Southeast Asian Approaches to US-China Tensions and Possible Responses to a Taiwan Conflict
Southeast Asian Approaches to US-China Tensions and Possible Responses to a Taiwan Conflict acabral-sanche Wed, 07/22/2026 - 13:40 SVG Reports Jul 22, 2026 Hudson Institute Southeast Asian Approaches to US-China Tensions and Possible Responses to a Taiwan Conflict John Lee Senior Fellow Lavina Lee Senior lecturer in the Department of Security Studies and Criminology at Macquarie University, Council of the Australian Strategic Policy Institutenbsp; John Lee Lavina Lee Reports Caption A Philippine Air Force Black Hawk helicopter lands on June 29, 2023, on Mavulis Island, which is the Philippines’ northernmost island and is roughly 88 miles from Taiwan. (Getty Images) Toggle Table of Contents Contents Contents Share to Twitter Twitter Share to Facebook Facebook Share to LinkedIn LinkedIn Share to E-mail E-mail Print Print View full report with maps and figures. Preparation of this report was supported by the Australian Department of Defence through the 2025–26 Strategic Policy Grants Program. The report does not necessarily represent the views of the Department of Defence or Australian Commonwealth government. Executive Summary This report is divided into three chapters. Chapter 1 delves into the strategic mindset of several Southeast Asian states and discusses the essential elements of statecraft that they have pursued to manage risk and maximize opportunity from deepening United States–China tensions. This section also examines the significant differences between the hedging strategies these countries have chosen, which have been shaped by distinct strategic cultures, geographies, and material considerations. Chapter 2 compares US and Chinese influence in Southeast Asia, focusing on the normative, institutional, and material factors that shape the perceived and actual opportunities and constraints these countries face. While not necessarily decisive, these factors are relevant to an understanding of how the countries view US-China tensions, and importantly, a potential conflict over Taiwan. This section also explores the material and nonmaterial ways that China has built dependencies and manipulated the risk and opportunity calculations of Southeast Asian states. Chapter 3 offers two separate but related assessments based on the analysis in chapters 1 and 2. The first discusses whether Southeast Asian states will likely continue to distance themselves from Taiwan diplomatically and institutionally to comply with Chinese demands, as tensions deepen between Beijing, on the one hand, and Washington and Taipei, on the other. Put differently, are current trends likely to continue, assuming those tensions do not lead to overt conflict over Taiwan? The second assessment covers how these countries think (or are likely to think) about a conflict if one becomes imminent. What are their response options? This is different from the question of what they would do during a conflict in tactical and operational terms, which is dependent on specific wartime scenarios not covered by this report. This chapter then reviews the strategic options, constraints, and dilemmas these countries face as US-China tensions deepen over Taiwan, including in the event of a probable or imminent Taiwan conflict. It assesses how these elements would shape their responses to such a conflict. Assessing how these Southeast Asian states think about a conflict over Taiwan, how they would respond, and what they believe the United States or China might demand of them is far more difficult. For many of these countries, properly considering such a terrifying and complex situation is almost taboo. Yet these assessments are necessary, given their urgency and importance, and the authors hope this report will significantly advance the conversation. Methodology How do Southeast Asian governments, elites, and experts think about their strategic environment and managing the deepening US-China competition? How do they think about a possible US-China conflict, which is most likely to occur over Taiwan and less likely over disputes in the South China Sea? How might they respond to a conflict over Taiwan? These are the important questions this report seeks to answer, beginning with two others: How do Southeast Asian governments and elites think about notions such as strategic opportunity and strategic risk, and how do these notions inform their hedging strategies? What structural interests and constraints do they face in making these determinations? The two questions are clearly related, with one shaping the other. How people think about risk and hedging strategies is heavily dependent on actual or perceived structural interests and constraints. Regarding the first question, hedging strategies are more complex than is commonly understood. Many tend to associate such strategies with managing risk—minimizing negative developments. While this is indeed critical, just as important, though commonly ignored, is managing or pursuing opportunity even in the face of uncertainty. An exclusive or disproportionate emphasis on the risk management approach of Southeast Asian hedging strategies produces inaccurate or misleading insights. Indeed, the common tendency to focus only on how Southeast Asian entities and individuals pursue risk management while ignoring their pursuit of gain leads to the incorrect conclusion that their hedging strategies are unduly passive. Therefore, the research, analysis, and conversations with interlocutors undertaken for this report focus just as much on how Southeast Asians perceive strategic opportunity. The assessments in this report are necessarily speculative. No Southeast Asian interlocutor could—or would—give a comprehensive or consensus view on the ramifications of growing tensions and the possibility of US-China conflict. Therefore, the approach here is to offer instead a deeper understanding of how Southeast Asian actors think about interest, risk, and opportunity. The countries studied in this report are Indonesia, Singapore, Malaysia, Vietnam, Thailand, and the Philippines. The authors conducted research and analysis and, in addition, held dozens of focused conversations with interlocutors from these countries. The report is an assessment arising from these conversations.[1] 1. The Strategic Mindset of Southeast Asian States The Strategic Environment Southeast Asian elites and experts seem to broadly agree about the strategic environment that will emerge in the region over the next decade. First, they widely see the US-China rivalry as inevitable and structural in an ideological, historical, and material sense. Ideologically, the United States was never going to consider China’s Leninist nature acceptable. Implicit in this perspective is that the Chinese Communist Party (CCP) has no intention of liberalizing and that outside actors have little or no agency to change this. Historically, many Southeast Asians believe the West misunderstood China’s future trajectory. In their view, the history of US-China relations since the 1970s has been a story of naive American and Australian expectations of Chinese liberalization and of China actively concealing its paranoia and insecurity vis-à-vis the West. Materially, Southeast Asians appear to follow a structural realist logic in believing that the rapid rise of Chinese material power would inevitably result in a deepening rivalry with the US superpower. As a related but additional factor, many Southeast Asians are convinced that the United States is hardwired to reject being surpassed in material terms, whether or not the challenger is an ally. There seems to be a strong assumption that Washington will seek to contain Chinese power regardless of Chinese behavior and policies. Second, many Southeast Asians believe that the US-China rivalry is the predominant dynamic shaping their future environment. Other so-called middle powers (such as Japan, South Korea, India, and Australia) can change some of the two rivals’ tactics and approaches but cannot significantly alter the primary dynamic or trajectory between them. The assumption is that this is a bipolar rivalry playing out on an ostensibly multipolar stage. Given China’s growing comprehensive power, the regional order will not remain liberal, as this requires US hegemony, which is less likely to endure. Instead, it will become a hybrid and disorganized set of arrangements with a combination of liberal, hierarchical, and authoritarian characteristics. For the purposes of this report, a liberal order is one in which sovereign states formally have equal rights and privileges. In a possible emerging hybrid order, countries would acquire relatively more or fewer rights and privileges based on their relationships, strategic cunning, and usefulness to the United States or China. Third, virtually all of the authors’ interlocutors fear that the region will become