Political-economic Suboptimization of China's Belt and Road Initiative: The Case of Infrastructural Investments in Southeast Asia

Research output: Journal PublicationsJournal Article (refereed)peer-review

Abstract

This paper shows that the Association of Southeast Asian Nations (ASEAN) benefits significantly from investments in transport infrastructure such as road, railway and port, but not as much from investments in non-transport infrastructure such as real estate. However, using data collected from several sources, including secondary data on the number of infrastructure projects already invested and earmarked to be invested as well as China’s direct foreign investment to Southeast Asia, this analysis shows that non-transport infrastructure constitutes a substantially higher proportion of the total infrastructure investments in Southeast Asia than transport infrastructure since the launch of the Belt and Road Initiative (BRI). This points to a suboptimization polemic emanating from the mismatch between the inflows of the different types of infrastructure investments and ASEAN’s need for these inputs for sustainable economic growth. Domestic disharmony, regional rivalry and political conflicts between China and ASEAN as well as other obstacles such as the debt-trap worries reduce the total investment flows to Southeast Asia, exacerbating the suboptimization problem.
Original languageEnglish
Pages (from-to)244-262
Number of pages19
JournalJournal of Southeast Asian Economies
Volume38
Issue number2
Publication statusSubmitted - 2019

Bibliographical note

Source of Support: Social Science Faculty Research Grant, Lingnan University (Reference Number: SSFRG/16/2/2)

Keywords

  • ASEAN
  • China
  • BRI
  • infrastructure investments
  • suboptimization

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