South-East Asia's Delicate Balance: China, US and the Road to Influence

Strategic Insights -

South-East Asia's nations have long sought to avoid taking sides in the ever-growing rivalry between China and the US. However, the relationship between these superpowers is deteriorating, forcing regional leaders to make delicate choices. Cambodia, for instance, has recently signed a trade deal with the US, which includes "poison pill" provisions that could annul the agreement if the country makes trade arrangements with countries that Washington deems a threat. This move has implications for China, which has been courting the region with economic deals and investment.

Key Takeaways:

  • Cambodia has signed a trade deal with the US, which includes provisions that could annul the agreement if the country makes trade arrangements with countries deemed threatening to US interests.
  • The deal contains "poison pill" provisions that could make it difficult for Cambodia to maintain good relations with both China and the US.
  • The region's leaders are trying to maintain good relations with both China and the US, but the deteriorating relationship between the two superpowers may force them to make choices.
  • China has been courting the region with economic deals and investment, including a free-trade agreement with the Association of South-East Asian Nations.
  • The trade deals with the US may not have turned the region away from China, with Chinese premier Li Qiang signing an expanded free-trade agreement with the ASEAN nations just days after the US deals were inked.
  • The US approach has failed to capitalize on the region's openness to working with the US, and China is using its investment carrot to woo nations in the region.
  • China could also pull out more coercive economic tools, such as export controls on critical minerals, to discourage further alignment with Washington.

Statistics:

  • Cambodia has signed a trade deal with the US, which includes "poison pill" provisions.
  • The deal contains provisions that require Cambodia to align its export controls with America's.
  • The trade actions against Beijing will be launched at Washington's behest.
  • China has signed $22bn worth of deals to fund projects from freight infrastructure to AI and energy.
  • The region's economic output totals over $1.5 trillion, with the US pulling out of the Trans-Pacific Partnership (TPP) agreement, leaving a gap for China.

Sources:

  • The article cites:

+ Pete Hegseth, the US war secretary, mentioning a reported hope to persuade Cambodians to open Ream for an American ship visit.

+ Helena Legarda, of the Mercator Institute for Chinese Studies, commenting on the difficulties for south-east Asian nations to maintain relations with both China and the US.

+ Lauren Piper, of research firm Rhodium Group, saying that a network of similar deals could "de facto establish a US-led trade grouping of countries with higher barriers to Chinese goods, companies, and technologies".

+ Susannah Patton, of Australia's Lowy Institute think tank, highlighting the US unpredictability and China's portrayal of itself as the status quo partner.

+ China's premier Li Qiang signing an expanded free-trade agreement with the ASEAN nations.

+ Xi Jinping's three-country sweep through Vietnam, Cambodia, and Malaysia.