trafficking.

Environmental concerns

agriculture, and manufacturing.

Residents in Southeast Asia are greatly impacted by environmental concerns due to the presence of multiple industries involved in projects throughout the region, such as mining, agriculture, and manufacturing.

During the month of July, the Indonesian government halted PT Dairi Prima Mineral’s (DPM) mining permit in order to assess the potential harm to the environment that may have been caused by the company. As a result, DPM is no longer allowed to mine Zinc in Dairi Regency in North Sumatra. The majority ownership of DPM, at 51%, is held by China Nonferrous Metal Industry’s Foreign Engineering & Construction Co. Ltd.

According to Tongam Panggabean, the executive director of Bakumsu, a legal advocacy group in North Sumatra that represents local communities in Indonesia, the company has not made any public statements addressing the concerns.

According to Panggabean, as a company that claims to prioritize sustainability and community, there should be a favorable reaction to the ruling. However, by choosing not to openly address the case or the community’s demands, it suggests that the Chinese government does not truly value the impact their company has on other countries.

US-China competition

According to analysts, BRI has not only affected the infrastructure of Southeast Asian nations, but also influenced politics in the area by gradually challenging Western ideals.

Last month, Felix K. Chang, a senior fellow at the Foreign Policy Research Institute, discussed the correlation among the BRI, politics, and economics in an article.

“The economic logic of China’s chosen path for the BRI will impact its political dimension. Despite potential changes in the BRI’s economic objectives, its political objectives remain constant,” stated Chang.

Observers have found that China’s attempts at exerting soft power in the region have yielded varying outcomes.

Based on surveys conducted in 2022 and 2023, China was identified as the leading political and strategic power in Southeast Asia during both years. A report by the ASEAN Studies Centre at the ISEAS Yusof Ishak Institute, based in Singapore, revealed that in 2023, 68.5% of ASEAN participants expressed concerns about China’s increasing regional influence, a slight decrease from 76.4% in 2022.

According to Siwage Dharma Negara, a senior researcher at the ISEAS Yusof Ishak Institute, China is not using the BRI as a means to impose communism or authoritarianism in Southeast Asia. While there is recognition of the political implications of the BRI in the region, it is not necessarily viewed as negative.

He stated that there is potential for collaboration as long as it can support countries or partners in developing their economy and infrastructure.

In light of the growing rivalry between the United States and China, Negara suggested that Beijing may alter its strategy towards the Belt and Road Initiative in Southeast Asia.

This report was contributed by Adrianna Zhang.