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Chinese leader Xi Jinping’s recent visit to three Southeast Asian countries drew widespread headlines — not only for diplomatic pageantry but also for its timing. The visit came on the heels of President Donald Trump’s announcement of a sweeping “reciprocal tariff” policy, which disproportionately affects Southeast Asian economies. Media coverage of Xi’s trip largely focused on Beijing’s attempts to capitalize on Washington’s recent missteps. Mostly undiscussed was the region’s longer-term reality: China has already entrenched itself as the predominant power in Southeast Asia, a region Beijing has long regarded as vital to its political and strategic survival.

This view was reaffirmed during the Chinese Communist Party’s April 8 Politburo Work Conference on Neighboring Relations, occurring just before Xi’s tour. Last held in 2013 shortly after Xi assumed power, the conference aimed to send a clear message that stable, friendly ties with Southeast Asia are not only a foreign policy priority but a prerequisite for China’s long-term development strategy. As the latest conference revealed, Beijing puts a great deal of emphasis on framing deepening ties with neighboring countries — including those in Southeast Asia — over the past decade as one of its greatest foreign policy successes.

For China — flanked by U.S. allies and far removed from Indian Ocean sea lanes critical to its trade and energy flows — all roads lead through Southeast Asia. The region is Beijing’s route to achieving security, economic resilience, and geopolitical influence. This strategic imperative is not new — during the Cold War, the Chinese Communist Party supported communist movements across Southeast Asia to shape the region’s postcolonial order. What’s different in post-Cold War Asia is Beijing’s pursuit of that vision through an adaptive, integrated, and consistent strategy utilizing all aspects of national power.

A powerful China is now an unassailable assumption in the calculations of every Southeast Asian country, influencing decisions ranging from infrastructure and trade to security and governance. Southeast Asia’s long-standing hedging strategy is beginning to falter under the weight of intensifying Chinese influence and an increasingly declining U.S. presence and isolationist Washington. The region’s strategic autonomy is under threat, and its margin for maneuver is rapidly narrowing. The results are stark for the region’s political and economic autonomy.

Folding Southeast Asia Into a Sino-Centric Economic Sphere

Since the Reform and Opening Up era accelerated in the 1980s and 90s, Beijing has regarded peaceful and stable relations with the member states of the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) as essential. China’s 1994 Spratly Islands dispute with the Philippines gave rise to Beijing’s “Good Neighbor” policy. While 2002 is often remembered for the Declaration on the Conduct of Parties in the South China Sea, it was also the year Beijing signed its first free trade agreement with the bloc, which offered trade concessions to improve bilateral ties and was gradually expanded to cover integration in services and investment.

As China’s assertiveness over maritime territorial disputes in the early 2010s stoked tensions in the region and Washington responded with the “Pivot to Asia,” Xi Jinping convened the 2013 Neighborhood Diplomacy Conference — reaffirming stable relations with neighboring countries were a strategic priority. Xi next announced the 21st Century Maritime Silk Road during a state visit to Indonesia, formally launching the Belt and Road Initiative, and signaling Beijing’s ambition to integrate economic diplomacy into its broader geopolitical strategy.

Granted, China’s economic diplomacy does not always achieve its intended outcomes. Nevertheless, Beijing’s consistent yet adaptive practice of economic statecraft — enabled by its growing economic clout — has been effective in drawing Southeast Asia into its orbit. China became the Association of Southeast Asian Nations’ largest trading partner in 2009 and, with the Belt and Road Initiative, quickly rose as the region’s top public financier. Chinese-funded infrastructure projects have boosted bilateral connectivity and moreover, integrated Southeast Asia into China’s domestic transportation networks and subregional development plans, as outlined in the 14th Five-Year Plan. By 2020, Southeast Asia became China’s largest trading partner with bilateral trade reaching $696 billion in 2023. Despite repeated efforts to diversify, the region has been increasingly pulled into an emerging Sino-centric sphere. Intra-regional trade has declined and the share of trade with other major economies has remained largely unchanged over the past decade. Laos epitomizes China’s growing economic dominance: with half of its immense foreign debt owed to Beijing, Vientiane agreed to a debt-for-equity swap that gave China Southern Grid a major stake and control over its national power grid.

