Section Introduction by

Summary

Southeast Asia has often had to react to developments taking place in the world outside. International tensions played an important role in the formation of ASEAN in the late 1960s. In recent years, the influence of global changes has intensified. On the economic front, Prema-Chandra Athukorala and Archanun Kohpaiboon talk about the emergence and subsequent deepening of global production networks further integrating a number of Southeast Asian economies with major East Asian manufacturing powerhouses such as Japan, South Korea and Taiwan. ASEAN's goal of establishing a single market and production base reflects the importance it attaches to the integrating of its economies into the global production network. Be that as it may, as Hal Hill has pointed out, the convergence and integration of ASEAN economies is still an on-going and slow process. This has not, however, prevented ASEAN from creating cooperative mechanisms, processes and institutions aimed at mitigating risks from external shocks such as the Global Financial Crisis in 2007/2008. This is discussed by Jayant Menon and Aekapol Chongvilaivan, and Jayant Menon and Thiam Hee Ng.

Another important development, which is debated by Razeen Sally, is the rise of China as a major global economy since the 1990s. This has had significant impact on trade and foreign direct investments (FDI) in Southeast Asia. For one thing, Southeast Asian countries is now more dependent on trade with China, whilst the two at the same time have become competitors in attracting FDI. Ja Ian Chong analyses the rise of China from a geo-strategic and political perspective. The rise of China has also increased tension between China and Japan, and between China and the United States. The maritime disputes over the South China Sea and the Diaoyu/Senkaku Islands have further compounded the problem. ASEAN's responses to these challenges have included economic-oriented initiatives, such as the establishment of the ASEAN-Japan free trade agreement and the American-led Trans-Pacific Partnership Agreement. Chien-Peng Chung argues how cooperation and rivalry between these countries have also been played out in various ASEAN-based multilateral forums, such as the ASEAN Regional Forum and the ASEAN Plus Three.

Southeast Asian countries will continue to respond to external forces in the future — both individually and collectively. The challenge they face is one of finding space to shape their separate destinies whilst functioning within a regionally integrative context. ASEAN centrality is a manifestation of this balancing act.