more fractured as countries pursue a divergent range of balancing and hedging strategies to make the best out of the emerging environment. There will thus be little genuine strategic cooperation or coordination between middle powers such as Australia and the smaller Southeast Asian powers. As a result, many Southeast Asians expect that the Association of Southeast Asian Nations (ASEAN), whose members are smaller powers, will become increasingly irrelevant as its ability to regulate great-power competition diminishes, causing member states to seek unilateral or minilateral non-ASEAN pathways to cooperation. Southeast Asian elites broadly agree that the exceptions would be a small band of advanced economies that are US allies—Japan, Australia, and perhaps South Korea—which have the most to gain from closer strategic, economic, and technological alignment with the United States. However, the general belief is that for Southeast Asian states, hard alignment with the US or China would be too risky, as the enduring benefits of such irreversible decisions would likely come at enormous cost. Our interlocutors also believe that such a fractured strategic order will benefit China more than the United States. This is due to geoeconomics and geostrategy. As the permanent power in the region, China will have the advantage of a natural economic and military presence in the fracturing environment, while the US will have to work ever harder to maintain its economic and military presence and relevance. Many Southeast Asians thus believe China would be rational in quietly enabling the fracturing of the region and that it will likely do so, while the United States has the harder task of persuading or compelling countries to align with it rather than China. Beijing can also more easily increase how much Southeast Asian states depend on its economy and supply chains than the US could. The Essence of Southeast Asian Statecraft In the American and Western tradition, proactive statecraft is defined as shaping the strategic environment to render it more favorable to a nation’s interests and values. However, the Southeast Asian notion of statecraft tends to be quite different, with many in the region starting from the premise that their nation, and Southeast Asia more generally, structurally lacks agency to influence strategic outcomes. In other words, shaping the external environment is not the object of statecraft. In fact, it is treated almost as an externality or independent variable, with the structure essentially given or imposed and not affected by other variables that Southeast Asians can manipulate. Hence, proactive statecraft does not involve shaping the emerging regional hybrid order to Southeast Asian states’ liking, but maximizing the rights, privileges, and gains they can extract from the hybrid order while managing risks and minimizing threats. As a result, these smaller Southeast Asian states do not always focus on which principles or systems they prefer but on positioning themselves best to negotiate rights, privileges, and gains from the two great powers, regardless of what principles or systems are on offer—and to manage risks and threats in the process. Indeed, from a pragmatic perspective, putting aside moral or ethical considerations, some Southeast Asians would argue that smaller states would not necessarily do better in the so-called free and open Indo-Pacific that countries such as Australia, Japan, and until recently, the US favored.[2] Indeed, according to some Southeast Asians, under certain circumstances, their countries might acquire better relative and absolute gains in a hierarchical or authoritarian order if they were cunning and smart enough to do so. In other words, while they would not have greater strategic agency, they would still be able to position themselves as well as possible in the hybrid order imposed on them. One implication is that for many Southeast Asians, the predominant threat is not necessarily in the advance of a more assertive, revisionist, and powerful China—as Americans and Australians commonly assume—but in developments that would weaken or eliminate the smaller states’ capacity to make the best out of this hybrid order. For this reason, Americans and Australians are mistaken in reflexively assuming that all Southeast Asian actors consider China to be the region’s predominant threat or that military security or territorial integrity are their principal strategic concerns. Relatedly, Southeast Asian elites often complaint that previous American administrations were forcing the region to “choose sides.” The determination not to do so by making irreversible strategic decisions (as Japan and Australia have done) is driven not just by the prospect that a state might choose the “losing side,” but by the belief that the act of choosing undermines a country’s ability to maximize its position and prospect of gain in the emerging hybrid order. For this reason, many in Southeast Asia believe that while Washington has been futilely pushing the region to commit to positions with unproven benefits, Beijing is busily negotiating ad hoc terms with these same nations. In this context, many Southeast Asian interlocutors argue that China is “winning” and the US is “losing.” In addition, the prospect of a region in which China surpasses the United States in power and influence is unwelcome but less terrifying than the prospect of disruption, overt rivalry, or war—considered the ultimate strategic disaster. This is because these would likely lead to absolute losses for all nations and weaken or eliminate Southeast Asian nations’ capacity to maximize gains in the hybrid order, thereby destroying their agency, as defined above, to determine their future. How Southeast Asian nations hedge and balance against China’s disruptiveness and assertiveness is therefore not always the most important question; rather, it is how they hedge and balance against China’s disruptiveness and assertiveness and US demands. Southeast Asians argue that just as some elements of Chinese policies and behavior should be countered and constrained, some elements of US behavior should as well. Indeed, they believe that the US attempt to prevent the partial emergence of a hierarchical authoritarian order is futile and could be as dangerous and disruptive to the region as assertive Chinese behavior. Southeast Asian Perspectives on the Future Hybrid Order For many Southeast Asians, the region’s future is fraught and fragile. They have little faith that a so-called concert of middle powers will emerge in an environment defined by serious and permanent US-China tension. The main reason is that this concert—a group of countries uniting to avert war and preserve the territorial status quo—is impossible when the two largest regional powers are rivals that cannot cooperate to produce or sustain such a concert. The region’s elites are also skeptical that any of the middle or smaller powers could organize the concert or, in fact, that any entity could play such a role. Those who think this way quietly but firmly dismiss the possibility that ASEAN can fill that gap. Indeed, a loose consensus has concluded that the organization will become increasingly irrelevant as the US-China relationship deteriorates. They see ASEAN as too weak and divided, and they both praise and dismiss it as a “convenient fiction” that will be increasingly exposed as the two great powers grow further apart. Moreover, even if the middle powers attempted to construct a concert, it would be irrelevant as the United States or China could simply ignore it. In addition, many in Southeast Asia expectation that Japan, Australia, and perhaps South Korea will be drawn ever closer to the US as the strategic environment becomes increasingly contested. This will remove two, if not three, crucial players essential to any middle-power activism. As a result, Southeast Asian states will not place their faith in any concert of powers but will focus on managing and negotiating an acceptable arrangement with both great powers. In any event, the region’s elites widely agree that any concert would favor China, the resident and faster-growing power, not the United States, and would have to offer Beijing ever-more concessions to keep the peace. They sense that a concert of middle powers could credibly oppose either China or the US, given the disparity in material power. For this reason, almost all Southeast Asian elites dismissed the recent call by Canadian Prime Minister Mark Carney for middle powers to become more active and form discrete blocs[3] as a dangerous delusion. Many interlocutors argue that a concert of middle powers is impossible or irrelevant, or would even help enhance Chinese power. Indeed, some suspect that China might well encourage the emergence of a middle power concert, since Beijing would benefit more than Washington. According to many Southeast Asians, the more likely