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The emergence of China as an economic powerhouse provides both challenges and opportunities to the Southeast Asian developing economies, the ASEAN countries. The paper analyzes the trade pattern and investment relationship between the two areas and tries to shed a light on the above issues. It is found that competition did exist between the two areas in world export markets for manufacturing goods and in attraction for foreign direct investment. On the other hand, the expansion of Chinese economy provides a brightly promising export market for ASEAN countries. The dramatic increase of exports of ASEAN to China in the past decade might indicate a very different picture of the so said “missing middle ” in economic globalization time, i.e., there could be a newly appearing niche for middle income countries in the “chain ” of world export market. The paper also discusses policy responses of ASEAN countries toward the impact of the newly emerged Chinese influence