Even as its infrastructure investment began to decline, especially during the COVID-19 pandemic, China ramped up its economic diplomacy by taking a leadership role in finalizing the Regional Comprehensive Economic Partnership in 2020 — the world’s largest free trade agreement including all Association of Southeast Asian Nations members. Last year, China also upgraded its free trade agreement with Southeast Asia to “Version 3.0,” pledging expanded cooperation in digital trade, green technology, and supply chain integration. As the world’s fourth-largest economic bloc with relatively stable ties to Western countries, Southeast Asia has become a strategic destination for Chinese firms seeking both global expansion and a way to circumvent Western tariffs and export controls. With Southeast Asian countries eager to boost domestic industries with foreign capital, Beijing is pushing on an open door, as Chinese cleantech investment surged across the region, including BYD’s $1.4 billion plant in Thailand.

Beijing Making Offers Southeast Asia Cannot Refuse

As Southeast Asia’s economic integration with China deepens, Beijing has become increasingly willing to leverage this economic asymmetry when countries run afoul of Chinese interests. Maritime territorial disputes have rendered agricultural exports from the Philippines vulnerable to Chinese trade embargoes. China’s coercive strategy has also proven adaptable. Even as agricultural embargoes targeting Manila have declined over the past year in part because Philippine agricultural exports to China had already decreased, Beijing has a range of alternative measures, including diplomatic threats, informal boycotts, and tourism bans. Although these actions have limited impact on aggregate Chinese-Southeast Asian trade flows, and China’s economic coercion practice remains somewhat cautious, they serve a broader purpose: reinforcing the risks of crossing Beijing’s red lines.

Moreover, the region faces growing negative impacts of trade with a China burdened by domestic overcapacity and a post-COVID-19 economic slowdown. As Kevin Rudd observes, China’s 14th Five-Year Plan reflects a more explicit embrace of mercantilist trade policy — aimed at reducing reliance on imports, while increasing the world’s dependence on Chinese exports. In this context, Southeast Asia, now China’s largest trading partner, has become essential to sustaining Beijing’s economic growth — and, by extension, its domestic stability.

The effects are stark. Southeast Asia’s trade deficit with China has ballooned from $10.4 billion in 2010 to $140 billion in 2024. Since 2022, Chinese exports to the region have risen 24 percent, while Southeast Asian exports to China have stagnated. In Thailand, a surge of low-cost Chinese goods has hit a wide range of industries and dealt a heavy blow to the country’s manufacturing sector. In Indonesia, the surge in Chinese exports has precipitated mass layoffs in labor-intensive industries, particularly textiles. Despite being a major recipient of Chinese investment, Vietnam has borne the brunt of Beijing’s overcapacity, accounting for 40 percent of the region’s trade deficit with China.

Most Southeast Asian states have introduced new measures to restrict Chinese imports, including tariffs and subsidies. However, these measures — according to the Economist Intelligence Unit — are far less than those enacted by China’s other trade partners. Self-constraint reflects the region’s broader reluctance to directly confront China. The recently concluded free trade agreement upgrade negotiations offered little more than lip service to these concerns without providing remedies for underlying problems.

Growing U.S. protectionism gave Beijing an opening to deflect Southeast Asian complaints of its unfair trade practices and portray itself as a champion of rules-based trade and a reliable development partner. During Xi’s recent visits to Southeast Asia, Beijing pledged economic support for the region and invoked rhetoric of Asian solidarity against external pressure. Meanwhile, Beijing recognized U.S. intentions to pressure Southeast Asian countries into adopting more anti-China policies and to sever the region’s transshipment links with China. In turn, China issued a public statement, implicitly warning the regional countries not to enter bilateral trade deals with Washington that could undermine “China’s interests.” With a more unilateralist Washington, and a hesitant European Union and Japan, Southeast Asia has little choice but to adapt to Beijing’s preferred policies and trade terms.