scenario is that ad hoc bilateral and minilateral arrangements will proliferate between smaller powers and the two great powers. The emerging environment will thus not be a unified rules-based order—whether liberal or illiberal—but a region of messy and overlapping arrangements subject to constant negotiation and renegotiation. As one Singaporean interlocutor put it, smaller states will thrive or struggle based on how well they understand and execute “the art of the deal” with more powerful nations. This leads to the question of how Southeast Asian elites view the emerging status quo, as many of them, unlike the US, Japan, and Australia, do not define it as preserving key elements of the existing order and current boundaries and territories. Instead, they define it broadly as a dynamic state in which Chinese power and presence are growing “naturally” in the region. Working from this definition of a dynamic status quo, here are several prudential principles some of the Southeast Asian interlocutors held: Resisting the expansion of Chinese power too directly is resisting the status quo and is potentially destabilizing. The more prudent course of action is to manage the expansion of Chinese power. This includes Chinese assertiveness and claims in the South China Sea. While some Southeast Asian states certainly identify Chinese territorial revisionism as a threat, other voices in the region suggest that pushing back too robustly or recklessly against a naturally expanding China might also threaten stability. Taiwan’s integration into China is a foreseeable, perhaps irresistible part of this status quo, as is a permanent and expanding Chinese presence in the South China Sea. China might well accept external management of its growing power, albeit reluctantly, including by the United States. However, the more Washington and its allies resist Beijing overtly, the more coercive and disruptive China is likely to become, rendering the environment worse for small Southeast Asian states. An unsuccessful attempt to deter China could lead to a more dismal outcome than if deterrence was never properly attempted in the first place. Finally, for many Southeast Asians, the risk of US and allied overreach in deterring and containing Chinese expansionism is almost as significant an issue as the expansionism itself. Implications for Southeast Asian Agency Behavior that is seen as passive by one state, with its own traditions of strategic culture, could be viewed by another as proactive and creative. For many Southeast Asians, strategic agency seems to be generally defined as controlling the pace and nature of competition rather than contributing significantly to the balance of power. Southeast Asian states can do little about the deepening US-China rivalry; the best that they can do is to slow the pace of escalation to avoid war. In the current period, Southeast Asians largely view strategic agency as achieving better terms and arrangements with both the United States and China. In their refrain that they do not want to be “forced to choose,” the operative word is forced, and they are most resentful when Washington or Beijing overtly forces choices on smaller countries. In this context, strategic entrapment is one clear sign of strategic failure. Southeast Asian states already feel entrapped in a structural sense because they are in a region defined by a US-China rivalry that they cannot change or escape. Nevertheless, they seek to avoid the entrapment of being compelled to join one great power against the other in a zero-sum situation. Strategic entrapment is very similar to being forced to choose. This partly explains why Southeast Asian neighbors criticized the Philippines for hosting American military assets that are likely to be used against China in a Taiwan contingency. Many Filipinos argue that allowing American use of Philippine military bases was a necessary decision since a more accommodationist stance toward China did not lead to Chinese concessions or a softening of Beijing’s claims over Philippine territory. On the contrary, it led to bolder and more aggressive Chinese incursions. They argue that, in this sense, entrapment was better than a substantial loss of sovereignty. Southeast Asians often respond to this perspective by arguing that the Philippines’ view of sovereignty and related rights is too absolutist, that the passions of the people in the noisy Philippine democracy result in rash and reckless decisions, and that hosting US military bases leaves Manila vulnerable to extreme entrapment. Others argue that hosting American military assets only makes sense if it leads to a significant change in the balance of power and if Washington gives an iron-clad commitment to use military force to defend the host country’s interests—two conditions many in other Southeast Asian nations are skeptical will be met. For this reason, many Southeast Asians argue that the Philippines has diminished its capacity to “hedge” in creative ways by giving the United States basing rights. Indeed, even many interlocutors from Southeast Asian claimant states in the South China Sea make a distinction between sovereignty over a country’s continental territory and its maritime territory. The former is nonnegotiable, while they are prepared to negotiate with China on the latter. They believe that defending a country’s maritime territory against encroachment is not worth the risk of entrapment, which they see as disastrous. Differences Among Southeast Asian Nations While this report discusses a Southeast Asian approach, there are clearly important differences among Southeast Asian states, each with its own geography, strategic culture, and political constraints. However, the report seeks to identify common mindsets and approaches rather than to focus on the idiosyncratic policy approaches of different governments. Therefore, what follows is a more general assessment of important elements of the strategic hedging approaches these states pursue. The Philippines Experts often point out that the more equidistant approach of the Rodrigo Duterte administration toward the United States and China is relatively normal for the Philippines, while the more confrontational policies of the administrations of Benigno Aquino III or Ferdinand “Bongbong” Romualdez Marcos Jr. are the exception. Even so, while previous leaders, such as Fidel Ramos and Gloria Arroyo, emphasized friendship and the importance of economic relations with China over strategic and territorial disagreements, Beijing’s activities in the region, including in the South China Sea, were far more constrained in the 1990s and the first decade of the 2000s than when Duterte came to power. Duterte, who was eager to bury or at least keep in his back pocket the 2016 Permanent Court of Arbitration award—an international ruling that rejected China’s claims in the South China Sea—was the first president to openly call for downgrading the US alliance in favor of a quasi-alliance with China. The views of Duterte, with his visceral anti-Americanism, were quite distinct from the broader culture of Philippine strategic elites. He believed that the Manila elites—his mortal political enemies—cared most about US interests, perspectives, and values. Indeed, his rejection of pro-US views was an intrinsic part of his individual and political positioning in the Philippine political landscape, and he attempted to set himself apart from the usual “swamp” of elitist politics by rejecting what he saw as American quasi-imperialism and hypocrisy. The end of the Duterte era and the start of the Bongbong Marcos era in May 2022 restored the influence of the “deep state” bureaucrats, professional advisers, and civilian and military officials, as well as academics, policymakers, and influential commentators, who did not generally agree with Duterte. The Filipinos who spoke with the authors expressed strong disagreement and even disgust with Duterte’s approach to the US-China competition and South China Sea issues generally. Although they are still wary of relying on the United States, they generally accept that Duterte got the balance wrong and decreased his country’s strategic options. Indeed, the Philippine interlocutors were adamant that the “deep state” and opinion leaders were not defeatist or willing to submit to China, but in fact, were prepared to sacrifice blood and treasure if other countries, such as the United States, Japan, and Australia, were prepared to do the same. Moreover, they were willing to consider how the Philippines might become a more effective strategic player and hedge more cleverly to maximize its options, even if doing so attracted a greater risk of Chinese retaliation and coercion. This explains the recent decision to allow the Americans to use four bases in the Philippines. Importantly, there is widespread acknowledgment that a closer relationship with Washington and its allies is the