Southeast Asian nations need to band together more closely economically or else US investment will continue to decline in the region as it flows ever more to China, an executive representing large American corporations said in Bali on Sunday.
The trend of a sharp increase in American investment in China and a steady drop in Southeast Asia can be countered only if the region moves toward the integration of its 10 countries with a total population of 500 million, the executive, Ernest Bower, the president of the US-ASEAN Business Council, told a top business group meeting.
ASEAN leaders started arriving in Bali yesterday for their annual meeting.
The centerpiece of the gathering is expected to be the signing of an accord that lays out plans for an economic community.
To fully integrate, Bower said, the ASEAN economic community will have to tackle issues of labor laws, customs and judicial reform in some countries.
But ASEAN, generally fearful of interference in the affairs of its member nations, is famous for slow movement, and the question hovering over the economic integration plan is whether it can be achieved fast enough to make the region competitive with China.
In recognition of the problems, the business and investment summit meeting that opened Sunday was a first for ASEAN and was initiated in large part by the group's new secretary general, Ong Keng Yong of Singapore.
Indonesian President Megawati Sukarnoputri addressed the business leaders on Sunday, and said Bali was deliberately chosen as the site for the summit meeting to show that Indonesia would not be deterred by the terrorist attack here a year ago.
Though China does not belong to ASEAN, it is represented at the meeting, but less as a participant that is knocking on the door than as one that has already entered the house.
The 48-member delegation of Chinese business executives is the largest of any country, and Beijing had proposed sending an even bigger delegation, said Tanri Abeng, the head of the meeting's organizing committee.
Chinese Prime Minister Wen Jiabao (
Wen will sign a treaty of amity and cooperation with ASEAN, a pact that Beijing has advertised as a sign that China wants friendly, not threatening, relations with the region.
American companies have US$52 billion invested in the region, compared with US$12 billion for China and US$54 billion for Japan, Bower said in an interview.
The US-ASEAN Business Council represents more than 400 of the largest American corporations that do business in Southeast Asia, including the major energy and tele-communications companies.
But Chinese investments are rapidly growing in Southeast Asia, Bower said. In some cases, Chinese companies are buying up Asian investments being sold by US companies, particularly in the power and telecommunications sectors in Indonesia.
At one of the seminars on Sunday, figures showed that in 2001 ASEAN members, with their combined population of 500 million, attracted only 1.7 percent of the available global foreign investment while China, with more than double the population, received 9 percent of the available investment.
And while this increase in trade with China was going on, many countries in Southeast Asia believed that the US was preoccupied with terrorism in the region at the expense of everything else.
That is a "misconception," Bower said.
He suggested that US President George W. Bush's upcoming trip to Thailand, the Philippines, Singapore and Indonesia could help correct that view. No American president has visited as many as four countries in the region on one trip.
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