Asian Giants Jostle for Asean Influence

BANGKOK— Differences between East Asia's big economic powers emerged through the fog of the Asean summit in Thailand this week.

While China was slapping large wads of cash on the table in a bid to consolidate its rising influence in smaller Asean countries, Japan was making more cautious and long-term proposals for a much more inclusive regional economic development.

China wants to quickly follow up its newly minted free trade agreement with the 10-country Asean bloc by spending up to US $10 billion on infrastructure investments.

Japan meanwhile is talking about an expanded European Union-style regional community with its own currency and a place at the table for a distant cousin—the United States.

All this was going on while the Asean countries themselves continue to send out obtuse and conflicting signals about their collective intentions for a much more liberalized trading bloc.

Most observers and analysts agree that the recently fast-forwarded deadline of 2015 for achieving economic integration and free movement of labor is unrealistic.

Japan, which is outside Asean, like China and India, suggested at the joint summit in Thailand that such a goal might be reached by 2030.

But whether Asean manages to become an EU-style entity with open borders, it's becoming increasingly clear that the bloc has numerous suitors.

Asean includes the Philippines, Vietnam, Indonesia, Singapore, Malaysia, Brunei, Cambodia, Laos, Thailand and Burma.

In competition with China and Japan for a slice of the growing Asean economic pie are India, the EU, the United States and Australia.

Although there is much disparity between the economies of Singapore and Thailand on the one hand, and Burma and Cambodia on the other, Asean is growing rapidly.

"I think they all understand this Asean is a market of 600 million people where high-spending consumerism is rising rapidly alongside a lot of grinding poverty," said an Asean expert and economist at a Western embassy in Bangkok. "It's a place where goods are still much cheaper to make than in Europe, the U.S. and Japan, and still able to compete with China.

"The problem may be that the outsiders can see these facts better than the people on the inside who run the separate economies that make up Asean," the economist said, speaking on condition of anonymity.

"The problem is certainly that Asean is fraught with internal distractions. The Thailand summit was another collection of embarrassments. National leaders did not arrive for the opening ceremony. There was a public row and criticism about human rights issues."

With China, Japan and India jockey for influence in this market, the government of President Barack Obama is showing signs of wanting to reverse the US disinterest in Asia which marked the last US president's two terms.

Obama is scheduled to meet Asean leaders when he visits Singapore in November.

He might use that occasion to announce proposals to begin formal free trade agreement talks with the bloc, albeit in the queue behind the EU. Asean is now the US's fifth-largest trading partner, behind Canada, Mexico, China and the European Union.

The influence of Japan, a traditional post-WWII Asian investor and generous loan and grant provider, has waned in recent years as China's has risen.

India is keen to catch up. Asean is India's fourth largest trading partner after the EU, the US and China, and like China, has just completed a free trade agreement for goods. Now it is negotiating to reach a deal for its burgeoning services—bidding to get access to the Asean market for medicine, nursing, engineering, accounting and teaching.

Washington's biggest economic partner in Asia by a long mile is China.

Even in a globally depressed year, the US imported from China in the first eight months goods worth $184.9 billion—more than three times what it has bought from its next nearest Asian partner, Japan.

In comparison, the value of imports from Thailand was $11.8 billion, from Malaysia $14.5 billion, and from Indonesia $8.5 billion.