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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.
Keywords: ASEAN, China, BRI, infrastructure investments, suboptimization
Article received: April 2020; revised: December 2020; accepted: May 2021
Source of Support: Social Science Faculty Research Grant, Lingnan University (Reference Number: SSFRG/16/2/2)
1.Introduction
One of the major developments in international relations this century is China's "Belt and Road Initiative" (hereafter BRI). It is probably seen as the single-most grandiose global development strategy undertaken by China this century. Announced by President Xi Jinping in November 2013, BRI focuses on bringing together China, Asia, Russia, Middle East, Africa and Europe, linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia, connecting China with Southeast Asia and the Indian Ocean, encompassing both the land route and the sea route (Du and Zhang 2017). BRI covers as many as 150 countries, a total population of over 4 billion and a lion's share of global production. It is a grand public diplomacy plan for China to integrate with many countries and regions around the world.
Primarily, China has this ambitious plan to build infrastructure for its cooperating partners, including the constructions of roads, railways, ports, power plants, energy pipelines, production facilities, and so on, as well as to foster bilateral trade. Hence, BRI, from the viewpoint of the populace in...