For several decades much of south-east Asia has sought to slipstream China’s economic miracle — and with considerable success. But such is the scale of Chinese manufacturing, the region is now questioning whether its hopes of developing its own globally competitive industries are being dashed.
South-east Asia faces not so much a “China shock” as a “China squeeze”, says Arvind Subramanian, a former chief economic adviser to Indian prime minister Narendra Modi. Beijing, he warns, risks suffocating the region’s long-term aspirations with its excess exports of low and high-tech goods.
“It is squeezing out space for all the developing countries poorer than itself in these low-skilled sectors,” he told an IMF conference in Bangkok in March. “So the ‘Asia model’ that China, Korea, and Taiwan benefited from is now being squeezed out more and more.”