How Beijing Is Seeping into Southeast Asian Domestic Affairs

The political implications of China’s economic dominance are increasingly clear, as Beijing is now willing to openly disregard its long-professed respect of sovereignty and non-interference. In 2003, China signed the bloc’s Treaty of Amity and Cooperation, publicly committing to these principles, which accord well with Southeast Asia’s “ASEAN Way.” Two decades later, however, Beijing has increasingly stressed the importance of China and the Association of Southeast Asian Nations building “mutual political trust” — a phrase used in Chinese official discourse to signal that China’s comprehensive strategic partners should show deference to Beijing’s “core interests.”

Building “mutual political trust” is often intertwined with Beijing’s push for the international campaign, the “Global Security Initiative.” Although framed as non-traditional security cooperation, the initiative is fundamentally an effort by Beijing’s leaders to extend China’s domestic security agenda abroad to safeguard regime security against “color revolutions” and expand its influence. The Global Security Initiative positions China as a provider of law-enforcing tools to enhance the region’s regime security, even for countries with strong ties to Washington. Vietnam showcases a state that goes to Washington for external security but Beijing for internal security. Others like Cambodia, Laos, and Brunei have explicitly endorsed the Global Security Initiative.

However, this initiative also signifies Beijing’s growing expectation that Southeast Asian states internalize and accommodate its own regime security agenda. In fact, several countries are making growing concessions not only in economic policy but also in matters of domestic affairs. Among them, Thailand — the region’s second-largest economy and a long-standing U.S. treaty ally — is a clear example.

Famous for its “bamboo diplomacy,” or hedging between China and the United States, Thailand’s military-monarchy elites, despite concerns over Beijing’s long-term intentions, have come to see China as a convenient internal security partner, one with fewer demands for political reform often associated with the United States. Indeed, U.S.-Thai relations have been on autopilot for quite some time with rather thin alliance collaboration beyond joint annual exercises like Cobra Gold. On the other hand, security cooperation with China began during Thai Prime Minister Thaksin Shinawatra’s tenure and accelerated following the 2007 Joint Action Plan, with neither country looking back.

This trend has had consequences. Once a haven for regional non-governmental organizations and political dissidents, Bangkok has increasingly aligned itself with Beijing’s internal security priorities. Most recently, the Thai government drew criticism for deporting 40 Uyghurs at China’s request. Not coincidentally, the deportations coincided with the announcement of two major Chinese investments in electric vehicle manufacturing and cloud data infrastructure. Back in 2015, Thailand already faced international backlash for extraditing a group of Uyghurs and the rendition of Swedish citizen and Chinese dissident Gui Minhai. A 2023 proposal allowing joint Thai-Chinese police patrols in Thailand raised concerns about sovereignty. These developments reflect Bangkok’s growing willingness to accommodate Beijing’s security demands — driven in part by its desperate need for Chinese capital to revitalize Southeast Asia’s most stagnant economy.

Even though Thailand has refrained from explicitly endorsing the Global Security Initiative, the recent trafficking of a Chinese actor into Myanmar through Thailand highlighted the extent of Beijing’s influence in Thailand’s domestic affairs. Under Beijing’s vigorous demands, Thai authorities ceased their quiet tolerance of scam centers along the border between Thailand and Myanmar, and soon rescued the victim. Beijing, however, was unsatisfied. Over the coming weeks, a series of joint operations led to the extradition of hundreds of suspects to China. Chinese police took an active role, with Chinese Public Security Assistant Minister Liu Zhongyi personally overseeing the operations at the Myawaddy-Mae Sot border crossing.

