Southeast Asia Faces Tough Choices in US-China Rivalry

Shifting Global Dynamics Force Region to Reassess Longstanding “Hedging” Strategy

Southeast Asian nations are increasingly compelled to abandon their traditional approach of balancing relations between the United States and China. Geopolitical realignments and economic pressures are forcing a difficult re-evaluation of this carefully crafted neutrality.

The End of “Not Choosing Sides”

For years, Southeast Asian countries navigated the growing competition between Washington and Beijing by maintaining distinct ties: seeking security assurances from the U.S. while fostering trade and economic benefits with China. This “hedging” strategy aimed to preserve regional autonomy. However, this delicate equilibrium is now under significant strain.

The discourses on ‘supply chain diversification’, ‘friend-shoring’, and the ‘China-plus-one strategy’ reflect the integration of security concerns into trade and economic policies. US-China competition now spans all spheres, including security, economics, and technology, with significant overlaps.

Economic Policies Entwined with Security

Initiatives like “friend-shoring” and diversifying supply chains away from China signal a crucial shift. Economic strategies are now explicitly tied to national security concerns. This reflects a broader trend where U.S.-China competition permeates security, economic, and technological domains, blurring previous distinctions.

The first Trump administration’s withdrawal from the Trans-Pacific Partnership and initiation of a trade war with China disrupted established multilateral trade systems. The COVID-19 pandemic further destabilized global trade. Subsequent U.S. administrations have continued imposing tariffs on Chinese goods and increasingly view China as a national security threat, impacting economic interdependence.

Evidence of a Drift Towards China

Recent analyses suggest a discernible shift in Southeast Asian alignment, with an increasing number of states gravitating towards China. This trend is driven by Beijing’s expanding influence beyond economics and a perceived erosion of American credibility as a security guarantor in the region. The U.S. is also increasingly linking security provisions to trade negotiations, making the previous strategy untenable.

“I think it is very desirable for us not to have to take sides, but the circumstances will come where ASEAN may have to choose one or the other.”

—Lee Hsien Loong, then-Prime Minister of Singapore

Despite this observed drift, surveys indicate that Southeast Asian elites remain cautious of China’s long-term intentions and generally favor the United States. The current trend is less a conscious choice and more a consequence of increasingly opting for Chinese investments and initiatives, often believing they are successfully balancing both powers.

New Avenues for Regional Cooperation

This evolving geopolitical landscape presents both challenges and opportunities for Southeast Asia. The need to navigate great power competition is driving greater openness to various Indo-Pacific initiatives beyond those solely led by ASEAN. Countries are exploring participation in non-traditional security aspects of groupings like the Quadrilateral Security Dialogue (QUAD) and initiatives such as India’s Indo-Pacific Oceans Initiative (IPOI).

A 2024 report by the Council on Foreign Relations highlighted that “Southeast Asia’s strategic autonomy is being tested by the intensifying rivalry between the United States and China, pushing countries to make difficult choices regarding economic and security partnerships.” The region’s ability to remain flexible while safeguarding its autonomy remains a key objective amidst these shifting global currents.