Amidst intensifying rivalry between America and China, countries around the world are finding means to lessen reliance on major powers. Of particular importance are the security strategies that will pave the way to stronger economic resilience. We examine how Southeast Asian nations plan to manage this uncertainty.
Southeast Asia: a strategic pivot for middle powers
Southeast Asia, especially Association of Southeast Asian Nations (Asean), has emerged as an attractive option for ‘middle power’ countries like Australia and Germany, who want to ‘derisk’ their economic relationship with China.
With a 680 million-strong population, the region is ripe with potential and opportunity, especially as Asean members strive to foster greater integration in trade, transport, digital connectivity and sustainability through initiatives like the
Digital Economy Framework Agreement (DEFA).
Southeast Asia has also become a top choice for firms looking to diversify their production away from China, with foreign direct investment into the Asean bloc swelling to
US$236 billion in 2023 — a 24 per cent leap from 2020 to 2022’s annual average of US$190 billion, according to
a report by OCBC Bank.
The enthusiasm for collaboration is mutual, with Asean members including Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, confidently leaning into new friendships with Europe’s middle powers.
The road ahead remains uncertain, however, as Southeast Asia is also the region where intense US-China tensions play out. With US President Donald Trump in office, Southeast Asia may have to contend with increasing protectionism, potentially undermining the multilateral trading systems vital to prosperity in Southeast Asia.
Chin-Hao Huang, Associate Professor of Political Science at Lee Kuan Yew School of Public Policy (LKSYPP) and Yale-NUS College, said that “the ‘America First’ agenda under the Trump administration will likely see more tariffs, emphasis on rectifying trade imbalances, and other protectionist measures, all of which would affect the export-oriented economies in Southeast Asia”.
Caught in the crossfire: Managing growing US-China tensions
Despite this, Asean has continued to emphasise its stance on maintaining neutrality to ensure the region remains stable and prosperous, urging the bloc to remain steadfast against taking sides. Added Professor Huang, “As small, third countries in Southeast Asia, the strategic way forward is clear. In order to minimise their sense of vulnerability, they have to find pragmatic, inclusive ways to make themselves indispensable to as many external, large powers as possible, across the economic, diplomatic, and security domains. Doing so will give the United States and China a stake in a stable regional order as well.”
For example, China announced comprehensive strategic partnerships with Asean in 2021. The US followed suit in 2022. Economically, the US is Asean’s largest investor and China its largest trading partner.
While the Sino-Asean relationship flourishes, efforts have been made to balance China’s increasing presence while sustaining the US as a leading military partner and key contributor to peace and stability in the region. In his article, ‘
Don’t Make Us Choose Sides: Southeast Asian Perspectives of US Strategy and Presence’, Drew Thompson, Senior Fellow at S. Rajaratnam School of International Studies, said: “The US has sought to deepen defense ties with Southeast Asian countries. Its most meaningful military relationships are with Singapore and the Philippines. However, the US has taken steps to deepen military ties with other countries, including Indonesia....”
On the issue of security, Asean and China are negotiating a Code of Conduct on the South China Sea. In a joint article published in Contemporary Southeast Asia, Prof Huang and
Selina Ho, Associate Professor in International Affairs and Co-Director of the Centre on Asia and Globalisation, wrote that China “incentivises Beijing to adopt peaceful, norms-based behavior and re-evaluate its own approach to potential regional conflicts”.
As initiatives such as the
Asean-China Free Trade Agreement take shape, it remains to be seen how Southeast Asia, its fellow middle powers in Europe and handful of other key players around the world will maintain the delicate balance in the early stages of President Trump’s second term.
Shifting Loyalties: Southeast Asia’s Changing Perspectives
While Asean countries seek closer cooperation with both superpowers, they do not hold a monolithic view. Each nation has its own interests and domestic priorities, including diverging views on the Israel-Gaza war, which affect Washington’s perceptions of the country.
According to the 2024
State of Southeast Asia survey by the Asean Studies Centre at ISEAS - Yusof Ishak Institute, 46.5 per cent of Southeast Asians said the Israel-Gaza war was among their top three geopolitical concerns this year, with Muslim-majority countries Malaysia (83.1 per cent) and Indonesia (75 per cent) skewing the curve.
The survey report also states that when respondents were asked if “the US will do the right thing to contribute to global peace, security, and governance” , the response was relatively dampened; the figure of those who expressed no confidence rose from 6.5 to 14.1 per cent over the last year.
This figure is higher in Muslim-majority countries such Brunei, Malaysia and Indonesia. In Malaysia, for example, Prime Minister Anwar Ibrahim’s rejection of America’s demands to sever ties with Hamas, who are Gaza’s leaders, and the US’s concern about Malaysia’s alleged role in the Iranian oil trade have strained Malaysia-US relations.
In “The State of Southeast Asia” survey conducted by Institute of Southeast Asian Studies (ISEAS) at the National University of Singapore (NUS), the rise of US political and strategic influence is becoming more worrisome than welcome for the region. On average, 41 per cent of Southeast Asian people welcome US influence in 2024, against 55.8 per cent in 2023. In addition to this, when asked to choose to align exclusively with either China or the US in the future, 50.5 per cent of respondents voted to side with China, a significant increase from 38.9 per cent to 50.5 per cent in the same period. It was observed that Asean members like Malaysia, Indonesia, and Laos were the major factor in pulling the vote in China’s favour. This can largely be attributed to their benefiting from the robust trade and investment relations brought about by China’s Belt and Road Initiative (BRI).
That said, nearly half of those polled agreed that Asean should enhance its resilience and unity to fend off pressures from both the US and China.
At a
panel discussion on global peace and conflict at the Lee Kuan Yew School of Public Policy’s (LKYSPP’s) Festival of Ideas 2024, Senior Advisor at the Centre for Humanitarian Dialogue Michael Vatikiotis said: “Southeast Asians are loath to choose (sides) and prefer to form a balance that enables countries to benefit from relations with all the great powers.”
In an earlier speech at the Ministry of Foreign Affairs’ Committee of Supply Debate in 2023, Singapore’s Foreign Minister Dr Vivian Balakrishnan had expressed Singapore’s wishes for “overlapping circles of friends” in Southeast Asia, rather than the Cold War-style lines between the US and China that force countries in the region to take sides. In his
dialogue at the Council on Foreign Relations in June that same year, he added that, “by giving everyone an incentive to create peace and development in Southeast Asia, we hope that a stable balance of power will be achieved.”
Asean’s inclusive approach to regional security engages multiple powers in its security architecture. Recognising the region’s complex geopolitical environment, Asean aims to maintain regional stability by involving regional and extra-regional powers. As Southeast Asia expands its value proposition, individual nations ought to continue engaging bilaterally with a range of partners, not just economically and in security, but in strategically important areas like energy security, too.