key to making the Philippines a more effective strategic actor. According to this thinking, the more important a strategic role the country plays, in concert with the United States and its allies, the more credible US security guarantees will be. Thailand Thailand has long boasted of its flexible foreign policy approach, which aims to avoid tension with major powers while maintaining freedom of action. However, several aspects of the Thai hedging approach and mindset have led Bangkok to take a far more relaxed approach than other Southeast Asian countries to Chinese strategic objectives and security. According to Thai interlocutors interviewed for this report, many Thai elites view China as the most important economic power in the region, including for Thailand. Thus, the contest for economic leadership and dominance is already over, with China the decisive and permanent winner. Many older Thai elites and experts argue that China is widely admired for its wisdom, civilization, culture, and recent economic achievements, and believe that contemporary China is fair and generous. According to this argument, a country that accepts the authority of Beijing as “big brother” can share in the successes of partnership with it. For example, elites point to Thailand’s 2003 early harvest free trade agreement with China, signed seven years before the ASEAN-China Free Trade Agreement, as evidence of Bangkok’s special relationship with Beijing. While some of the younger elites are more skeptical about China’s benevolence than many older elites, a large number of the younger ones remain convinced that Thailand enjoys a special relationship of something approximating “kinship” with China and expect that Beijing will continue to offer Bangkok privileged access and take great care to ensure that Thai concerns are addressed. In contrast, many older and younger Thai elites describe the United States under Presidents Barack Obama and Joe Biden as “spiteful,” “selfish,” “inconsistent,” “interfering,” or “judgmental.” The obvious reference point was the deterioration in the bilateral relationship during the Obama administration after the 2014 coup, though the US-Thai alliance was already under strain. While they perceive Chinese entreaties to the Thai military government at that time as evidence of Beijing’s “noninterference” in Thai affairs, these elites often complain that the United States attaches “self-serving” and “hypocritical” conditions to the relationship. The debate about President Donald Trump was extensive. Some described his administration as “selfish” and “inconsistent” but not “interfering” or “judgmental.” Furthermore, some older Thai elites are convinced that the United States will matter less over the next decade or two and that Washington could play a useful role in “balancing” or “moderating,” much like the role Japan played, but that it will likely matter less to Bangkok and perhaps the region. Similarly, they believe the system of alliances and the roles played by countries like Australia would be helpful but not overly important. On the other hand, a mainly younger cohort believes that the Trump administration represents a changing US approach that is more transactional and focused on material gain but less judgmental. For some Thai elites and experts, this means a more constructive US ally, as it increases Thailand’s strategic options. They believe that the Trump era and beyond could represent a new deal between Washington and Bangkok. This is something they cautiously welcome, as the alliance was widely seen to be a fading relic from another age. More generally, Thai elites from all generations, including in the military, view the threat of domestic instability—demonstrated by the election of antimilitary parties in 2023—as larger than the threat from the great powers.[4] They also fear there could be instability if the military seeks to hold on to power. Notably, the authoritative Thai document National Security Policy and Plan 2019–2022 put forward three overarching objectives: (1) maintaining the monarchy, national sovereignty, and independence; (2) safeguarding national security; and (3) preserving public order.[5] The document provides a list of 15 national security measures being prioritized. Only two refer directly to external threats; even then, they do not identify a specific state actor and relate to threats against domestic stability or capacity. For this reason, the plan places far greater value on countries seen as enhancing Thailand’s domestic stability. One of the best ways to achieve domestic stability is to create economic opportunity. To the Thai interlocutors, the value in Beijing’s support for Thai economic development, regardless of the type of regime it is, contrasts starkly with the tendency of liberal-democratic governments to promote an abstract set of principles without regard to the consequences for Thai domestic politics and society. Overt hostility toward Western democratic nations like the United States is not conspicuous, but there is a perception that Thais need not listen to these countries. It is in this context that the Trump administration seems more interested in commercial opportunity than democracy promotion, representing a breath of fresh air for many Thai elites. The upshot is that many Thais see little need to resist China’s bid for dominance in the region, either because they do not perceive it as a major security threat or because it is in any event inevitable and largely benign for Thailand. These perspectives have a profound impact on how Thailand implements its “flexible” strategic posture or hedging strategy. Bangkok believes that it can best maximize its strategic options in the longer term by deepening the “kinship” with China, regardless of Beijing’s occasional prickliness and demands. Perhaps counterintuitively, many Thais reason that the longer it takes to recognize and accede to Chinese dominance, the weaker Thailand’s relationship with China will be in the future, and the fewer and poorer its strategic options. In this sense, Thailand is not seeking to avoid making a “choice”; it is choosing a region with Chinese dominance and welcoming that world as being conducive to Bangkok’s interests. This also means that Bangkok does not believe it is seeking short-term gains while increasing longer-term costs, because it does not believe China will damage its interests in the longer term. From this perspective, the rational cost-benefit approach is to focus only on immediate or short-term gains. According to this approach, the United States is a useful counter-bargaining chip for Thailand to use to achieve a better outcome on price or capability in its partnering with China. But Bangkok has little interest in pursuing a counterdominance or even a traditional hedging strategy against Beijing. For many Thai elites, maintaining the alliance with Washington is more about keeping the United States sufficiently onside and less about fears of China. Vietnam Vietnamese interlocutors revealed that their country is one of the top two or three Southeast Asian nations China is targeting through diplomatic overtures, such as official and elite visits and party-to-party relations. Even so, virtually all political, bureaucratic, policy, economic, and social elites believe China to be an immense threat to Vietnamese sovereignty and interests and are deeply distrustful of Beijing’s intentions. More than this, the interlocutors were adamant that Vietnamese elites believe that a “sacrifice of blood and/or treasure” might be necessary to protect Vietnam’s sovereignty and national interests against Chinese actions, and that this is not too high a price to pay. Indeed, they suggested that almost all elites, and not just from the military, believe that Vietnam’s willingness to “give China a bloody nose” might be the most effective deterrent. That across-the-board psychological preparedness to sacrifice blood and treasure and inflict some pain on China seems to be unique in Southeast Asia. In the authors’ assessment, the strategic realism and clarity of Vietnam’s elites toward China exceeds that of any other Southeast Asian country, even if execution is not always effective. Vietnamese officials and elites, more than those in the other Southeast Asian countries assessed in this report, are focused on maximizing their long-term strategic options and room for maneuver, even if there are short-term challenges and opportunities. Hanoi appears most cognizant of the long-term strategic and security costs associated with short-term economic benefits. The upshot is that, while Vietnam is still a strategic hedger seeking to maximize its freedom of action and avoid any overcommitment, it is adopting forms of hedging that focus more on longer-term risk contingencies and management than on optimizing short-term returns. In this strategy, what is paramount is indirect balancing (e.g., through building up Vietnam’s capabilities or forging strategic partnerships) and dominance-denial (by avoiding economic and political subservience to China). The pursuit of short-term gain and economic pragmatism should not contravene these more important priorities. The Vietnamese interlocutors pointed out that this mindset is evident in the evolution seen in Vietnam’s defense white papers from 1998,[6] 2004,[7] and 2009.