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Xi gets head start on Trump in contest for South-east Asian money
[SINGAPORE] As the world's two largest economies jockey for influence in South-east Asia, one appears to be making more headway than the other.
China's presence is looming large in the region as President Xi Jinping pushes ahead with negotiating a free trade agreement and makes inroads for massive infrastructure projects as part of his ambitious Belt and Road Initiative.
In the other corner: Donald Trump. The US president's Asian tour through mid-November will mark the longest by any US leader to the region in 25 years. But governments are scrambling to re-jig the trade framework after Mr Trump's withdrawal from the Trans-Pacific Partnership in favour of an "America First" approach via bilateral deals.
After initially saying he'd skip this week's East Asia summit in the Philippines, Mr Trump is now set to attend the event Tuesday that hosts the 10-member crew of the Association of South-east Asian Nations and other world leaders. Since the start of his tenure, he's met bilaterally with the leaders of Singapore, Malaysia, Thailand, Vietnam and Indonesia.
Money talks, and this is what it's saying about how the US and China stack up against each other in South-east Asia: Trade Trade negotiations remain the elephant in the room at the Asia-Pacific Economic Cooperation and Asean leaders' meetings.
While global trade has accelerated this year, frameworks are fragile with the TPP and the Regional Comprehensive Economic Partnership pacts both incomplete. There's also talk of the US renegotiating multiple bilateral deals, particularly for nations with which it has large trade deficits.
China has significantly widened its lead over the US in trade with South-east Asia; a decade ago, their tallies were almost equal.
The investment contest has been much more choppy. Firms from each country have shown swings in spending in South-east Asia, though the US has regularly beaten China since 2010, Asean data show. That lead slimmed last year, with just US$2.4 billion separating the two nations' foreign direct investment totals, the smallest gap in five years.
One caveat: Some of China's FDI might be funnelled through Hong Kong, which masks the Chinese impact in Asean, according to a report from the ISEAS-Yusof Ishak Institute in Singapore.
Hong Kong investment has largely been on par with the mainland's over the past seven years, Asean data show.
Look for China's numbers to pick up amid plans to boost spending on Belt and Road projects throughout Southeast Asia and beyond. While a US$3.6 billion dam in Myanmar was cancelled due to protests over environmental concerns, a China-to-Myanmar crude oil pipeline costing US$24.5 billion is now operational. Construction of a China-Laos railway is also in the works.
Chinese tourists have poured into neighboring South-east Asia in greater numbers, boosting their share of arrivals in the region to 17 per cent in 2015 from 9 per cent four years earlier, Asean figures show. At the same time, US visitors were very little changed over the same period and accounted for 3 per cent in the latest data.
There's at least one category in South-east Asia that the US easily dominates. South-east Asians living in the US sent more than US$19 billion home last year, including US$10.5 billion to the Philippines and US$6.7 billion to Vietnam, according to data compiled by the World Bank.
By comparison, Asean-native residents in China sent back just US$892 million of remittances in 2016. The Philippines again led recipients, while Indonesia, Thailand and Vietnam enjoyed a fairly equal take.
Money aside, Mr Trump and Mr Xi may both have an uphill battle in winning South-east Asians' affection.
Thirty-eight per cent of people in the Asia-Pacific region think relations with the US will get worse during Mr Trump's presidency, according to a Pew Research Center poll.
That was the most pessimistic among five world regions in the yearly Global Attitudes Survey, which was conducted in 38 countries during the first half of this year.
It's no cake walk for China, though. The world's No 2 economy has mixed reviews from South-east Asian countries, according to the poll. While just over half of respondents in Philippines and Indonesia viewed China favourably, 88 per cent in Vietnam reported unfavourable views.