Prioritizing Southeast Asia in American China Strategy

How to find the key insights

Key findings; Why Southeast Asia matters

1. The US and China are engaged in geopolitical competition for influence; Southeast Asia is of critical importance in this competition, lying at the heart of the Indo-Pacific region, yet should be seen and respected on its own merits. (p. 5)

2. Given a history of external intervention, Southeast Asian countries prize their autonomy and fear being drawn into great power competition; they seek to maximize benefits from relations with both China and the US; Southeast Asia is a multi-actor region and a complex geostrategic landscape engaging with active and influential “middle powers”. (p. 5)

3. China’s strengths are its geographic proximity and huge economic footprint, bilateral and multilateral diplomacy, including the Belt and Road Initiative, cultural linkages, values-neutral and transactional political approach, and propaganda narratives; its weaknesses are its geographic proximity, pressure on ASEAN and its member states, its conflict in the South China Sea, military buildup, politically subversive activities, and weak security assistance. (p. 5)

4. US strengths are its extensive security assistance and foreign direct investment, thousands of US companies operating in the region, soft power appeal, cultural and educational exchange programs, and strategic counterbalancing against Chinese expansion; its weaknesses are the episodic nature of its high-level diplomacy, insufficient public diplomacy efforts, impatience with the slow consensual ASEAN style of diplomacy, absence from regional groupings and FTAs, inability to compete with China on infrastructure development, and failure to develop a comprehensive and integrated strategy toward the region. (p. 6)

5. The US should not counter China directly but pursue its own interests proactively, play to its strengths, shore up its weaknesses, offer ASEAN states a more positive alternative to China, support increased regional engagement by allied countries, and alleviate ASEAN anxieties about the Quad. (p. 6)

6. In response to China’s pursuit of its interests in the region, the US should monitor China’s activities, share intelligence with ASEAN states, and publicize China’s malign activities; develop an effective public diplomacy narrative outlining the US vision for a stable regional order; and counter Beijing’s propaganda, subversive activities, and disinformation programs. (p. 6)

7. Southeast Asia’s sea lanes are vital trade arteries; 40% of global annual goods trade and 25% of all oil and LNG shipments pass through the Strait of Malacca, a potential chokepoint of strategic concern; over 20% of global maritime trade passes through the disputed South China Sea. (p. 9)

Southeast Asia in the context of US-China competition

1. For Southeast Asia, responding to heightened competition between China and the US has meant hedging (not becoming too dependent on any single great power), shifting alignments, and developing relations with as many other foreign powers as possible; Southeast Asian countries do not want to be asked to choose between the US and China but want to maximize benefits from their relations with each power. (pp. 11-12)

2. Lowy Institute surveys indicate that China’s relative influence in Southeast Asia compared to the US has increased by 2 points since 2018 and shows a pervasive decline in US influence; China holds a substantial lead in economic and diplomatic influence in all 10 countries surveyed; only in defense networks does the US hold a substantial lead. (pp. 12-13)

American interests and presence in Southeast Asia

1. The US government and US private sector actors are extensively and deeply engaged throughout Southeast Asia in diplomatic, commercial, security, and cultural/educational interactions; the Biden Administration has stated that it is committed to a free and open, connected, prosperous, secure, and resilient Indo-Pacific. (p. 16)
2. Diplomacy may be the weakest of US interactions in the region; US high-level officials visit regularly but are hampered by distance to reach Southeast Asia, limited time spent meeting with officials, and insufficient time engaging with the public; ambassadorships have been left empty and embassies appear to be impregnable fortresses, reinforcing the image of a remote power; US diplomacy should do more to engage and inform the publics of Southeast Asia. (pp. 16-18)
3. Security engagement with Southeast Asia is multifaceted and multinational, anchored by longstanding alliances and treaty commitments with Thailand and the Philippines, a close partnership with Singapore, growing relationships with Indonesia and Vietnam, military exercises with 8 of 10 ASEAN nations, and security and defense engagements bilaterally and multilaterally through ASEAN; the Southeast Asian publics have low awareness of US contributions to regional security which could be improved through better public diplomacy and strategic messaging. (pp. 18-21)
4. Commercial engagement is deeply rooted and highly diverse; 6200 US companies operate across ASEAN, with trade reaching US$501 billion in 2022 and ASEAN forming the US’s fourth largest export market; most US companies expect their trade, investment, and profits in ASEAN to increase in the next five years; the US is the largest investor in ASEAN providing US$25 billion in FDI a year. (pp. 21-22)
5. The US trade position relative to China has declined every year since 2012 and China is the top trading partner of every country in the region, due to its dominant role in supply chains, goods, trade, geographic proximity, and aided by a buildup of regional preferential trade agreements like RCEP, CPTPP, and the China-ASEAN FTA; US absence from these agreements and the lack of a robust trade agenda with ASEAN reduce US economic influence in the region, whose economy is trade dependent. (pp. 22 -23)
6. Cultural and educational engagement is extensive with numerous elements but is not well known or publicized; the US should adopt a public diplomacy narrative to compete with China’s active public diplomacy that emphasizes the value and benefits of Southeast Asia to the US and vice versa, the range of US private sector activities in Southeast Asia, and how Southeast Asian engagement with the US contrasts with China. (pp. 23-24)