[8] All these documents formally reaffirmed the “three noes”—no military alliances, no aligning with one country over another, and no foreign military bases on Vietnamese territory. Yet the 2009 document identified “territorial disputes” as a threat to national security for the first time. Importantly, it called for more “cooperation both bilaterally and multilaterally,” also for the first time. While cooperation does not explicitly mean alliances, or targeting another country or foreign military bases, the 2009 white paper emphasizes the importance of “defence ties with all other countries on the basis of respect for each other’s independence, sovereignty and mutual benefit.” In squaring this with the three noes, the document argues that “defence cooperation is one of the most important factors for maintaining peace and stability in the region and the world as well, and it is also an important factor for achieving Vietnam’s defence goals.”[9] In 2016, the government released the “Overall Strategy for International Integration Through 2020, Vision to 2030,” which stated that Vietnam will make greater efforts to “intensify defense and security relations with strategic and comprehensive partners.” The objective of such efforts is to enhance Vietnamese strategic freedom and independence, sovereignty, territorial integrity, and other core national interests.[10] Hanoi’s defense diplomacy efforts have targeted the United States, Japan, and India (in that order). Nevertheless, Vietnam does not expect that other countries will come to its aid militarily in the event of a conflict with China. Hanoi is as realistic about what military exchanges, port visits, and participation in regional defense forums can achieve as it is about implementing mottos such as “more friends, fewer enemies.” However, Vietnam’s increased emphasis on defense diplomacy needs to be understood as part of a broader strategy to increase the country’s importance to major and regional powers—and the regime’s legitimacy. This includes: Positioning Vietnam as a contributor to regional peace and stability through support for international law and the sovereign and legal rights of all states—an implicit endorsement of the free and open Indo-Pacific (FOIP) initiative Increasing the importance of Vietnam as a complicating strategic and military factor for China in the South China Sea Developing the economies of the coastal cities and connecting them to supply chains in Southeast Asia and other great power economies to deter China from disruptive behavior in Vietnam’s exclusive economic zone (EEZ) A dominance-denial mindset is evident in Vietnam’s economic policies. According to an estimate by the Global Infrastructure Outlook, Vietnam will need infrastructure investment of around 605 billion between 2017 and 2040, two-thirds of which will need to be for energy and roads.[11] This ought to have made China’s Belt and Road Initiative (BRI) difficult for Vietnam to resist. Yet Vietnam is more skeptical of the BRI than any other Southeast Asian country examined for this report. Although Hanoi formally engages with the BRI, it has insisted that the principles of “sustainability, effectiveness and inclusiveness” are paramount and that guiding frameworks should be based on “consensus, equality, voluntariness, transparency, openness, mutual respect and benefits, and compliance with . . . international law.”[12] More importantly, when it comes to finding partners for projects or financing them, Vietnam’s highest priority is to prevent overdependence on China—a mindset that became entrenched after the 2014 incident in which China set up an oil rig in South China Sea waters claimed by Vietnam. This is achieved through: Minimizing or even refusing Chinese loans for critical infrastructure such as steel mills, coal-fired generators, high-speed railways, and major highways Prioritizing funding from Japanese, South Korean, and other countries in these critical sectors (especially energy), even if it is less attractive commercially than funding from China Seeking to draw Chinese funding into diversified public-private-partnership (PPP) structures as much as possible, including encouraging domestic consortia to apply for Chinese loans within a PPP structure instead of pursuing a government-to-government transaction Enacting regulations and laws that implicitly target Chinese companies, such as the 2014 laws on construction and environmental protection and standards, which targeted low-cost and low-quality Chinese contractors in the thermal energy sectors Participation in multiple economic regimes such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Eurasian Economic Union (EAEU), which do not involve China According to the Vietnamese interlocutors, their country takes this approach because it has very few pro-China elites or factions. The public view of China is overwhelmingly negative, and if Hanoi failed to stand up to Beijing, the political elites would perceive this as a threat to the regime. The interlocutors discounted the idea that close relations between the communist parties of both countries could soften relations and emphasized that party-to-party relations would not overcome the deep strategic distrust between the two countries. In fact, they consider the party-to-party relationship a means for Vietnam to gather intelligence on what is really happening inside Chinese politics and how political fissures within the CCP might evolve. Interestingly, Vietnamese policy experts, academics, and even officials took China’s domestic fragility and economic vulnerabilities more seriously than did elites in other Southeast Asian countries. None underestimated Chinese power and the challenge that it poses, but most elites apparently do not believe Chinese dominance is inevitable or that Beijing is largely undeterrable. In recent years, Vietnam has been acting on its assessment that the United States is the only check against China, while insisting that its long-standing hedging mindset remains. Previously reluctant to signal closer alignment with Washington, Hanoi eventually agreed to the comprehensive strategic partnership framework in 2023. In addition, since 2018, it has hosted US aircraft carriers every two years, participated in US-led military drills such as Rim of the Pacific (RIMPAC), and upgraded its annual naval engagement activity with the United States. It has also been purchasing significantly more American weapons since the US arms embargo was fully lifted in 2016. Vietnam consistently supported US-led freedom of navigation operations in contested waters and was quick to endorse the AUKUS (Australia–United Kingdom–United States) trilateral security partnership when it was announced in 2021.[13] This reflects a growing consensus among Vietnam’s strategic elites and experts that a hedging policy that keeps their country genuinely equidistant from the United States and China is no longer in Vietnam’s interest and that the benefits of partial alignment (with Washington) outweigh the risks and costs. Notably, many in Hanoi were sympathetic to, and even approving of, a US approach advocating winning the comprehensive competition against China rather than merely managing it.[14] Malaysia Malaysia prides itself on having mastered the art and science of hedging.