SOUTHEAST ASIA ON THE BRINK: China vs. America – Who WINS?

Under the second Trump administration, the United States dramatically reshaped its relationships with foreign nations, triggering sweeping changes in regional dynamics across the globe. Southeast Asia, already caught between the U.S. and China, now feels the intensifying pressure of competing superpowers and shifting foreign policies.

This tension is compounded by a growing rift within Southeast Asia itself, separating mainland nations drawn into China’s sphere of influence from their seaborne neighbors seeking to balance between Washington and Beijing.

To understand these complex dynamics, The Monitor spoke with Susannah Patton, Deputy Research Director at the Lowy Institute, a leading expert on Southeast Asian foreign policy and geopolitics. Patton, also the author of a recent Foreign Affairs article, “The Two Southeast Asias: A Divide Is Growing Between the Region’s Continental and Maritime Countries,” offered insights into the region’s evolving landscape.

Southeast Asia is remarkably diverse, encompassing eleven countries ranging from wealthy Singapore to sprawling democracies like Indonesia and the Philippines, and nations like Laos, geographically shadowed by China. This diversity extends to political systems, from communist regimes in Vietnam and Laos to the monarchy of Brunei and democratic nations.

A key regional organization is ASEAN, the Association of Southeast Asian Nations, a significant diplomatic grouping. While not as powerful as the European Union, ASEAN holds considerable importance compared to other regional bodies like SAARC or the Pacific Islands Forum.

Originally formed in 1967 by Singapore, Malaysia, Thailand, Indonesia, and the Philippines, ASEAN initially leaned towards the United States during the Cold War, wary of communism from China. Following the Cold War, the organization expanded to include Cambodia, Laos, Vietnam, Myanmar, and most recently, Timor-Leste, aiming to bridge the development divide within the region.

However, several trends have widened that divide. Growing physical connectivity between southern China and mainland Southeast Asia has fostered deeper economic ties. Historically, mountainous terrain acted as a barrier, but rapid economic development, including high-speed rail connections like the one between southern China and Laos, is blurring national boundaries.

In Laos, these connections have created special economic zones where illicit activities flourish, and Myanmar exhibits similar trends, with China maintaining access to vital oil and gas pipelines despite ongoing civil conflict.

Vietnam, historically wary of Chinese investment, is now seeing a shift, particularly following trade wars that prompted supply chain relocations. The greenlighting of a China-funded rail connection between northeastern Vietnam and China signals a potential turning point.

Conversely, maritime Southeast Asia, geographically distant from China, remains open to a wider range of partners, including the U.S., Japan, Australia, India, and South Korea, attracting diverse investment and interest.

This divergence suggests a future where mainland Southeast Asia could become increasingly influenced by China, while maritime Southeast Asia maintains its independence.

For maritime and near-maritime nations hedging between the U.S. and China, this strategy involves selectively working with both powers where it aligns with their interests. Non-alignment, avoiding choosing sides, is a core principle, reflecting Southeast Asia’s historical benefit from the open trade order.

Malaysia exemplifies this hedging approach, seeking partnerships with both the U.S. and China. Despite current U.S.-Malaysia tensions stemming from the Israel-Hamas conflict, Prime Minister Anwar is actively encouraging U.S. engagement in the region.

The Trump administration’s policies, particularly tariffs, have impacted Southeast Asia’s trade-dependent economies. While the region avoided the most severe tariffs, the perception of unfair negotiations and concerns about future sectoral tariffs remain. Cuts to USAID funding have had a mixed impact, affecting long-term U.S. soft power but less immediately impacting bilateral relationships.

The U.S. maintains a strong defense and security cooperation with the Philippines, a key alliance that has remained relatively stable. However, the broader trend suggests a potential decline in U.S. engagement and influence in the region.

Southeast Asian nations are unlikely to mediate the U.S.-China relationship directly, as they prioritize maintaining regional stability and avoiding being drawn into great power competition. While ASEAN once aimed to provide a forum for superpower dialogue, increasing polarization has diminished that role.

Instead, Southeast Asian nations could focus on defining the region’s character, establishing norms for superpower behavior, and fostering consensus among regional actors.

Looking ahead, Southeast Asia may see a region increasingly shaped by China’s influence, with the U.S. playing a more limited role. This shift could prompt Southeast Asian nations to seek partnerships with other countries like Japan, India, and Australia to maintain a balance of power.

China’s Belt and Road Initiative has significantly impacted mainland Southeast Asia, fostering deeper economic ties. While maritime nations prioritize internal connectivity, China’s investments in infrastructure projects, though sometimes financially questionable, are reshaping the region’s landscape.

Public sentiment towards China is generally positive, reflecting admiration for its economic development and technological advancements. Attitudes towards the U.S. are more mixed, particularly in Muslim-majority countries, and diverge from elite opinion, which generally favors the U.S.

To address concerns about China’s expansion in the South China Sea, the U.S. and its allies should support Southeast Asian claimant states, encourage regional cooperation, and uphold international law. While preventing China’s gains entirely may be difficult, these actions are crucial for preserving regional stability and the rules-based order.