Floating in the Course of the ASEAN Economic Community and the Rise of China: The Case for Myanmar-Chinese Small and Medium Enterprises

Abstract

This chapter focuses on Myanmar’s economic relationship with the Association of Southeast Asian Nations (ASEAN) based on multilateral trade agreements and integration through the ASEAN Economic Community (AEC). Whereas the relationship with China is driven by preferential trade, institutional finance, and regional expansion policies-including the One Belt One Road Initiative and establishment of the Asian Infrastructure Investment Bank will both have a significant impact on Myanmar’s economy. A perception survey and interviews of business owners in two cities provides some insight into the perceived impacts of the AEC and the rise of China. Small and medium enterprises (SMEs) have varying responses based somewhat on the industry they are in. The case studies give insight into the direct effects of labor, supply and competition among SME owners, and provide some coping strategies that include identifying new suppliers, increasing labor payments to retain skilled laborers, developing modern operating systems, and building customer loyalty.