[15] Its strategic culture and hedging approach can be difficult to read because it seems to be pursuing contradictory and inconsistent policies. For example, Kuala Lumpur’s political messaging and rhetoric tend to be very supportive of China and Chinese objectives. At the same time, Malaysia continues to participate in US-led exercises like Cobra Gold, RIMPAC, and Southeast Asia Cooperation and Training (SEACAT), and bilateral exercises like Keris Strike and Cope Taufan. Regular military exchanges, education, and training continue, while US warships still use Malaysian ports for maintenance and resupply. The United States and other allies have assisted Malaysia with improving its maritime domain awareness capabilities in the South China Sea, including through Washington’s provision of 12 ScanEagle drones through the Maritime Security Initiative. Malaysia’s defense relationship with China is still weak by comparison. However, the Malaysian interlocutors, having characterized their country’s approach as a “light hedge,” expressed the belief that its policy of nonalignment and equidistance was beginning to lose its moorings and that Kuala Lumpur was tilting toward China. To explain this, they noted that Malaysian elites’ perspectives on China are guided primarily by their need to maintain internal legitimacy. They explained further that the majority Malay population demands two things from its leaders: a defense of its bumiputra special economic privileges and continued economic development. In the last quarter of the previous century, the Barisan Nasional (BN) coalition was credited domestically with engineering Malaysia’s steady move up the development ladder. Prime Minister Mahathir Mohamad, who served from 1981 to 2003, was the first to take a pragmatic economic approach to Chinese trade and investment. According to the interlocutors, the country’s faltering economic performance in the first decade of this century diminished the BN’s electoral appeal over successive elections and drove the government of Najib Razak toward an even deeper embrace of Chinese investment under the BRI. This became a lifeline enabling him to extract himself from graft allegations associated with the 1Malaysia Development Berhad (1MDB) scandal, in which some 4.5 billion was allegedly misappropriated from a Malaysian sovereign wealth fund. Successive governments, including the current one, led by Anwar Ibrahim, have not shifted away from an economically pragmatic approach to China. They have overlooked risks to Malaysia’s sovereignty because of the need to establish and shore up electoral credibility. The current government’s primary agenda has been to consolidate the government’s finances, reduce government debt, and bolster its credentials as a “clean” government. The interlocutors also noted the electorate’s growing frustration with the ability of the post-BN governments to turn around Malaysia’s economic performance; to put forward positive economic initiatives rather than deflecting blame onto the previous government; and to demonstrate their ability to govern effectively. The result is that Malaysia remains, in political terms, structurally dependent on Chinese investment and trade.[16] Without a more active pursuit of diversification in its current trade and investment strategies, future Malaysian governments will find their freedom of action even more restricted in the long term. Moreover, Malaysian interlocutors, like those from Thailand, believe that their country’s elites have absorbed many of China’s positive narratives and see China’s rise as inevitable and its upward trajectory as assured. Further, Malaysian elites are beginning to accept the broader narrative that those who support China’s rise will be benevolently rewarded under the new order. That China immediately compensated Malaysia for rejoining the BRI in 2019 with promises to buy palm oil products—which were earning Malaysia 20 billion a year and had been jeopardized by the European Union decision to phase out palm-oil-based biofuels—reinforced this perspective. The current leadership also appears to have a benign view of the implications of a coming Chinese-led order. Moreover, Malaysia’s economic dependency on China has deeply affected its approach to defending its interests in the South China Sea. Like other claimant states, Malaysia has directly experienced bold encroachments into its EEZ in the South China Sea by ships of the People’s Liberation Army Navy. This has occurred every year since 2013—near James Shoal, South Luconia Shoal, and North Luconia Shoal. In some of the incidents, Chinese fishing boat flotillas disrupted the access of Malaysian fishermen. Malaysia’s response has been muted; its governments have tended to prefer to quietly increase air and sea patrols in these areas, suppress news of the incursions, assure the public of Malaysia’s continuing control over these waters, and lodge quiet but ineffective diplomatic protests. Notably, Malaysia has avoided direct confrontation with China on the sea to ensure its economic benefits are not put at risk. Moreover, Malaysia has significant budgetary constraints, and these are likely to continue. Even now, its naval assets are smaller than those of the China Coast Guard vessels active in disputed waters, which maintain a near continuous presence around South Luconia Shoal off the state of Sarawak. Given these real material constraints, ineffective diplomatic protests and lawfare are among Malaysia’s few options to try to hold its ground against Chinese claims. Moreover, Malaysian interlocutors noted that their country would have an extremely difficult time withstanding any Chinese pushback or threats of economic coercion, and there was a sense that Malaysia would always back down. They see this dynamic as likely to be entrenched for the next few decades. Singapore The interlocutors from Singapore are convinced that their strategic elites are the most sophisticated and intellectually engaged of all the elites examined in this project. To be sure, conversations with Singaporeans on strategic issues tend to be far more productive and profound than those with other partners in Southeast Asia. Even so, Singapore is an important case study because its perspectives on the United States, China, and the region are moving in troubling directions. Experts have often described Singapore as having a siege mentality due to the inherent vulnerabilities resulting from its small size, lack of strategic depth, dependence on trade for all essential resources, vulnerability to naval blockade, location within a neighborhood it does not trust, and lack of formal allies it can rely upon to come to its aid. Singapore’s mindset and strategy are thus entirely geared toward ensuring its survival, prosperity, and sovereignty as a small and vulnerable state. As a result, it supports principles that are necessary to safeguard a small and weak maritime nation: the rule of law, freedom from coercion, freedom of navigation, and a commitment to international institutions and the predictability and protections they offer smaller countries. It positions itself diplomatically as an “honest broker” but supports US strategic actions to maintain the American naval presence in the region. Moreover, Singapore ensures it is a valuable and constructive partner for countries such as the United States, Japan, and Australia, and its formal agreements with these countries are meaningful and consequential. Singapore also generally adopts a more rigorous analytical approach to ensuring it is not overly reliant on China economically and technologically, even if it has not taken a hard line on companies like Huawei in comparison with the Five Eyes (the US, UK, Canada, Australia, and New Zealand). The absence of corruption and the presence of robust institutions helps protect Singapore against Chinese attempts at elite capture, even if business stakeholders take a more benign view of China than strategic elites do. Although Singaporean interlocutors concede that the notion of ASEAN as an actor is something of a convenient fiction, Singapore places great emphasis on the organization for enhancing the role and voice of smaller countries with respect to great powers. This includes ostensibly setting regional agendas and defining conversations through the ASEAN convening process, such as ASEAN+1 dialogue partner arrangements or broader multilateral platforms like ASEAN+3 and the East Asia Summit. In defending its own direct interests, Singapore can be feisty. In the words of a previous Singaporean ambassador in Canberra in a conversation with the authors, when “pushed into a corner, we grow thorns.” This is not mere rhetoric. On issues such as foreign influence or interference in its institutions, Singapore has been prepared to take diplomatic heat from China. A special source of concern for Singapore is that, because it has an ethnic Chinese majority, China believes it should be sympathetic and deferential to Beijing. As Bilahari Kausikan, former permanent secretary of Singapore’s Ministry of Foreign Affairs, has argued, the fact that “overseas Chinese are expected, on crucial issues, to define their interests in terms of China’s interest” is an “existential issue” for Singapore. If they did so, this would mean that Singapore accepted China as a “geopolitical fact” and “China’s superiority as a norm of international relations.”[17] Acceptance would be tantamount to accepting a Sinocentric order within which Singapore would no longer be truly sovereign. Note that an ethnically driven foreign policy would undermine the core basis of national identity and social harmony in Singapore, which is based, as Kausikan puts it, on “multi-racial equality and multi-racial meritocracy” (as distinct from a Chinese national identity).