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XI’S CHARM OFFENSIVE IN SOUTHEAST ASIA |
Between April 14 and 18, Chinese President Xi Jinping is visiting three Southeast Asian nations: Vietnam, Malaysia, and Cambodia. His trip comes at a time of heightened global economic uncertainty, as the United States imposes aggressive tariffs on both geopolitical rivals and economic partners, disrupting international markets and signaling tougher times ahead. Cambodia stands out as a close political ally of Beijing and a consistent supporter of Chinese positions within ASEAN. In contrast, Vietnam and Malaysia are crucial economic partners, deeply integrated into regional supply chains and increasingly reliant on Chinese investment and market access. These visits are not only reinvigorating China’s diplomatic engagement in the region, but also serve as strategic maneuvers by Beijing to counter mounting pressure from the United States, which has been felt across the entire region. Xi has emphasized how there are “no winners” in the trade war ignited by the US, framing the current confrontation as not only as harmful to China, but also as a threat to global economic stability. |
1. Trump targets Asia. Xi’s tour coincides with Washington’s latest tariff offensive, which targeted China in particular – now facing a staggering 145% tariff rate on some of its exports. These measures have prompted China to respond with a corresponding 125% tariff on US imports, entangling the two governments in what is rapidly becoming a full-fledged trade war. Vietnam, Malaysia, and Cambodia have also been significantly affected, being hit by US tariffs respectively as high as 46%, 24% and 49%. Although tariffs on the Southeast Asian nations have been suspended, their economies remain vulnerable to potential trade shocks. Due to their trade surplus with the US and their roles as transshipment hubs for Chinese goods, these countries have been accused of facilitating indirect Chinese exports to the US, putting them in Washington’s crosshairs. 2. China’s offer. Over the past years, China has become the largest trading partner for ASEAN nations, with bilateral trade reaching more than $790 billion in the first 10 months of 2024. Its role, however, extends well beyond that of a simple trading partner: indeed, Chinese investments are flowing heavily into infrastructure projects, ranging from ports and railways to telecommunications. In Cambodia, for instance, Beijing has funded the reconstruction of a naval base that – in a clear sign of growing strategic influence – is also accessible to Chinese military forces. As such, during this visit, Xi is expected to sign around 40 bilateral agreements with Vietnam– including a landmark deal for a railway project backed by over $8 billion in Chinese loans – and similar agreements are expected during the visits to Malaysia and Cambodia. 3. Navigating a delicate balance. Southeast Asian nations are walking a diplomatic tightrope, as they seek to strengthen ties with China without jeopardizing crucial relationships with the United States. ASEAN countries have grown increasingly reliant on access to Chinese markets and, while many of these countries are rich in natural resources, they often lack the industrial capacity or scale to process them cost-effectively, making China a key supplier. At the same time, after Trump’s tariffs imposition, all three nations have made diplomatic overtures toward the White House in an effort to ease tariff Being perceived as in geopolitical alignment with China could hinder collaboration with the US and even trigger retaliatory trade measures. 4. Fear of Chinese market flooding. Beyond diplomatic calculus, these countries also worry about the potential negative fallout from increased Chinese influence. One major concern is the potential influx of Chinese dumping because of China redirecting exports away from the US market due to tariffs. Chinese overproduction and resulting dumping of low-cost products could threaten local industries across Southeast Asia, undermining domestic markets and employment. Furthermore, tensions persist between China and several Southeast Asian nations over territorial disputes in the South China Sea. Beijing’s expansive maritime claims, which contradict international rules, continue to be a source of friction, adding a layer of geopolitical complexity to Xi's charm offensive. |
Xi Jinping’s tour of Southeast Asia underscores Beijing’s intention to position itself as a stable, long-term partner in a region increasingly caught in the crossfire of US-China strategic competition. With Washington ramping up tariffs, the timing of Xi’s visit is anything but casual - it is a direct response to growing US pressure on Asia as a whole. For countries like Vietnam, Malaysia, and Cambodia, this moment demands careful calibration. For years, these nations have relied on a delicate dual-track strategy: reaping the economic benefits of their relationship with China, while simultaneously relying on the United States for strategic balance and protection against excessive Chinese influence. That two-pillar equilibrium is now under strain with the US turning increasingly protectionist and punitive. As a result, these countries may feel they have fewer incentives to maintain alignment with Washington, and more reasons to deepen ties with Beijing. The risk for Southeast Asia is to suffer “collateral damage” in the broader trade and geopolitical contest between the two superpowers. While Xi’s charm offensive may offer short-term gains, it is unlikely to resolve the region’s deeper dilemma: how to avoid choosing sides in a confrontation that is increasingly difficult to ignore. Countries once considered the winners of US-China competition - thanks to their ability to benefit from both sides and for being preferred destination for friend-shoring - now face the prospect of being among its first casualties as Trump attempts to halt exports of Chinese companies regardless of the place of production – be it Mexico, or Vietnam and Malaysia. |
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