Granted, cracking down on criminal syndicates is a transnational public good and in Thailand’s national interest, but many in Thailand expressed concerns about China’s disregard for Thai sovereignty. Luckily, a robust state like Thailand can still push back. Liu Zhongyi reportedly apologized for perceived violation of Thai sovereignty. However, it is becoming harder to say “no” when Beijing comes calling, especially for lower-capacity governments such as Cambodia, Laos, and Myanmar.

In fact, China’s erosion of Myanmar’s sovereignty sends a sharp signal of what unchallenged Chinese dominance looks like. Beijing has long seen Myanmar as a geostrategic priority and has exploited the country’s instability. In the early days of the 2021 coup, many in the pro-democracy resistance movement hoped that Beijing might take a pragmatic stance and pressure the junta to negotiate. However, China has since come to believe that the resistance is under too much U.S. influence, lacks the ability to unify the country, and could threaten Beijing’s interests. It has now pivoted to backing the junta. In May 2025, President Xi Jinping met Myanmar’s dictator Min Aung Hlaing, a move that puts to bed any hopes of a pragmatic Beijing.

China uses the tools at its disposal to prevent the pro-democracy movement from defeating the military junta. After tacitly backing a major resistance offensive in late 2023 — meant to warn the junta for ignoring scam centers — Beijing reversed course and moved to prop up the regime. To pressure the resistance along its border, China shuttered trade routes and slowed the supply of black market arms. It even went so far as to kidnap a resistance leader. This push led to a ceasefire between said group and the military in January 2025, followed by the late April handover of the strategic, resistance-controlled city of Lashio to the junta, overseen by China’s special envoy to Myanmar. Elsewhere in the country, Beijing’s special envoy continues pressuring other resistance groups to cease fighting, including with demands to cede more territory. China also established a “joint security company” with the junta, enabling the deployment of armed private security forces — most being former Chinese military and police — on Myanmar’s soil. According to local sources, these forces are already deployed in Muse and Kyaukphyu, a strategic Belt and Road Initiative port on the Bay of Bengal. Although China still engages the resistance behind closed doors and Chinese arms have reached both sides of the conflict from black markets, Beijing is now the resistance’s grim reaper.

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A Region with Diminishing Choices

Today, Southeast Asia is increasingly dependent upon Beijing’s economic largesse and intertwined with it politically. As such, much of the region is deterred from taking actions against China’s core interests.

The Philippines is a case in point of the consequences of going against Beijing. As Manila under President Ferdinand “Bongbong” Marcos Jr. has taken a firmer stance in the South China Sea and aligned more closely with Washington, it is experiencing growing gray-zone coercion from China’s disproportionately stronger coast guard — targeting Filipino fishermen and maritime forces. Unfortunately for Manila, it has been largely abandoned by its Southeast Asian neighbors. Once a vocal claimant challenging Beijing that even went so far as to file a submission in 2014 backing the Philippines’ International Court of Arbitration case, Hanoi has distanced itself from outward displays of support for Manila, while adopting a low profile approach in its own dispute with China. Yet, it is hard to slow China’s momentum — let alone reverse it — through Hanoi’s bilateral strategy.

Indonesia offers a more subtle illustration of the region’s weakening position on this issue. As the region’s largest economy and de facto leader, Jakarta is ideally placed to rally Southeast Asia to balance against China. Yet, for the past decade, Indonesia has pursued a strategy typical of the region: maintaining security ties with Washington while strengthening economic cooperation with Beijing. Under former President Joko Widodo, Jakarta was focused on attracting Chinese infrastructure investments, exemplified by the Jakarta-Bandung High-Speed Rail. With the continued expansion of U.S.-Indonesian defense cooperation, Jakarta also at times pushed back quietly against Beijing over the North Natuna Sea dispute.

