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Southeast Asia represents a ripe opportunity for the US and its Western allies to diversify their supply chain away from China, making it the next big economic battleground between rival nations.
“China is a geographical fact in the region – it’s an economic fact,” Ashok Mirpuri, Singapore’s ambassador to the United States, said at the Aspen Security Forum in July. “He has been there for generations: he has risen, he has come down, he has risen again, but the region has had to learn to live with China”.
“The United States has been in many ways a stabilizing force in the region and we don’t see the United States as an outsider,” he continued. “We also see them as a resident power in the region. So both, which have to do with a region of Southeast Asia. [with] 600 million people, this is where the competition takes place day after day, week after week, month after month. ”
Secretary of State Antony Blinken began his visit on Tuesday when he met with leaders in Cambodia, which currently serves as the head of the 10-country trading bloc known as the Association of Southeast Asian Nations (ASEAN).
ASEAN has found itself in the spotlight not only for its proximity to China, but also for the promising business opportunities in the region. Blinken is also expected to attend a ministerial meeting with ASEAN foreign ministers on Wednesday.
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Mirpuri highlighted the role of Southeast Asia at the “heart of this competitive dynamic between China and the United States”, which has transformed the region into a budding economic battleground between the two world powers. China’s “Zero-COVID” policy has caused a global disruption of the supply chain and the threat of an invasion of Taiwan has caused many trading partners to consider back-up options.
Ford opened a factory in Cambodia in April after investing $ 21 million to build facilities in Pursat province, which according to Deputy Prime Minister Keo Rattanak was part of an effort to attract new business and partners to the region. Apple, meanwhile, opened a new iPad factory in Vietnam in 2021, a process that began in 2019 as part of circumventing U.S. tariffs on Chinese goods, according to the New York Times.
Kao Kim Hourn, deputy minister to the Prime Minister of Cambodia, told Fox News Digital that ASEAN allows its members to operate as “one big market” to benefit from each country’s competitive advantages.
“I think it depends on the international companies that are investing in those countries and where they want to invest,” said Kao, using the example of a Japanese company that, according to him, had been reluctant to open a factory in Cambodia but has now started. to build several factories in the country.
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“Of course, we all welcome investment, we welcome the relocation of factories and manufacturing companies to Southeast Asia,” he said. “This is good for us. It is good for the region.”
ASEAN members have sought to lure both the US and China into a more “cooperative and coordinated” relationship in the region to help maximize investment and growth. Mirpuri pointed to other “great powers” in the region, such as India and Japan, that could help ASEAN members while she expressed concern about “uncertainty” in US-China relations.
“We have business relations with both the United States and China, [and] we have security relations throughout the region, so we operate in that space, “he said.
ASEAN has been keeping an eye on the impact of the Ukraine-Russia war: the war has exacerbated inflation problems, as well as threatening food security.
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However, this also presented some business opportunities for the region, Kao explained. You said ASEAN countries produced millions of tons of rice – 6 million from Cambodia alone – which helped members maintain a stronger level of food security by exporting it to other countries as well.
The group’s maritime states, such as Singapore and the Philippines, have struggled a little more over the fact that they need to import basic crops, but Kao insists the alliance will be able to “fix” it.
Kevin Maher, senior consultant at NMV Consulting and former director of the Japanese office at the State Department, told Fox News Digital that proximity to China makes Southeast Asia “vulnerable” to Chinese claims and advances through its Belt and Road Initiative.
Maher said that if the U.S. can increase investment in the region, those countries no longer need to take out Chinese loans to help build infrastructure, in turn cutting some of China’s influence in the region by diversifying the U.S. supply chain into a double blow for Beijing’s economic ambitions.
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“The future will be this continuous struggle, not only on the military side, but on the side of infrastructure investments, official development assistance and economically, to try to balance these very robust efforts by the Chinese to enter and dominate much of the countries of the Southeast Asia, “Maher said.