BACKGROUND

It is fortunate that Southeast Asia is politically stable, enabling an environment conducive for regional cooperation and progress towards regional integration. However, while the spirit of regional cooperation is strengthening, the reality is that political and economic disparities exist among nation states in the region, and in general, institutional weakness continues to retard social progress, development and even social relations. Adding to that, as a consequence, it has been evident that Southeast Asia suffers from a high level of poverty which has worsened after the Asian economic crisis in 1997, the slowdown of Japan's and the United States’ economies which the region is highly dependent on for export. In addition, it seems that more and more foreign direct investment is going to the region's largest neighbour, China, due in part to its large consumer market and competitive labour market. Now that the economy of the region is somewhat recovering from the crisis and the political environment is encouraging for regional market development, it is fitting that member countries of the region work together with their neighbours to improve regional competitiveness and reduce dependency on external markets and capitals.

This chapter looks at a specific area of cooperation which China could be very influential in promoting the interest of the common good for the region, for example, the ASEAN-China Economic Cooperation for the Greater Mekong Sub-Region (GMS). The central point of this chapter is that developing ASEAN-China relations is necessary for mutual benefit but this cooperative relation should not turn out to be simply that of a core and peripheral relationship. Rather, this cooperative relationship between ASEANChina on GMS economic cooperation should be that of mutual partnership.

Naturally, given the economic and political rise of Southeast Asia's biggest neighbour, the People's Republic of China, it is only rational that member countries of the region welcome the rapid economic growth of China, its manufacturing and output capacity, technological development and financial power. The hope is that the ASEAN-China Cooperation will be fruitful for the collective good of the region. The rise of China can bring positive changes to the economies of Southeast Asia through trade, investment, and the flow of goods across borders and cooperation in non-traditional security.