In ancient times, the five-clawed dragon was the symbol of China’s emperor, the “Son of Heaven”. Four and three claws were for nobles and ministers, respectively, while two claws were for commoners. However, in China, while the dragon is a symbol of power, contrary to European tradition, benevolence and good fortune are also the dragon’s attributes. Certainly for the last thirty years China’s “good fortune” has been represented by double-digit growth and booming exports. But now the little dragons of Vietnam, Malaysia, Thailand and Indonesia are developing robust export oriented economies and the dynamics of Southeast Asian trade are changing. By George Lauriat, AJOT For the last thirty years, “Asian trade” has almost become synonymous with “China trade” with Japan, South Korea and Taiwan becoming a slot-filling addendum. Simply put, China’s been the “big dragon” of Asian trade, and everything else was secondary. It’s understandable, China’s role as the “factory to the world” has enabled the country to become the world’s largest exporter. However, over the last decade, investments in consumer-related light industry has flowed into the “little dragons” of Indonesia, Vietnam, Malaysia and Thailand. The reasons are myriad. In many cases, the investment is from “overseas Chinese” – extended Chinese families that have long lived in Southeast Asia. After investing in China, during the early days of the reform movement, they have re-invested back in their own regions. In other cases, China’s homegrown entrepreneurs have become hedging their bets with investments in Southeast Asia. Beijing’s “encouraging” its own investors to look “Westward” in China to build future industrial bases. The move is at once to both diversify the nation’s industrial geography by moving out of the Coastal regions, such as the greater Hong Kong-Guangdong and Shanghai regions and to simultaneously move higher up the technological ladder. Besides Asian investors, the opportunity to develop an industrial base outside of China has great appeal to Western companies. The advantage to investing in Southeast Asia is that the process is less bureaucratic than China. Secondly, it’s easier to get money out of the Southeast Asian nations rather than China. For many Westerners, it’s preferable to work in Vietnam, Malaysia, Thailand or Indonesia over China. There has already been a migration from China to Southeast Asia of lower-end factory related industries. Textile & footwear and other labor-intensive, low profit margins products had begun relocating in the 1990s. Besides Southeast Asian nations like Indonesia and the Philippines, South Asian countries like India, Bangladesh and Pakistan have now become major exporters of garments and footwear to the West. Southeast Asian merchandise export growthSoutheast Asia merchandise export growth [see chart] was strong even during the recession. However, in 2009, the roller-coaster ride of the post-recession economic recovery dampened export demand and FDI (Foreign Direct Investment). But in 2010 export growth hit nearly 30%, and even with the latest dip, is running at over 20% in 2011. For example, Vietnam’s export growth in September 2011 (latest figures) was still running at nearly 30%. Indonesia’s export growth for September was over 40%. Admittedly not everyone is doing well. The Philippines export growth of almost 34% in 2010 has fallen, and in September was down to over -27%. Even Singapore, the linchpin of trade for Southeast Asia, has watched a decline from over 30% growth in 2010 to around 14% in September. Still the comparison of Singapore to Hong Kong is favorable with the China entrepot growth off to -3.4%. The two trading ports also are integral parts of the larger trade puzzle, whose pieces are being laid out in the post-recession. With manufacturing shifting to Southeast and South Asia, ocean trade routes through the Suez Canal are more viable to US markets as well as those in Europe. In the US, the East Coast ports could be the beneficiaries of