Trade deals hit home on a recent trip to Southeast Asia

China’s expansion in that and other regions poses a challenge to U.S. policy.

Tom Hoban

Tom Hoban

A recent trip to Southeast Asia — with stops in Hong Kong, Thailand, Cambodia and Malaysia — revealed just how pervasive Chinese expansion into those areas has become. The internal protests in Hong Kong that started in June and have carried on since are illustrative of a broader reaction to Chinese muscle showing up in that part of the world. China’s presence feels almost like an Asian version of our own 19th century Manifest Destiny. Left unchecked, experts expect China will control a great deal of the South China Sea and, by extension, most trade in that part of the world.

There’s a two-way street at play, though, as most of these Southeast Asian countries are emerging markets where everything seems to be for sale. China is a nearby cash-rich buyer. So in the absence of some balance of power or other support, powerful elements inside of these countries are eager to make deals happen and eventually cede effective control over commerce and institutions in this part of the world through what analysts refer to as hegemonic stability.

Feelings are mixed when Chinese capital shows up. Development and jobs are a good thing. But Chinese nationals are culturally unique and in most cases not interested in adopting local language or religious traditions that run deep in the region — creating what feels like a segregated society in some areas, where little of the benefit of these massive investments into developing new ports, resorts and the like spills into local hands.

The 2016 Trans-Pacific Partnership (TPP) was an attempt to strengthen U.S. trade in the region and create an offset to China’s ubiquity. But it was rather unpopular in the U.S. because it fed into trade imbalances and was scrapped by President Trump. Everyone is waiting to see what replaces it with some eagerness. In that vacuum, China keeps buying.

What is clear is that the behavior of China and desire of its citizens to invest outside of the country will likely define Southeast Asia and probably the global economy in our children’s lifetimes. They are not focusing only on SESoutheast Asia, after all. Africa, Central America and almost every corner of the world are feeling China’s presence in one form or another.

Current U.S. moves today to rebalance trade deals while we have some leverage and to get at some of the prickly elements of how the Chinese do business are cumbersome and painful, but they are likely to have a major impact on how this plays out for decades to come. Notwithstanding the occasional remark or tweet from President Trump, the U.S. is still viewed favorably as the protector of human rights and freedom to common folk in this region of the world. A Malaysian businessman in one of my meetings said that given a choice, he and many Southeast Asians might prefer that the U.S. win out, or at least exert itself more aggressively, in their economies. Settling the trade negotiations between the U.S. and China and then turning attention to replacing TPP seem to be the next moves.

Columnist Tom Hoban is chairman and co-founder of Hoban Family Office, a real estate investment and services enterprise in Everett.

Talk to us

More in Herald Business Journal

FILE- In this Sept. 30, 202, file photo, a Boeing 737 Max jet, piloted by Federal Aviation Administration (FAA) chief Steve Dickson, prepares to land at Boeing Field following a test flight in Seattle.  (AP Photo/Elaine Thompson, File)
European aviation agency: 737 Max to be cleared next week

The review of the aircraft “began with the MCAS but went far beyond.”

Garry Clark
Economic Alliance Snohomish County names new CEO

After nationwide search, Garry Clark, a Nebraska business advocate, will take the helm in February.

FILE - In this Wednesday, Nov. 18, 2020 file photo, workers stand near a Boeing 737 Max airplane parked at Renton Municipal Airport next to the Boeing assembly facility in Renton, Wash., where 737 Max airplanes are made. On Tuesday, Jan. 12, 2021, the company reported final 2020 numbers for airplane orders and deliveries, and they are down from 2019 even though the 737 Max is flying again. (AP Photo/Ted S. Warren)
Canada OKs return of Boeing 737 Max aircraft

The planes will be permitted to fly as long as they meet specific safety conditions.

Snohomish Delivers concierge Sarah Dylan Jensen picks up tea from Everything Tea on Tuesday, Jan. 5, 2020 in Snohomish, Wa. (Olivia Vanni / The Herald)
A Snohomish service brings goods from the store to your door

Developed by the city, Snohomish Delivers encourages online shoppers to look local. And it’s free.

Arthur Sepulveda, 32, has been looking for his first home since July. He put in bids for four houses and finally found one last month in Lynnwood directly from the builder. (Kevin Clark / The Herald)
Low mortgage rates fuel a frenzied, revved-up housing market

Home prices are soaring and bidding wars are back, and Snohomish County “Zoom towns” are hot locations.

Adam Ling works securing rebar reinforcement for a set of stairs on Tuesday, Jan. 5, 2020 in Lynnwood, Wa. (Olivia Vanni / The Herald)
With lots of people working at home, a rush for renovations

Homeowners with remodeling plans are keeping local contractors busy. Winter hasn’t slowed them down.

FILE - In this Wednesday, Nov. 18, 2020 file photo, workers stand near a Boeing 737 Max airplane parked at Renton Municipal Airport next to the Boeing assembly facility in Renton, Wash., where 737 Max airplanes are made. On Tuesday, Jan. 12, 2021, the company reported final 2020 numbers for airplane orders and deliveries, and they are down from 2019 even though the 737 Max is flying again. (AP Photo/Ted S. Warren)
Boeing deliveries drop despite 737 Max’s return to flight

The company has borrowed billions and cut thousands of jobs to reduce costs.

Kim Williams, CEO of Providence Regional Medical Center Everett and Providence Northwest, will retire July 1. (Olivia Vanni / The Herald)
Kim Williams, the local Providence CEO, will retire July 1

She was born at Providence in Everett and leads the health care provider’s northwest Washington group.

FILE - In this Wednesday, Dec. 11, 2019 file photo, a United Airlines Boeing 737 Max airplane takes off in the rain at Renton Municipal Airport in Renton, Wash. Boeing improperly influenced a test designed to see how quickly pilots could respond to malfunctions on the Boeing 737 Max, and Federal Aviation Administration officials may have obstructed a review of two deadly crashes involving the plane, Senate investigators say. In a report released Friday, Dec. 18, 2020 the Senate Commerce Committee also said the FAA continues to retaliate against whistleblowers.(AP Photo/Ted S. Warren, File)
Boeing to pay $2.5B to settle criminal charge over 737 Max

The settlement includes money for crash victims’ families, airline customers and airlines, and a fine.

Britt Morgan, left, who manages the Scriber Creek Apartments and twin sister Rachel Morgan, who manages the Madison Way Apartments on Wednesday, Dec. 30, 2020 in Lynnwood, Wa. (Olivia Vanni / The Herald)
Twin bridges in the challenging landlord-tenant relationship

When the rent is unpaid, property owners and lessors look to Rachel and Britt Morgan for help.

FILE - In this June 12, 2017, file photo, a Boeing 787 airplane being built for Norwegian Air Shuttle is shown at Boeing Co.'s assembly facility, in Everett, Wash. Boeing is dealing with a new production problem involving its 787 jet, in which inspections have found flaws in the way that sections of the rear of the plane were joined together. Boeing said Tuesday, Sept. 8, 2020, it's not an immediate safety risk but could cause the planes to age prematurely. (AP Photo/Ted S. Warren, File)
Boeing Dreamliner’s defects spur $7.5 billion cash drain

The company intends to repair 787 planes at its factory in Everett

The Rucker Renewal Project is complete but the COVID closures still hamper businesses along the thoroughfare in Everett.  (Kevin Clark / The Herald)
Bad soil, concrete and COVID added to Rucker project costs

Change orders for the project added nearly $2 million to the project’s original $9.5 million budget.