That starts with the $40 billion Silk Road Fund announced late last year. But other investment avenues for infrastructure networks -- roads, railways, ports -- should come via the Asian Infrastructure Investment Bank (AIIB).
So AIIB may also be interpreted as an extension of China's export model. The difference is that instead of exporting goods and services China will be exporting infrastructure expertise, as well as its excessive domestic production capacity.
One of these projects is a railway from Yunnan province through Laos and Thailand to Malaysia and Singapore -- with Indonesia just a short trip away (where China is already battling Japan for the contract to build Indonesia's first 160 km high-speed rail between Jakarta and Bandung). China has built no less than 17,000 km of high-speed railway -- 55% of the world's total -- in only 12 years.
Washington is not exactly beaming at closer and closer Beijing-Bangkok relations. China, for its part, would like its ties with Thailand to be the prototype for relations with other ASEAN nations.
Thus, the eagerness of Chinese businesses to invest in ASEAN using Thailand as their regional investment hub. That's all about investing in nations with excellent potential to become Chinese production bases.
In the immediate future real economic integration is inevitable in mainland Southeast Asia. It is already possible to hit the road from Myanmar to Vietnam. And soon by rail from southern China through Laos to the Gulf of Thailand and through Myanmar to the Indian Ocean.
The labor market is increasingly integrated. There are five million people from Myanmar, Cambodia and Laos already working in Thailand -- most of them legally. Border trade is booming -- as institutionalized "borders" don't mean much in mainland Southeast Asia (as they don't mean much between Afghanistan and Pakistan, for example).
It's still a very open game though. It's about connectivity. It's about global production chains. It's about harmonized rules of trade. But most of all it's a tremendously high-stakes power play; who -- the US or China -- will eventually set the global rules on trade and investment.
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