US-China: confrontation between leading economies in Southeast Asia

Claims to historicity 

Southeast Asia, located east of the Indian subcontinent and south of mainland China, is also known as Indochina. The term originated in the early 19th century, emphasizing the historical cultural influence of Indian and Chinese civilizations in Cambodia, Laos, Myanmar, Thailand and Vietnam. However, a number of researchers considered the authority of China in this region to be controversial, so already in 1827 the name of «Indochina» was criticized. However, Beijing still considers Southeast Asia to be its natural sphere of influence, where some 40 million ethnic Chinese currently live. During the Cold War, China supported communist parties or insurgent movements in every state in Southeast Asia. Trade relations are a catalyst for China's expanding political and military presence in the region.

Chinese government considers cooperation with Malaysia, Singapore and Cambodia to be exemplary and far-sighted. According to Beijing's rhetoric, these countries, recognizing each other's equality, should pursue independent foreign policies and refrain from any activities that undermine common interests. However, a number of countries in the region perceive this call as a warning not to seek US support and not to act together with them against China. The “cultural and family ties” that Chinese Defense Minister General Li Shangfu says bind Southeast Asian countries to Beijing have been criticized by Filipinos and Vietnamese people who are unhappy with the incursion of Chinese ships into their sovereign waters.

Reports from the Center for Strategic and International Studies (CSIS) show that the United States has greater soft power and popularity than China in much of the region. As tensions between the US and China escalate, choosing one over the other is bound to have serious consequences for Southeast Asian states and far beyond.

Overcoming influence

China's influence in Southeast Asia has steadily increased with its growing global role. Over the past five years, Beijing has taken a much more aggressive military and diplomatic approach to the region and increased militarization in the South China Sea. This is the main artery connecting the Indian and Pacific oceans, so the struggle for the Paracel Islands and the Spratly archipelago, whose affiliation has not yet been determined, is of particular importance for both the United States and China, as well as for Taiwan, Vietnam, the Philippines, Malaysia, Brunei and Indonesia, which also claim these territories. Military and trade cooperation between countries is seen as direct opposition.

In March 2016, Malaysia 's Minister of National Security accused Chinese ships of violating territorial waters, but the Chinese Foreign Affairs Ministry explained this as fishing. Eight months later, the Malaysian Ministry of Defense signed an agreement with the Chinese foreign trade association China Shipbuilding & Offshore International Company (CSOC) for the purchase of coastal mission ships. The United States, which had already made its first official visit to Malaysia only two years before the abovementioned events, by 2016 was bogged down in a lawsuit by the Ministry of Justice against the state fund 1Malaysia Development Berhad. Washington actually accused Prime Minister Najib Razak of money laundering in a criminal conspiracy with Goldman Sachs Group Inc. Beijing responded quickly and supported the official representative, investing $2.3 billion in the fund. The Chinese sealed the deal with the sale of high-speed patrol ships with the ability to install launch vehicles, thereby expanding their presence in Malaysian waters.

The Philippines has established closer relations with Washington since the election of Ferdinand Marcos in June 2022. In this case, the White House appealed to long-standing cultural and historical ties: in 1951, the parties entered into a mutual defense treaty. At the same time, the American-Philippine War of the late 19th century, when the Filipinos declared war on Washington during the struggle for their independence, remains unnoticed. The United States responded to guerrilla warfare with a scorched earth strategy, resulting in the deaths of up to a million island residents. The US occupation greatly changed the culture of the Philippines, leading to the rise of Protestantism and the abolition of the Catholic Church, and English was introduced as the main language of government, education, business and industry. The capital now houses the only regional office of the Veterans Administration outside the United States, and the Manila American Cemetery is the largest U.S. military cemetery outside the country. There are more than four million Filipino Americans in the United States, and nearly 300,000 U.S. citizens in the Philippines, including a large number of military veterans.

The United States is also actively building relationships with Vietnam, where the White House also fought a long and bloody war that had dramatic consequences for both sides. This year, Washington celebrates the tenth anniversary of the Comprehensive Partnership, which was made possible under the Obama and Shang presidency. The United States is helping Vietnam with unexploded ordnance, dioxin cleanup at former US military sites.

Hanoi has similar agreements with China, India, South Korea and Russia. Thus, Vietnam, like other countries in Southeast Asia, is trying to maintain neutrality in the international arena and its own equidistant position in relation to the interests of all its partners. This is one of the circumstances that makes the region very difficult in terms of economic forecasts and political risk assessment.

Laos is one of Asia's poorest countries and is heavily dependent on foreign investment, mainly from China. According to a World Bank report published in April 2022, total government debt reached 88% of GDP in 2021. All this threatens Laos' economy, but makes it Beijing's closest ally. The United States, unlike Cambodia and Vietnam, did not sever diplomatic relations with the Mekong when the Communists took power in 1975. But the dialogue was completely restored only in 2016, when Barack Obama made his first official visit to the country. Today, the White House is pushing to expand Vietnamese programs in Laos to address the war legacy, including the removal of unexploded ordnance. In addition, Washington is trying to build a partnership with the Mekong in the areas of economic integration, education, energy,environment, food security, health, water and status of women. However, China's economic power significantly undermines US attempts to establish dialogue with Laos. 