[18] The country initially adopted that position to improve relations with Muslim-majority neighbors, and it now plays a part in the ongoing conditioning of Chinese expectations and shores up internal societal resistance to foreign influence. Interlocutors expressed frustration over Beijing’s repeated refusal to respect Singaporean perspectives on this issue. Why, then, are recent and current leaders becoming increasingly deferential to Beijing? According to some Singaporean interlocutors, the problem begins at the top. One illustration is former Prime Minister Lee Hsien Loong’s Shangri-la speeches,[19] which tended to take a middle position on US-China relations by subjecting both parties to equal criticism. In doing so, his speeches tended to bypass or downplay China’s coercive and illegal actions in the South China Sea against other claimants and in the Taiwan Strait, while calling on the United States to “integrate China’s aspirations within the current system of rules and norms.”[20] In the context of Chinese behavior and Xi Jinping’s stated aims, Beijing would interpret this as a weakening of Singaporean resolve on the importance of international law—and a win for Beijing’s coercive tactics. It could also be interpreted by others as the gradual Singaporean normalization of Chinese coercion and expansionism. One interlocutor expressed growing concern that Singapore has not adapted its “honest broker” approach in the face of accelerated China aggression and coercion. If only one great power is revising the territorial and political status quo, and in a negative direction, remaining in the “middle” or continually calling for restraint by all sides is effectively acquiescing to the revisionist power. After conversations with interlocutors and analysis of recent Singaporean behavior, the authors assess that Singapore is institutionally hardwired to maintain a close strategic and defense relationship with the US and its allies. Nevertheless, some Singaporean leaders and elites apparently believe it is more important to avoid incurring Chinese displeasure and to protect the fiction of ASEAN’s centrality than to achieve fundamental strategic objectives like counter-dominance and dominance-denial. This elevates diplomatic convention and prudence over genuine strategy. Many of Singapore’s leaders and elites who are focused on putting constraints on China are increasingly frustrated with this policy. The interlocutors noted that those seeking a more “stable” relationship with China are apparently unprepared for the reality that any pushback is intrinsically disruptive and unpredictable—and that Singapore should not routinely reject disruption and unpredictability, especially when the goal is to challenge normalization of Chinese assertiveness and revisionism. In short, according to Singaporean interlocutors, many in the country do not fully appreciate that an aversion to disruption and unpredictability plays into China’s hands. Beijing wants smaller states to accept that it is undeterrable, that the extension of its power is unstoppable, and that resistance is futile. Singapore is inadvertently strengthening those Chinese narratives, even if many of its citizens explicitly reject the argument that Chinese dominance is inevitable. Moreover, the interlocutors noted that in the contemporary environment, in which China’s strategic objectives appear fundamentally inconsistent with those of the US and its allies, the role of a Singaporean honest broker is less relevant than in the past, when there were still credible hopes that China would emerge as a responsible stakeholder and status quo strategic power. These interlocutors argued that attempting to be an honest broker in the current age means Singapore will become too accepting of China’s coercive and revisionist actions. Indonesia According to the authors’ interlocutors, Indonesia’s decision-makers believe that China is strong and growing as well as on an inevitable upward trajectory. These leaders have little appreciation of China’s political and economic challenges or the negative impact they may have on its future power. However, while most Indonesian elites view relations with Beijing as a source of economic benefit in the short term, they are apprehensive about the possible return of a Chinese hierarchical order, which they want to actively avoid or at least delay. Beijing’s policy and actions around Indonesia’s Natuna Islands have contradicted the positive narratives about how China’s rise will benefit those who support it. The interlocutors view the persistent incursions by Chinese fishing fleets into the islands’ EEZ—with the overt support of the China Coast Guard—as a direct challenge to Indonesia’s territorial sovereignty, its status and rights as an archipelagic state, and an indicator of how China will treat others in the region as it continues to rise. The narrative that China’s economic rise will “lift all boats” has not changed the Indonesian public perception that Chinese investment and trade are a threat to national economic sovereignty and primarily benefit Chinese, rather than Indonesian, interests. Thus, Indonesia’s hedging strategy has not demonstrably shifted in Beijing’s direction. Rather, more voices are increasingly convinced that, in its relations with China, Jakarta should keep a balance between maximizing returns (primarily economic) and risk contingency (primarily economic diversification and indirect balancing)—and that Washington is an important balancing force. Understanding Indonesia’s hedging mindset, and its relations with both the United States and China, starts with its longstanding independent and active foreign policy philosophy, which was formulated in the 1940s and continues to be deeply ingrained in its strategic thinking. The policy’s objective is to ensure strategic autonomy, and it involves two strategies: maintaining pragmatic equidistance between major regional powers, and omni-enmeshment of these powers within institutional frameworks. Pragmatic equidistance precludes formal alliances and favors limited alignments that allow Indonesia to exploit the benefits of strategic partnerships with many great powers simultaneously. In circumstances when strategic uncertainty exists, no power can be seen to be favored over any other, in order to maximize flexibility, security, and economic choices in the long term. When looking at Indonesia’s response to Chinese initiatives in recent years, many of the interlocutors from the strategic community are privately scathing when discussing the Joko Widodo (Jokowi) period (2014–24). They believe Jokowi was primarily focused on propelling trade and immediate economic development and had little interest in the nuances of geostrategy, assessing foreign relations and institutions narrowly in terms of the direct (and immediate) economic benefits for the nation. With a narrow tax base, his government was keen to source funding for infrastructure development that did not involve government capital or a financial guarantee, and China duly offered to provide more funding for maritime infrastructure development. This explained Jokowi’s insistence that the Maritime Silk Road component of the BRI was highly compatible with his own Maritime Toll Road (Tol Laut) initiative, which envisages the development of ships, harbors, and port facilities in West and East Indonesia to improve internal and external trade. Apart from Jokowi’s uncritical approach to greater Chinese investment, interlocutors repeatedly mentioned the role played by specific ministers—who stood to benefit, personally and through their patronage networks—in awarding infrastructure contracts to Chinese state-owned enterprises (SOEs). Indeed, the Jokowi era arguably represents a period in which Indonesia undermined its own strategic hedging approach—managing both risk and opportunity to ensure it is well-positioned regardless of future developments—either out of short-term economic desperation or strategic and policy incompetence. One interlocutor put it like this: Indonesia’s growing reliance on China as an export market for low value-added goods is not opportunity management. Nor is its deepening reliance on Chinese capital—especially for electric vehicle (EV) sectors such as nickel production—and on Chinese technology and intermediate inputs for local manufacturing.[21] Rather, these policies represent a thoughtless or reckless pursuit of short-term gains without regard to longer-term ramifications. For example, Chinese firms have achieved strong and often dominant positions in some of Indonesia’s most important strategic sectors, controlling about 75 percent of the country’s nickel-refining capacity, and Huawei provides most of the country’s telecommunications infrastructure.[22] This violates the enduring Indonesian hedging strategy, which aims to maximize long-term strategic flexibility and autonomy. He added that merely issuing the occasional objection to Chinese incursions into Indonesian waters does not make Jakarta’s approach a prudent hedging strategy. One can draw similar conclusions about Indonesia’s growing defense diplomacy with the United States. In 2019, this included more than 240 military engagements, among them the Cope West air exercises, joint training between the US and Indonesian air forces, and joint maritime awareness exercises.