The Economic Rise of China: Challenges and Opportunities for ASEAN

This paper looks at the economic rise of China and its impacts and implications for the Association of South‐East Asian Nations (ASEAN) region. The issues of complementarities and competitiveness of ASEAN and China in trade and investment and the opportunities and challenges arising from China's emergence and the ASEAN‐China Free Trade Area are discussed. The message from China's emergence is clear and strong; it is that size does matter. To increase ASEAN competitiveness, the paper highlights the need for a deeper and more rapid economic integration of ASEAN in order to exploit scale economies. The important role of Japan in this process is highlighted. Finally the issue of ASEAN economic diversity is discussed. It is suggested that while ASEAN is fairly diverse, this should not be a critical stumbling block to a more rapid economic integration of ASEAN.