The nations of Southeast Asia need to band together more closely economically or else American investment will continue to decline in the region as it flows ever more to China, an executive representing large American corporations said here on Sunday.

The trend of a sharp increase in American investment in China and a steady drop in Southeast Asia can be countered only if the region moves toward the integration of its 10 countries with a total population of 500 million, the executive, Ernest Z. Bower, the president of the U.S.-Asean Business Council, told a top business group meeting here.

The leaders of the Association of Southeast Asian Nations, or Asean, start arriving here in Bali on Monday for their annual meeting. The centerpiece of the gathering is expected to be the signing of an accord that lays out plans for an Asian economic community.

To fully integrate, Mr. Bower said, the Asean economic community will have to tackle issues of labor laws, customs and judicial reform in some countries.

But Asean, generally fearful of interference in the affairs of member nations, is famous for slow movement, and the question hovering over the economic integration plan is whether it can be achieved fast enough to make the region competitive with China.

In recognition of the problems, the business and investment summit meeting that opened Sunday was a first for Asean and was initiated in large part by the new secretary general, Ong Keng Yong, of Singapore.

The Indonesian president, Megawati Sukarnoputri, addressed the business leaders on Sunday, and said Bali was deliberately chosen as the site for the summit meeting to show that Indonesia would not be deterred by the terrorist attack here a year ago. Other leading members of Asean include Malaysia, Thailand and the Philippines.

Though China does not belong to Asean, it is represented at the meeting, less as a participant that is knocking on the door than as one that had already entered the house.

The 48-member delegation of Chinese business executives is the largest of any country, and China wanted to field an even bigger delegation, said Tanri Abeng, the head of the meeting's organizing committee.

The Chinese premier, Wen Jiabao, will be among three non-Asean leaders attending the summit meeting. The others will be Prime Minister Atal Bihari Vajpayee of India and Prime Minister Junichiro Koizumi of Japan.

Mr. Wen will sign a treaty of amity and cooperation with Asean, a pact that Beijing has advertised as a sign that China wants friendly, not threatening, relations with the region.

American companies have $52 billion invested in the region, compared with $12 billion for China and $54 billion for Japan, Mr. Bower said in an interview. The U.S.-Asean Business Council represents more than 400 of the largest American corporations that do business in Southeast Asia, including the major energy and telecommunications companies.

But Chinese investments are rapidly growing in Southeast Asia, he said. In some cases, Chinese companies are buying up Asian investments being sold by American companies, particularly in the power and telecommunications sectors in Indonesia.

At one of the seminars on Sunday, figures showed that in 2001 Asean members, with their combined population of 500 million, attracted only 1.7 percent of the available global foreign investment while China, with more than double the population, received 9 percent of the available investment.

And while this increase in trade with China was going on, many countries in Southeast Asia believed that the United States was preoccupied with terrorism in the region at the expense of everything else.

That is a "misconception," Mr. Bower said. He suggested that President Bush's planned trip to four Southeast Asian countries — Thailand, the Philippines, Singapore and Indonesia — in two weeks could help correct that view. No American president has visited as many as four countries in the region on one trip.

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