China’s footprint in Southeast Asia

1. China’s presence in Southeast Asia is broad, deep, multifaceted, and a more evident part of the fabric of Southeast Asia, much better known than the US footprint; this is partly due to Chinese investment in public diplomacy and “united front” and other influence activities. (pp. 25-26)
2. China’s diplomacy in Southeast Asia is extensive and intensive with frequent exchange of visits between Beijing and Southeast Asian capitals, strategic partnerships, positive ties with all ASEAN countries, dozens of interactive mechanisms with ASEAN reflecting broad and deep institutionalization of China-ASEAN relations; China and ASEAN also engage in a wide range of cultural exchanges; a challenge to China is the pervasive and growing unease about China’s influence and the overwhelming nature of China’s engagement and demands which may have the effect of pushing away Southeast Asians. (pp. 26-28)
3. China has been ASEAN’s number one trading partner since 2009 and ASEAN became China’s leading trade partner in 2020, conducting nearly US$1 trillion in annual trade as of 2022; bilateral trade quadrupled between 2010 and 2022; FDI from China is less substantial, between US$7 and US$12 billion from 2019 to 2022. (p. 28)

Policy recommendations for the United States

Recommendations from Southeast Asia experts (pp. 38-39):

1. Be consistent and develop a more comprehensive US approach to the region, beyond security, including getting into the regional economic game;
2. Forget about American primacy – the US is one of many regional actors;
3. Tone down rhetoric about the “rules-based order” and recognize that the Biden administration’s emphasis on democracy vs autocracy does not go down well;
4. US cultural capital remains strong but needs to be tapped and promoted;
5. US military-military engagement and presence is the US’s strongest and best asset in the region;
6. Improve US public diplomacy in the region;
7. Bring US diplomats up to speed and recognize the importance of face time at the leadership level;
8. Take ASEAN seriously as an organization and don’t only pursue bilateral relationships;
9. Don’t try to outcompete China economically and don’t try to convince Southeast Asians of China’s malign ways; and
10. Factor the Middle East into US Southeast Asian policy with regard to Israel and the fate of Palestine.

Recommendations from the Working Group (pp. 39-43):

1. Do not exclusively/primarily view the region through the lens of US-China competition;
2. Play to US strengths, be confident and proactive, and adopt a comprehensive and positive approach in the region;
3. Welcome a multi-actor regional order;
4. Prioritize and fund programs that restore US soft power appeal and increase US influence in the region;
5. The President, high-level officials, and Congressional delegations should visit more often;
6. The US Congress should pass legislation to elevate ASEAN’s diplomatic status, increase engagement between Congress and ASEAN, and form an ASEAN Caucus;
7. Urgently involve the US in Southeast Asia’s regional economic architecture and play to US strengths in commerce;
8. Develop and implement a coordinated Regional Development Initiative;
9. Strengthen US Embassy capacities throughout the region;
10. Strengthen work between US intelligence and counter-intelligence agencies and their counterparts in the region;
11. Prioritize and dramatically increase US public diplomacy across the region, and increase educational exchange programs;
12. Strengthen Southeast Asian studies in US universities;
13. Establish a dedicated Track 2 channel of US and Southeast Asian former officials and leading non-governmental experts as an officially sponsored US-ASEAN activity;
14. Continue the full range of military/security assistance programs and prioritize non-traditional security assistance.

Conclusion

The brief provides a short but comprehensive study of the comparative positions of the United States and China in Southeast Asia, including perspectives and recommendations from Southeast Asian thought leaders, and should serve as a useful resource for policymakers seeking to bolster US relations and presence in Southeast Asia.

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