China Seeks to Improve Mekong Sub-regional Cooperation: Causes and Policies

Executive Summary

The Mekong sub-region has important significance in China’s peripheral diplomacy and regional cooperation strategy. The Greater Mekong Subregion Economic Cooperation Program (GMS-ECP) is one of the earliest and most effective regional cooperation programmes that China has participated in. However, after more than 20 years, the development of sub-regional cooperation is still hindered by bottlenecks in economic, political, social, and other fields that need to be jointly addressed by the relevant countries.

Since China put forward the Silk Road Economic Belt and 21^stCentury Maritime Silk Road Initiative in 2013, various signs indicate that China has been seeking to upgrade sub-regional cooperation. On 12 November 2015, China launched the Lancang-Mekong Cooperation (LMC). The author will analyse the causes for the upgrading and related policies, and offer three main reasons for the upgrading of the Mekong River cooperation. First, sub-regional economic cooperation has reached a higher level. In the context of a marked decrease of the marginal effect of lower tariffs, there is a need for an economic cooperation upgrade. Second, there is an urgent need for sub-regional economic cooperation to expand to include security, political and social fields. Third, China hopes to play a fuller and more dominant role within the sub-regional cooperation framework.

On China’s policy of upgrading the GMS economic cooperation, the author maintains the following:

• On strategy, China regards the upgrade of GMS-ECP as the early stage harvest of the “Belt and Road” Initiative.
• On tactics, China focuses on cooperation with Laos, Thailand and Cambodia.
• On mechanism, China actively promotes the development of LMC, a new sub-regional cooperation mechanism.
• On cooperation, China speeds up the infrastructural construction of the cross-border railway and seeks to promote the further development of law enforcement and security cooperation.

Additionally, China is devoted to the standardisation and transparency of foreign investment, development of sub-regional financial cooperation, and active facilitation of cultural exchanges and cooperation, among others. The author concludes that as China promotes the Mekong sub-regional cooperation, its efforts will be affected by some uncertain factors, but will also provide new development opportunities for the Lower Mekong River countries.

About the Author

Lu Guangsheng is professor at Yunnan University and currently a visiting senior fellow with the China Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. He was a visiting research fellow at East Asian Institute (EAI), National University of Singapore, and a visiting scholar at Victoria University of Wellington, New Zealand in 2010. His research focus is on international relations in the Southeast Asia and China’s economic relations with other countries in the Greater Mekong Sub-region (GMS). His publications include Economic Relations between China and Mainland Southeast Asian Countries (2014), Perimeter Security and Regional Cooperation in Southwest China: a Perspective of Geo-politics (2012), GMS Studies (2011), Regionalism and ASEAN’s Economic Cooperation (2008), Cambodia (2005, 2010, 2014), Invest in ASEAN (Vol. of Laos, 2009), and over 50 other journal articles and essays.