The signing of a US$50 billion deal to finance the Dawei project has accelerated Thai and Japanese efforts to turn this Burmese town into a major ‘distribution centre for the world", Reuters reports.

Dewei's road links to Thailand, Cambodia and Vietnam and deep draft harbour with easy access to global markets make it attractive to manufacturers.

Keen to access Mekong markets, manufacturers will want to plug into low labour costs and avoid shipping via the long detour through the Strait of Malacca to Europe, reports Lloyd's Loading List.

The three-way deal will see Dawei port be expanded to handle 250 million tonnes a year supported by a 200 square kilometres of special economic zone.

Announcing the deal, Thai Prime Minister Prayut Chan-o-cha claimed Dawei had the potential to become a new "distribution centre for the world".

Japanese Prime Minister Shinzo Abe said he was convinced the signing of the memorandum of intent on the Dawei Special Economic Zone would "create an opportunity to strengthen the economic partnership between Japan and Asean, and Japan and Thailand".