EXECUTIVE SUMMARY

1. • The rise of China's power and influence had for a long time been re-garded as beneficent in general. The closeness between Southeast Asia and China has led to an expanding and tight relationship through infrastructure, investments and aid.

2. • However, as China's power and influence begin to be expressed through military might and growing assertiveness in its maritime claims, what was once regarded in Southeast Asia as a blessing is now looked upon by many as a threat.

3. • In the face of actual or potential Chinese competition, the Association of Southeast Asian Nations (ASEAN) sought regional economic integration and also concluded free-trade-area agreements with several of its leading trading partners, including China.

4. • Current debates speculate a bifurcated landscape for the Asia- Pacific region into competing U.S. and Chinese “spheres of influence.” The Chinese, in particular, have ascribed to the view that the U.S. sees China as a rival for leadership in the Asia-Pacific region. Many Southeast Asians, but not all, seem to agree with this view. • Although a united ASEAN will be in the interest of both China and the U.S., ASEAN's involvement in the Sino-American competition may have divided ASEAN. How irrevocably this division will be depends on the wisdom and skill of diplomats and decision-makers in China, the United States and ASEAN member-states.

5. • China's upward path cannot be guaranteed though. It is beset by problems such as the growing income gap; the widening development disparity between its coastal south-eastern provinces and the relatively neglected land-locked western ones; environmental pollution; pressure to uphold human rights, etc. These problems, which are many and difficult to resolve, render uncertain China's domestic and international destiny, including its future relations with Southeast Asia.

6. • China will have to weigh the costs of its increasing interests and ambitions in Southeast Asia. How China's rise in the region will further develop depends on the diplomatic, political, economic and military calculus of China's decision-makers and those of its neighbours and putative rivals.

INTRODUCTION: CHINA'S RISE

Perhaps future records of world history will show that the most significant development during the decade preceding and following the turn of the 21st century will be the rise of China in political, diplomatic, economic and military terms. Statistics support this notion. The most telling, and simplest, is the percentage increase in China's gross domestic product.