China Is Squeezing Southeast Asia
China's economic expansion is having a suffocating effect on Southeast Asia, despite the region being a priority for Chinese investment and trade. The China-ASEAN Free Trade Agreement 3.0 has deepened the region's integration with China, but trade deficits and struggling local industries have raised concerns about the impact of Chinese economic gravity.
China's rise has made Southeast Asia a key target for development opportunities. The region has attracted $126 billion in Chinese investment in the last decade and become China's largest trading partner. However, trade deficits have ballooned, and local industries struggle against underpriced Chinese goods. Chinese investment has not created opportunities for Southeast Asia to grow, due to the reliance on supply chains back home. The region's weak rule of law and regulatory capture have also contributed to the problem. As a result, Southeast Asia is experiencing a 'second China shock,' with local resistance and public unrest surging.
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