returned to power. China was pointed in a new direction in which
economic development took precedence over revolution. And in
Southeast Asia, the PRC was effectively allied with ASEAN against
the reunited Socialist Republic of Vietnam (SRV).
Following America’s defeat in the Second Indochina War, the
late 1970s not only saw Cambodia and Laos become communist, but
also witnessed a marked shift in superpower influence in Southeast
Asia. As the United States withdrew from continental Southeast Asia
to its sole remaining bases in the Philippines, its place was temporarily
taken by the Soviet Union, which established a strong military pres-
ence in Vietnam. This change in the strategic balance was exacerbated
by Vietnam’s invasion of Cambodia in December 1979, a move viewed
with considerable alarm, especially by Thailand.
Throughout the 1980s Southeast Asia was deeply divided, with
the ‘Indochina Bloc’ of Vietnam, Laos and Cambodia on one side,
backed by the Soviet Union, and the ASEAN countries on the other,
supported by China and the United States. The issue was resolved
through Moscow’s change of direction towards reconciliation with
China, reduction in its global commitments, and internal reform
(leading in 1991–92 to the collapse of communism and dismember-
ment of the Soviet Union). Vietnam’s withdrawal of its forces from
Cambodia and Laos in 1989 was followed by normalisation of relations
with China. In these events, insofar as they pertained to Southeast
Asia, Beijing played a key role, which saw its political influence in the
region increase dramatically.
In the 1990s, as globalisation gained momentum, economics
replaced politics as the principal focus of attention. China’s ‘four mod-
ernisations’ (in agriculture, industry, science and technology, and the
military), inaugurated in the early 1980s, bore fruit in the form of
double-digit economic growth. Projections even suggested that China
would pass the United States as the world’s largest economy early in
the twenty-first century. This rapid economic development was fuelled
by massive foreign investment, much of it coming from Taiwan and
A Short History of China and Southeast Asia