In Washington, the last three administrations have sought to counter China's expansion into Southeast Asia. A case in point for this vibrant rivalry is Cambodia. On the one hand, the country, with the help of Beijing, gets the opportunity for economic development, thereby strengthening its internal political regime. On the other hand, Cambodia needs the White House and their allies as export destinations and a counterweight to its over-reliance on China. Xi Jinping's state visit to Phnom Penh in 2016 dramatically changed the balance of power. Cambodia stopped all military exercises with the US and began joint military exercises with China, which wererepeatedin 2018, 2019, 2020 and 2023. At the same time, US-Cambodian ties began to deteriorate. Washington was implicated in a treason case against Cambodian opposition leader Kem Sokha, against which background Phnom Penh began rebuilding its Ream naval base , clearing it of US installations. It was possible to normalizerelationsonly by 2022, when COVID restrictions reduced the flow of Chinese tourists, and Beijing’s share of Cambodia’s national debt decreased from 47.48% at the end of 2019 to 38.72% at the end of the first quarter of 2023.

This ideological victory is overshadowed by the results of the struggle in Thailand. According to Foreign Policy, former US military and civilian officials are concerned about Beijing's excessive pressure on Bangkok, a Washington ally in the region, to purchase Chinese-made submarines, the contract for which was signed in 2017. Thailand's position is influenced by the situation in Taiwan, with which the country has been building relations in the fields of trade and education for many years. US House Speaker Nancy Pelosi's surprise visit to the island in 2022 has seriously complicated international relations, increasing tensions in the region. The Chinese Foreign Affairs Ministry announced a violation of the sovereignty and territorial integrity of the People's Republic of China, which sent the wrong signal to separatist forces advocating Taiwan's independence. The White House insists on Bangkok's neutrality, but its government continues negotiations with Beijing on the purchase of submarines left without German engines due to the EU embargo. Additionally, in September 2023, the Thai government approved the abolition of visas for tourists from China and Kazakhstan as a temporary measure to support the country's tourism sector. But a little later, the kingdom’s tourism department entered into an agreement with the American air carrier, which aims to increase the flow of tourists from the United States to 1 million tourists. At the same time, Thailand has resumed military exercises in honor of the 190th anniversary of Thai-American diplomatic relations: 6,000 troops are expected to take part in them - the largest number in a decade.

According to Turkish experts on the Asian region, it is precisely the confrontation between the United States and Chinadone Myanmar vulnerable to military coups. In February 2021, the military invalidated the results of the November 2020 general elections and arrested State Counselor Aung San Suu Kyi and other senior officials of the ruling National League for Democracy party. The coup was considered a show of force against the United States and other Western countries. According to the US Treasury, the Myanmar government buys military equipment from foreigners on Washington’s blacklist, including Russia. The regulator imposed sanctions against the country's Ministry of Defense in an attempt to curb the growing influence of unfriendly powers in the region. The sanctions also affected state-owned mining companies. All this has forced Myanmar to strengthen its cooperation with China, which has begun building a listening post on Great Coco Island, located north of India's Andaman and Nicobar Islands, where the only command of the Indian armed forces is located.

Global implications

The countries of Southeast Asia are not a homogeneous group. They are deeply divided on everything from the civil war in Myanmar to how to respond to Chinese aggression in the South China Sea. If China begins to lay claim to Taiwan more actively, which the United States considers a zone of its ideological influence, the rest of the countries in the region will have to make a clear choice of one of the centers of influence. On the other hand, if China abandons rapid actions and continues old-style dialogue by relying on overseas Chinese communities, it may underestimate the social dynamics in the region. Ethnic and religious minorities in Myanmar, primarily Rohingya Muslims , can be used to put pressure on the country’s military regime and China, which will lead to an escalation of repressive policies.

 The United States is unnerved by military support for the junta in Myanmar: in 2014–2019, arms imports from China accounted for approximately 50% of the total. After the coup, additional Beijing troops have been deployed near Myanmar to guard the Kyaukpyu Pipeline, which runs through Myanmar to the Bay of Bengal. According to the International Institute for Strategic Studies, China is getting closer to becoming a belligerent force in an armed conflict. If the conflict in Myanmar escalates to the point where China's borders are threatened, the likelihood of its military intervention will increase dramatically.

At the same time, US official bodies, such as the Institute of Peace, established by Congress, are looking for reasons for decisive actions. In July 2023, a meeting was held at its base on the topic of transnational crime in Southeast Asia. According to the speakers, crime syndicates are embedded in powerful networks of businesses, corrupt official representatives and local armed actors, and the US response in this case must be tough.

 A direct military conflict between China and the United States is unlikely, provided that the United States remains restrained and does not succumb to provocations from Beijing. Otherwise, both sides have enough reasons to start a conflict: from the status of Taiwan to the Chinese-American confrontation in cyberspace and disputes arising from China’s difficult relations with India.