Given
China’s heavy involvement in
Southeast Asia’s infrastructure market, the sanctions further complicate the region’s attempts to balance ties between their two most important partners. Most of the Chinese enterprises are state-owned and at the forefront of China’s global massive multi-year overseas infrastructure programme, including the
Belt and Road Initiative. The US move shows how its attitude towards China has hardened on all fronts as their
rivalry deepens.
Thus far, the US announcement has not elicited much reaction from regional capitals, except from the Philippines, even though one of the companies – the China Communications Construction Company (CCCC) – has a portfolio of projects in the region.
In
Indonesia, where President
Xi Jinping announced the Maritime Silk Road and the Asian Infrastructure Investment Bank back in 2013, CCCC was engaged in waterworks in central Java, a bulk carrier wharf project in Maluku, a power plant and a railway line in Sulawesi, and even reclamation in the Riau Islands.
In
Malaysia, its regional hub, CCCC is involved in the East Coast Rail Link project, a key piece in China’s belt and road plan. It is also building a railway line in Johor, a light rail transit in Klang Valley, highways, tunnel and underground works for a subway in Kuala Lumpur, and bridges in Johor and Sarawak. It is even engaged in dredging and reclamation projects in Malacca, Penang, and Johor Bahru. Since many of these projects are already ongoing, they are less likely to be upended.
In the
Philippines, however, CCCC is in more unsteady waters. A day after US Secretary of State Mike Pompeo’s announcement, his Filipino counterpart, Foreign Secretary Teodoro Locsin Jnr, said he would
recommend cancelling contracts with Chinese firms on the US list. Despite warmer relations in the past four years, weak absorptive capacity, problems with land acquisitions and bureaucratic delays have hampered the progress of Chinese-bankrolled projects in the country.
Compared with Indonesia and Malaysia, CCCC’s footprint in Philippine infrastructure remains modest. Its biggest break so far was a project to build an airport in Cavite. It also got a contract to dredge a port in Cebu.
A subsidiary, China Road and Bridge Corporation (CRBC), is also building bridges across the Pasig River in Metro Manila as part of a Chinese grant to the country. But its other engagements in a number of projects are still in the feasibility study stage. These include highways in Bicol, a bus rapid transit system in Metro Manila and a railway connecting Subic and Clark in the main island of Luzon.
