China’s economic rise in Southeast Asia may have been unstoppable, but Washington has done itself no favors in the competition for economic influence.
Over the past five years, Beijing has adopted a much more assertive military and diplomatic approach in Southeast Asia, as it has in many other parts of the world. It has stepped up its militarization of the South China Sea as well as its use of fishing vessels—and even troops—to keep fishing boats from Southeast Asian states from operating in regional waters. It has increasingly menaced Taiwan, and its diplomats around the world have adopted an aggressive, sometimes bullying “wolf warrior” style of diplomacy.
While one could reasonably expect this to negatively affect China’s standing in the region, the opposite is the case. According to a striking and comprehensive new study by the Australian think tank the Lowy Institute, China’s influence in Southeast Asia has soared in the past five years. Not only that, but China’s rising influence has come largely at the expense of the United States, which is seeing its own influence rapidly ebb in one of the most vital arenas of competition between Beijing and Washington.
The Lowy Institute’s report, titled, “Asia Power Snapshot: China and the United States in Southeast Asia,” used a variety of indicators to rank the two countries’ regional influence across four categories: economic relationships, defense networks, diplomatic influence and cultural influence. It concludes that the U.S. “has lost influence to China in Southeast Asia over the past five years in all four.” Similarly, a recent study by the ISEAS Yusof-Ishak Institute in Singapore found that a majority of respondents in a poll found that China was now the most dominant economic and political-strategic power in Southeast Asia.
By the Lowy report’s metrics, of the 10 countries in the Association of Southeast Asian Nations, the U.S. is the most influential power in only two: the Philippines, which is a U.S. treaty ally, and Singapore, which is a staunch U.S. partner. Even in these states, Washington only barely finishes on top. In Thailand, another U.S. treaty ally, China is now more influential. The ISEAS polling shows that respondents in every ASEAN state thought that China is now the most influential economic power in the region, and a majority of respondents in ASEAN states thought that China now exercises the most political and strategic influence in the region, too.
By contrast, in a prior Lowy Institute study from 2018, the U.S. was the most influential country in three countries in the region, and Washington and Beijing came out evenly in Thailand.
Notably, the U.S. is hemorrhaging influence despite the fact that many states in Southeast Asia, like Vietnam, Malaysia and Indonesia, are clearly terrified of China’s more assertive military actions. This fear is reflected in the Lowy study’s finding that the U.S. remains the dominant military power for many Southeast Asian states, although Washington is slipping in this measure as well. Indonesia and Vietnam have opted for somewhat closer military cooperation with the U.S. in recent years, though they have remained careful not to antagonize Beijing in doing so. The Philippines, which as a U.S. treaty ally has been more willing to openly align with Washington, has allowed the Pentagon to access multiple new bases in the country that would be critical in case of a war over Taiwan, despite the inevitable Chinese blowback. But with the exception of Manila, even though other regional states fear China’s military muscle, they increasingly accept Chinese dominance.
This is in large part because China has achieved such massive economic dominance in the region that Southeast Asian countries increasingly feel they have no choice but to side with Beijing. The Lowy study notes that in 2022, “U.S. economic relationships were weaker than those of China in every country of Southeast Asia.” In addition to trade and investment, Beijing has increasingly stepped up as a lender of last resort when countries in Southeast Asia and other parts of the world have found themselves in debt and economic crises. The U.S. once helped organize massive economic rescues of various countries from Thailand to Indonesia, but it is a role that Washington has shied away from in recent years.
Even Malaysia—where recently elected Prime Minister Anwar Ibrahim, a veteran advocate for democracy, has a long relationship with the U.S.—has increasingly turned to Beijing and away from Washington, because of China’s outsized aid and investment in the country. Moreover, like other countries such as Thailand, Malaysia is increasingly buying Chinese arms, suggesting China’s military and economic rise are now working in tandem. Indeed, the Lowy report showed that the U.S. lost more influence in Malaysia between 2018 and 2022 than in any other country in Southeast Asia.
China’s economic rise in what amounts to its neighborhood may have been unstoppable, but Washington has done itself no favors in the competition for economic influence. For the past five years, Beijing has continued to harness itself to the region’s economic integration, joining massive regional trade deals and developing some of its own. In that time, Washington withdrew from trade deals involving Southeast Asian states, like the Trans-Pacific Partnership, and has more generally withdrawn from the region’s economic integration efforts altogether.
In a weak attempt to demonstrate that Washington remains economically engaged in regional trade patterns, the administration of President Joe Biden has proposed the vague Indo-Pacific Economic Framework, or IPEF, for the region. Yet the IPEF comes with minimal to no commitments from Washington when it comes to U.S. market access for Asian states. As a result, the U.S. plan is seen by many in Southeast Asia as stingy and unserious, compared to the binding intraregional trade deals they are signing among themselves as well as with China and Northeast Asian states. At the same time, Washington’s increasing use of industrial policy to push foreign countries to invest in the U.S. angers many, not only in Southeast Asia, but also in Northeast Asia, where there are fears U.S. protectionism will damage critical Korean and Japanese industries.
The Biden administration’s focus on rights and democracy in the region, too, has mostly fallen on deaf ears and probably alienated some Southeast Asian leaders. Indeed, it has had little effect in a region where most countries are autocracies or semi-autocracies. This focus on rights may have also contributed to China’s gains in cultural influence in the region, aided by Beijing’s massive spending on soft power and sharp power efforts in the region.
The U.S., then, has a choice. It can continue its current approach and continue to lose influence, or it can rethink how it is engaging with the region. In doing so, U.S. policymakers should keep in mind that Southeast Asia would be critical to U.S. efforts to deter a Chinese invasion of Taiwan and impose economic costs on Beijing in the event deterrence doesn’t work.
But maintaining the status quo is not an attractive option. As the Lowy and ISEAS reports show, Washington’s close friends in Southeast Asia are growing more distant, a costly trend for the United States that could become a dangerous one in the future.
Source : Council on Foreign Relations
