The United States used to own the commercial and diplomatic franchise in Southeast Asia’s economic and political fate and fortune. Such is no longer the case. China has been on a rampage to steal the thunder from the US over the past few years. It has been quite a strategic move, in fact. It also has nothing to do with the global economic meltdown. China has been on a ‘soft power’ campaign over the region.

One of the most recent of such overtures is a new investment fund and loan package, trumpeted as timely means to ‘help alleviate the impact of the global financial crisis in the countries belonging to the Association of Southeast Asian Nations (ASEAN)’ – this, to the tune of US$10 billion investment fund to be used in cooperative projects in infrastructure construction, energy and natural resources development, and improvements in information and communications.

To top this, China also recently pledged another $15 billion credit line that can be availed of ‘over the next three to five years by needy ASEAN countries.’

Here is a list of the most recent strategic financial moves of China in Southeast Asia (apart from the upwards of $14 billion shelled out by the country for the ASEAN region from 2002-2007):

• $39.7 million “special aid” to Cambodia, Laos, and Myanmar (ASEAN’s poorest members and closest China allies) earmarked to meet these countries’ “urgent needs.”

• $5 million to the China-ASEAN Cooperation Fund

• $900,000 to the ASEAN plus China, Japan and South Korea cooperation fund

• 2,000 government scholarships and 200 Master’s scholarships for public administration students over the next five years from developing ASEAN countries

• 1,000 agricultural technicians to receive training in China over the next three years

• 300,000 tons of rice to an emergency East Asia reserve intended to boost food security

• China-ASEAN scheme to create high-quality, high-yield crop demonstration farms in ASEAN countries.

• A proposed China-ASEAN free-trade zone that would create quicker trade

China’s aid to Southeast Asia has now surpassed that of the US.

The “accelerated economic integration” aid packages come with a lot of perks for the Chinese economy, as well as political ambitions, such as:

• China’s trade with the 10-member ASEAN has nearly doubled from $105.9 billion in 2004 to $202.5 billion in 2007

• In spite of the rising effect of the global economic crisis, Chinese trade in ASEAN ‘accelerated’ in 2008 by 14% or the amount of US$231.12 billion. This makes ASEAN China’s fourth-largest trading partner

• There is now a general pro-Chinese sentiment in the region, making it easier for Chinese companies to secure contracts for natural gas exploration in Myanmar, large scale agriculture projects in the Philippines, and build transportation infrastructure in Thailand and Laos

• China has slowly repaired its image in the region via numerous ‘goodwill investments’ such as the construction of national stadiums, cultural centers, and friendship roads and bridges.

ASEAN’S magnanimous neighbor has also been increasing its naval might, making the maritime nations of Indonesia, Philippines, Malaysia, and Vietnam wary of China’s impending plans. China is also adamant in staking its claims on the fuel-rich Spratly Islands, claimed by the Philippines as within its territorial waters.

Which brings to light China’s real intention in Southeast Asia.

China’s improved relations with Southeast Asia, bought through ‘aid,’ have everything to do with the struggle for regional dominance that is still attributed to the US. As it is widely known, US strategic presence in Asia is very much due to its overwhelming presence in Southeast Asia. China’s soft power initiatives in the region, therefore, have slowly but surely stolen the dominant position from the US.

Dig even deeper and you’re bound to hit the real reason behind China’s generosity and magnanimity.

Southeast Asia is the most strategic geographical point in the potential US-China conflict. Much of ‘China’s oil and gas imports pass through the narrow Malacca Straits, a potential strategic chokepoint.’ There is also such a thing as the ASEAN Treaty of Amity and Cooperation. China is already a signatory in 2003 while the US isn’t, still. In the event of a US-China conflict, the ASEAN position is of crucial importance.

So, aid is never really just aid. In fact, aid has nothing to do with aid at all.