When Laos won its bid to host last month's South-East Asian Games, China offered to help the tiny nation by building a gleaming new venue on the outskirts of the capital Vientiane. The facility included a “natatorium” for swimming and a stadium for soccer. But for the Laotian government, such generosity would not come cheaply.
China's Suzhou Industrial Park Overseas Investment Co was promised a 50-year lease on 1,600 hectares of land on the outskirts of the capital in return for building the venue. But an exceptional public backlash, fuelled by news that the Chinese intended to bring in 3,000 labourers to do the job, forced the government to cut the size of the concession to 200 hectares and promise to find extra land elsewhere to compensate for the loss.
The episode illustrates both the gravitational pull exerted by China's economic and strategic might, drawing the nations of continental south-east Asia into a tighter orbit, and the countervailing tensions that are becoming apparent as a result. Economic and diplomatic imperatives are starting to clash with nationalist fears of becoming – in many cases not for the first time – satellites of Beijing.
In Vietnam, Chinese plans to mine bauxite have run into heavy public criticism; in Cambodia, farmers and fishermen are worried that their land and water are being bought up; even in Burma, which has few other friends, China's growing stature and self-confidence are being watched with a degree of trepidation.
It is not just within the region that there are worries. For years, south-east Asia has provided a cheap and dependable reservoir of labour for international manufacturers. While western investors struggle to make a profit in China, the fat margins on Vietnamese T-shirts or Malaysian hard drives have boosted many a multinational's balance sheet.
The threat to the delicate regional balance is being taken increasingly seriously both within Asia and outside, particularly given a flurry of recent arms purchases by Vietnam, Thailand and Burma: all countries where the military sit close to the centre of political power.
The fears on the streets of Asian capitals and in the boardrooms of the west have forced the governments of the region into a delicate balancing act. Given China's sensitivity to criticism, they are having to tread a fine line between placating the concerns of their citizenry and keeping Beijing on side, while also reassuring investors. “There is a difference between what the politicians say in public and what the population feels,” says Malcolm Cook at the Lowy Institute for International Policy in Sydney.
In many ways, China's proximity is a blessing for its neighbours. In the longer term, the rise of China as a power has given south-east Asia a renewed geostrategic relevance in keeping with its economic heft. The 10 members of the Association of South East Asian Nations comprise nearly 600m people and have a combined gross domestic product of some $1,500bn (€1,065bn, £925bn).
When Hillary Clinton stood on a podium at an Asean summit in Thailand last year and told her audience, “We're back,” her immediate reference was to the wilderness years of US foreign policy under the administration of George W. Bush. But for many, America's south-east Asia policy has been in a torpor for almost two decades. Jim Webb, Democratic chairman of the Senate subcommittee on east Asian and Pacific affairs, this week described the region as “a long-overlooked area of our foreign policy, rooted in the often contradictory standards we have used in the past and still use today in defining the underlying parameters of our relationships with different countries and different governmental systems”.
