Thailand to propose regional infrastructure fund to counter Chinese influence in South-East Asia
Prime Minister Prayuth Chan-ocha will propose a regional infrastructure fund to ween Thailand, Cambodia, Laos, Myanmar and Vietnam away from dependence on Chinese economic investment when Bangkok hosts its neighbours for their annual summit today.
Earlier this year, China offered $1.5 billion to the lower Mekong countries to extend its influence in a region where Beijing is already the largest foreign investor and wields major influence through the Lancang-Mekong river body.
If agreed, the Fund is unlikely to challenge China’s regional financial hegemony in the short to medium term, unless the West invests in the fund—especially American direct investment. Only Singapore has the necessary economic muscle to fully invest in the fund but the city-state’s instinct is to engage not compete with China in the region given its history of hedging between Beijing and Washington.
The China-ASEAN fund is expected to pump another $3 billion into the region in the coming years. This is coupled with direct investment by Beijing under the Belt and Road Initiative. The upshot is the possibility of competing Funds continuing to split ASEAN consensus when it comes to challenging Chinese interests in the region or responding to a Mekong dispute turning into a new flashpoint in the region.
