China woos Mekong states with loan pledges

Economy March 24, 2016 12:50

By Teo Cheng Wee,
Tan Hui Yee

4,487 Viewed

SINGAPORE - China will offer billions of yuan in preferential loans to five Asean countries along the Mekong river, while pledging deeper political, economic and social cooperation, in what analysts see as a move to win influence among Southeast Asian cou

The pledges were made yesterday (March 23) as Premier Li Keqiang met leaders from Thailand, Cambodia, Laos, Myanmar and Vietnam during the inaugural Lancang-Mekong Cooperation (LMC) Leaders' meeting.
The Sanya Declaration, named after the Chinese seaside resort where the meeting was held, contains 26 points, ranging from cooperating to fight non-traditional security threats like transnational crime and terrorism, to enhancing transport connectivity.
This comes after China's recent announcement that it would discharge double the quantity of water downstream from its Jinghong Dam until April 10. The goodwill gesture follows a request from Vietnam, which is experiencing a severe drought,together with Laos, Thailand and Cambodia.
One important goal of the Chinese moves is to increase trust between China and these countries, according to Beijing-based Southeast Asian expert Xu Liping.
"The South China Sea dispute has affected China's reputation in Asean," he said. "This is a way of cooperating on many fronts, not just in the traditional areas of trade, so that China can build trust."
He noted that China is stressing the similar interests it shares with the other countries along the Mekong River, long a contentious arena.
Called the Lancang in China, the river rises from the Tibetan plateau and runs through several countries before draining into the South China Sea. 
But Beijing's dam and hydroelectric projects upriver have long sparked complaints from its Asean neighbours because of their impact on water levels and the environment.
China is backing up its proposed cooperation with financial muscle.
Li announced that China will offer preferential loans of 10 billion yuan (US$1.54 billion) and credit lines of up to US$10 billion to fund infrastructure and improve connectivity among LMC countries. 
Some US$5 billion in loans will be specifically for industrial production capacity cooperation, Xinhua news agency reported.
The pledges were made in front of Asean leaders - Thailand's Prime Minister Prayut Chan-o-cha, Cambodia's Prime Minister Hun Sen, Laos' Prime Minister Thongsing Thammavong, Myanmar's Vice-President Sai Mauk Kham and Vietnam's Deputy Prime Minister Pham Binh Minh.
Observers, however, pointed out that the pledges lack details of actual implementation, choosing instead to mention most forms of cooperation in broad, vague terms.
One of the more specific suggestions is to enhance cooperation in sustainable water resources management through the establishment of a centre in China, which will involve technical exchanges, capacity building, drought and flood management, and data and information sharing, among others.
But Chaiyut Sukhsri, a technical adviser to the Thai National Mekong Committee, has expressed concern that this centre would duplicate rather than add value to existing cooperation arrangements, simply for the sake of creating a Chinese-led system.
"I cannot say I fully support it because there is already an existing system among the lower Mekong countries," he said.
"It might be good, but I'm concerned about the duplication of work that is ongoing."