China’s investments in Southeast Asia took a dive in 2018, a sign Beijing’s policies are being challenged abroad.
Construction contracts worth more than $100 million in ASEAN countries dropped nearly 50 percent in 2018 to $19.2 billion, the South China Morning Post reported, quoting data from the American Enterprise Institute analysed by Citi Economics.
“China’s overarching geostrategic imperatives suggest it will be incentivized to be more sensitive to ASEAN’s resistance going forward,” Citi wrote in its analysis.
In the second half of 2018, China only registered 12 projects in the 10 Southeast Asian countries, down from 33 projects for same time the prior year.
Project activity slowed in Indonesia, Philippines and Singapore, while no new projects began in Thailand or Vietnam, data show.
The ongoing U.S.-China trade dispute could change the kind of investments Beijing could make in Southeast Asia.
Trade tensions “could prompt an increase in Chinese investments in ASEAN to circumvent tariffs on imports from China,” the Citi report read.
Some of the slowdown is being attributed to pushbacks against Chinese expansion.
Last week, Malaysian Prime Minister Mahatir Mohamad cancelled a $20 billion China-funded rail project, and analysts have warned their governments about unsustainable debt involved in cooperating on Belt and Road initiatives in the region.
The Chinese projects are being criticised as “neo-imperial,” writes Phidel Vineles of Nanyang Technological University in Singapore.
China has invited developing countries to build new infrastructure with Chinese loans, and the Belt and Road initiative is being welcomed in some parts of the South Pacific.
Matangi Tonga reported Monday Tonga will play an “active role” in China funded projects. Tonga’s Prime Minister told Xi in November he was delighted Tonga is joining the Belt and Road Cooperation, according to the report.