China’s economic weight continues to shape Jakarta’s policy orientation under current President Prabowo Subianto, a noted nationalist and American-trained military man. Like his predecessor, Prabowo is heavily reliant on economic delivering for Indonesia and therefore deems Beijing — Jakarta’s largest trade partner and non-bloc foreign investor — vital to this task. During a 2024 state visit to deepen bilateral economic ties, Prabowo signed a joint statement with Beijing that seemingly recognized China’s South China Sea claims. Although Jakarta later walked it back, the episode underscores the risk that Indonesia could well be “sleepwalking into alignment with China,” as well as Southeast Asia’s growing difficulty in striking a delicate economic-security balance. Whether this trade-off is sustainable remains to be seen.

Yet, many in Southeast Asia would argue its economic ties to China are not indicative of choosing Beijing over Washington. They might also argue that the ASEAN Way has created an unparalleled era of Southeast Asian peace by enmeshing China and other great powers into its processes. However, China’s enmeshment with the bloc and each Southeast Asian state has created a region with diminishing choices. Moreover, divergent political and economic interests and the bloc’s consensus-based decision-making further constrain its ability to collectively push back on China’s problematic activities.

China can effectively stymie a unified response so long as it can capture even one member state. Most infamously, during Cambodia’s chairmanship in 2012, the bloc failed to issue a joint statement after Phnom Penh reportedly blocked language on the South China Sea, likely at China’s behest. When the Philippines won its arbitration case against China in 2016, Beijing again leveraged its influence in Cambodia to moderate the grouping’s statement. Today, Manila has largely given up on a united Southeast Asian response, while negotiations over a code of conduct in the South China Sea remain perpetually stalled.

Importantly, even if the bloc’s members could form a unified position, it lacks credible partners to back its position. Australia, the European Union, India, Japan, nor Russia can outweigh China. Above all, Washington’s leadership failures are most stark. Arguably, there was a window about a decade ago to treat the region as a strategic priority. But, with the Trans-Pacific Partnership withdrawal in 2017, neglect of the bloc as an institution, continued unwillingness to consider market access for the region, and now the tariffs, Southeast Asia does not see Washington as reliable. A 2024 survey of Southeast Asian elites reflects this trend: a growing majority now favor alignment with Beijing over Washington. Confidence in Washington as a reliable security partner has declined sharply, while skepticism about its regional role continues to rise.

Secretary of Defense Pete Hegseth’s May 2025 visit to the region and triumphant tone at the annual Shangri-La Dialogue security forum intended to signal U.S. focus on the Indo-Pacific and reassure regional actors. Instead, his emphasis on increased military spending, burden sharing, the “imminent” threat to Taiwan, and black-and-white rhetoric exposed the fundamental problem: U.S. policy rests solely upon its security commitments at the expense of a credible economic strategy. This plays precisely into China’s strategy and advantages in the region.

This does not mean that individual Southeast Asian states simply give up opportunities to buck China. The Philippines under Marcos has taken to confrontation and actively sought cooperation with outside security partners. However, the issue is that this effort is increasingly a daunting task, given the long-standing U.S. security commitments are more in question than ever and none of the other options — Australia, Japan, India, or the European Union — can effectively outweigh China. The fundamental problem is one of scale. Without a competent Washington, and absent an Association of Southeast Asian Nations capable of unified hedging, Southeast Asian countries cannot effectively stand up to Beijing. It is unfortunately safe to say that hedging will likely fail to stop the Middle Kingdom’s return to regional domination.

Jessica C. Liao, Ph.D., is an associate professor of political science at North Carolina State University and a 2020–21 Wilson China fellow. In 2022, she served as an economic development specialist at the U.S. Embassy in Beijing, where she focused on China’s external engagement with Belt and Road Initiative countries.

Lucas Myers is an affiliate in research at the Sigur Center for Asian Studies at The George Washington University. From 2019 to 2025, he served as senior associate for Southeast Asia at the Wilson Center. An expert on strategic competition in Southeast Asia and China, he regularly briefs members of Congress, U.S. executive agencies, allied and partner governments, and private sector stakeholders.

Image: Office of the Press Secretary of the Philippines via Wikimedia Commons