The report paints a stark image of this decline, pointing to tariffs, help cuts and visa restrictions below Donald Trump because the catalysts eroding US sway.
Launched Wednesday, the Lowy Institute's Southeast Asia Affect Index ranks exterior powers by their affect throughout commerce, funding, defence, diplomacy and cultural affect.
The outcomes are telling. China now surpasses the US in general regional affect, establishing itself because the default accomplice for six out of 11 Southeast Asian nations. For Cambodia, Indonesia, Malaysia, Myanmar, Thailand and Vietnam, Beijing holds the highest spot.
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“China is all over the place in Southeast Asia,” the report notes. “America, against this, exhibits two differing faces in Southeast Asia.”
What this implies seems to be straight-cut: The place China pursues constant financial engagement backed by an unrelenting diplomatic presence, the US is reactive, fragmented and inconsistent.
Economics: China's strongest card
On the subject of affect in Southeast Asia, China's strongest card is economics, and it's enjoying it very successfully. Commerce is among the most seen measures of energy, and the numbers appear to be telling a transparent story.
China accounts for about 20% of Southeast Asia's exports and provides 26% of its imports. America, by comparability, is at 16% for each. The hole is even larger with regards to nations like Cambodia, Laos and Myanmar, the place Chinese language affect outweighs Washington's by wherever from 60% to 150%.
Funding patterns reinforce this dominance. Between 2015 and 2024, China accounted for 21% of all new venture investments within the area, up from 13% within the earlier decade. That bounce displaced Japan as the most important investor. Chinese language cash now helps infrastructure, industrial tasks and manufacturing hubs, embedding China deeply into Southeast Asia's financial framework.
China additionally wields affect via growth finance, notably through Belt and Street Initiative tasks. Whereas its general abroad lending has slowed since 2017, these investments stay strategically vital. Grants, nevertheless, are modest, lower than 12% of regional help grants between 2021 and 2023 got here from Beijing.
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Past the onerous energy of commerce and funding, China additionally has appreciable gentle energy that it workouts through tourism and schooling. Chinese language vacationers make up the vast majority of guests to Thailand, Vietnam and Cambodia, and roughly 60% of all overseas college students in Southeast Asia are from China.
These human connections reinforce financial ties and create long-term networks, although they haven't translated into media affect. On the subject of TV, radio, newspapers and information companies, China ranks solely sixth within the area.
China's diplomatic attain and safety limitations
China's presence in Southeast Asia goes far past commerce and funding, it extends deep into diplomacy. Chinese language leaders and overseas ministers are among the many most frequent guests to the area, signaling constant engagement. Beijing additionally maintains 16 consulates exterior regional capitals, whereas 54 consulates from Southeast Asian nations function in China, making a dense community of diplomatic ties.
Its strategic partnerships now cowl each Southeast Asian nation besides the Philippines, which analysts say exhibits simply how deliberate and complete its strategy is.
This fixed diplomatic presence doesn't simply construct goodwill, it instantly helps China's financial investments and positions the nation as a accomplice that many within the area discover onerous to disregard.
However there are limits. Whereas China dominates in commerce and diplomacy, its footprint in regional defence is uneven. It ranks because the third-largest arms provider to Southeast Asia after the US and Russia, with most of its gross sales concentrated in mainland Southeast Asia. In Cambodia, Laos, Myanmar, Vietnam and Thailand, Chinese language weapons make up over 20% of arms imports.
Transfer to maritime Southeast Asia, nations like Indonesia, Malaysia, the Philippines, Singapore, Brunei and Timor-Leste, and China's share drops sharply to simply 2%.
Past arms gross sales, China has few army alliances or joint workouts within the area. This hole exhibits that whereas Beijing is shaping financial and diplomatic ties, its safety affect stays restricted, particularly within the maritime elements of Southeast Asia.
The takeaway appears to be clear: China is a dominant financial and diplomatic participant, nevertheless it doesn't but management the area's safety structure, leaving house for others, just like the US, to stay related in defence issues.
US affect falters
For the US, affect is concentrated and uneven.
It retains sturdy defence and funding ties with conventional companions such because the Philippines and Singapore, the place army collaboration stays central. Cultural affect via schooling and media continues to supply gentle energy, however these beneficial properties are overshadowed by a weakening financial and diplomatic presence.
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Trump-era insurance policies, tariffs, visa limits and an 83% lower to overseas help, have accelerated this decline.
Southeast Asian nations have been notably affected when tariffs imposed in April persevered into July, leaving Laos and Myanmar with duties as excessive as 40%.
The dismantling of USAID and finances reductions on the US Company for International Media, which oversees Voice of America and Radio Free Asia, additional hollowed out conventional channels of American affect.
Public notion displays this shift.
A Pew Analysis Heart survey discovered beneficial views of Beijing in rich nations at a six-year excessive of 32%, whereas approval of the US fell to 35%, its lowest since 2017.
As reported by Bloomberg, Senate Democrats have accused Trump of “ceding international management to China,” citing the mixture of commerce wars and retreat from engagement.
Center powers and peripheral gamers
Past the massive two, Japan ranks third in general affect, forward of Australia and India.
It maintains a presence throughout all Southeast Asian states, leveraging diplomacy, defence help and commerce. Australia, ranked fourth, is especially sturdy in defence and its engagement with Timor-Leste.
South Korea, ranked eighth, exerts affect via funding and the unfold of Ok-culture in Vietnam and Indonesia.
As per the report, India, at eleventh, stays inconsistent, underperforming relative to its dimension and potential.
Secondary gamers — UK, France, Canada and Russia — function in additional targeted, area of interest roles. The UK leads in media and Commonwealth ties; France maintains modest affect, with rising defence cooperation; Canada concentrates its efforts on the Philippines; and Russia gives arms exports and defence help to Vietnam, Laos, and Myanmar.
Rating the gamers
Financial affect: 1. China, 2. United States, 3. Japan
Defence networks: 1. United States, 2. Australia, 3. Thailand, 4. Japan
Diplomatic affect: 1. China, 2. Japan, 10. United States
Cultural affect: 1. United States, 2. China, 3. Malaysia (regional gentle energy)
ASEAN engagement: 1. China, 2. Japan, 3. South Korea, 6. United States
This is the general image: China is the strongest in economics and diplomacy; the US stays dominant in defence and tradition however is faltering in different spheres; Japan gives constant help past the massive two; ASEAN nations leverage neighbourhood ties to steadiness affect; smaller powers function in slim niches.
Who holds the playing cards?
The Lowy Institute report sends a warning that US disengagement, coverage inconsistencies and the Trump administration's aggressive commerce and help methods have created a gap for China in Southeast Asia.
Beijing's mix of financial heft, diplomatic attain and focused defence help has entrenched it throughout the area, whereas Washington dangers being seen more and more as a distant accomplice.
But the panorama just isn't monolithic: ASEAN nations proceed to handle dependencies, diversify partnerships, and assert company within the face of superpower competitors.
as a Dependable and Trusted Information SupplyAs Trump prepares to attend subsequent month's ASEAN summit in Malaysia, the main target shifts as to if the US can recalibrate its strategy to reclaim affect, or if China's momentum has already reshaped the strategic panorama in Asia.