[23] This gave US defense officials the misleading impression that Jakarta would play a more assertive role in checking Beijing’s activities in the South China Sea.[24] The authors’ negative assessment of the Jokowi period is aligned with a conversation with a senior adviser to President Joe Biden, who expressed astonishment that Jokowi, when meeting with the president, was uninterested in any strategic discussion and was interested only in immediate promises of investment for short-term gain. This episode suggests that recent Indonesian approaches to great powers have been less about genuine strategic hedging, which can include contradictory approaches, and more about seeking immediate gains in the guise of sophisticated hedging behavior. It is too early to assess President Prabowo Subianto’s approach, even if his early decisions suggest a tilt toward China. For example, he chose China as the destination for his first overseas visit as president; Indonesia became the first Southeast Asian nation to join the BRICS Plus, a China-dominated grouping that includes Brazil, Russia, India, China, South Africa, and other countries;[25] and he attended China’s Victory Day Parade to mark the eightieth anniversary of the end of World War II.[26] Some Indonesian interlocutors argued that certain factors limit how much their country can move closer to China: persistent economic nationalism, anti-Chinese public sentiment, and the dispute over Chinese fishing fleets entering the Natuna Islands’ EEZ. Indonesia’s high level of economic nationalist sentiment is likely a result of the widespread public perception that the ASEAN-China Free Trade Agreement from 2010 led to an influx of Chinese consumer goods that crowded out domestic producers, with the trade balance shifting in China’s favor for some years. After 2015, the public became increasingly skeptical about the employment benefits arising from joint Sino-Indonesian projects, and citizens grew increasingly discontent over the Jokowi administration’s guardianship of the national interest. Many Indonesian elites are suspicion about China’s motives, and almost all interlocutors believed the country is too vulnerable to Chinese economic dominance via the BRI. They noted that Chinese projects are under much more scrutiny than those led by firms from countries such as the US, Japan, South Korea, or Singapore. The final apparent constraint on closer Indonesian ties with China is Jakarta’s intent to defend the Natuna Islands’ EEZ from the recent and increasingly bold incursions by Chinese fishing vessels. These have raised deep concerns of a threat to Jakarta’s sovereignty over the islands, its control over their maritime resources, and its broader territorial and maritime legal rights under the United Nations Convention on the Law of the Sea. Moreover, China, in asserting access rights and legal claims over the waters of the Natunas, has clearly undermined the credibility of its “benevolent hierarchy” narrative Even so, in the authoritative 2025 ISEAS – Yusof Ishak Institute survey of regional policymakers and elites, more than 72 percent of Indonesian respondents said they would choose strategic alignment with China over the United States.[27] Regardless of national sentiment, which can also change significantly in other Southeast Asian nations from year to year, political leaders and experts in countries such as Vietnam, Singapore, and perhaps Thailand offer a more persuasive argument that their countries are implementing a genuine hedging strategy. This is much less the case in Indonesia. In its national policy and practice, Indonesia remains a case study in the realities and implications of economic and institutional weaknesses and vulnerabilities.[28] This renders a coherent and sensible implementation of a genuine strategic hedging strategy less likely, which will have implications for how Indonesia views conflict and what its response to conflict will be. Conclusion Southeast Asian elites are deliberately opaque and ambiguous about where they stand on various issues and use the cover of neutrality or indifference to prevent great powers from forcing them to choose sides. This leads Americans, and Australians to a lesser extent, to criticize Southeast Asian governments and elites for being strategically passive. As explained, this accusation stems from the inability of many Americans to understand profound differences between the Western and Southeast Asian definitions of strategic risk and opportunity, which often leads Americans to confuse genuine forms of strategic hedging with fence-sitting or passing the buck.[29] This is not to deny that Southeast Asian states often engage in fence-sitting, passing the buck, or muddled thinking, perhaps even due to corruption or narrow elite interest. But a failure to understand prevalent and enduring forms of true Southeast Asian strategic hedging will lead the US and its allies astray. The definitions and execution of hedging are deeply embedded in Southeast Asian strategic discourse. For example, some argue that hedging pertains to the vast gap between fully committed balancing on the one hand, and fully committed bandwagoning on the other.[30] Others focus on the deliberate ambiguity of signals that these states give to great powers as they flirt with both alignment and autonomy, or independence.[31] The purpose of both diplomatic and strategic ambiguity is to avoid abandonment, entrapment, or overt coercion by a great power. For purposes of this discussion, there is no need to engage with the vast academic discourse on hedging. The authors see Southeast Asian strategic hedging simply as an approach to free up states to pursue opportunity, manage risk, and minimize threats, regardless of future developments and actions by great powers. The most constructive approach is to assess how these states define terms such as opportunity or threats to explain how their unique geographies, histories, and strategic and political cultures affect their view of possible conflict in the region. The definition of opportunity or threats is never purely objective or uniform. For example, the fear of abandonment by the United States is a more important factor in the Philippines than in Thailand. The fear of entrapment is a more important consideration in Singapore than in Vietnam. Malaysia seems to focus more on pursuing immediate opportunity than on managing risk, including minimizing threats. These factors will be considered in greater depth in chapter 3. 2. Comparing US and Chinese Influence in Southeast Asia Chapter 1 discussed the strategic mindset of Southeast Asian states, providing a summary of key differences in interests that explain their differing strategic perspectives. This chapter compares US and Chinese influence in Southeast Asia, providing additional insight into the material conditions in which Southeast Asian countries craft and implement hedging strategies. Assessing this broader terrain of material and nonmaterial influence is important because it shapes these smaller states’ calculations of material and nonmaterial opportunity and risk. A steady stream of surveys, articles, and data suggests that China, not the United States, is “winning” in Southeast Asia.[32] All these assessments have similar findings, including that China has geographical advantages as the resident great power; that US diplomacy, engagement, and policy are inconsistent; that specific US policies have displeased Southeast Asian elites, such as American support for Israel in Gaza; and that China presents immediate and growing economic benefits to Southeast Asian economies, even if overall, China benefits disproportionately. The authors do not dispute much of the existing scholarship on this issue but offer an assessment not just of where Southeast Asian governments seem to be heading, but of why China is largely winning, what winning means, and the factors underlying China’s relative success. These factors include the effectiveness of Chinese strategic narratives, differences in the structure of Southeast Asian countries’ economic interactions with the United States and China, and the impact of these factors on elite interests and perspectives. Comparing US and Chinese Economic Influence in Southeast Asia The assessment that the United States is losing Southeast Asia has grown from a murmur to a chorus, given some decisions by the Trump administration that are broadly unpopular: Trump’s so-called Liberation Day tariffs; US support for Israel; withdrawal of US developmental assistance; the administration’s skepticism of multilateral processes and institutions that offer comfort to Southeast Asian nations; and the general America First rhetoric emanating from Washington. Trump’s critics in Southeast Asia argue that current US policies are damaging America’s standing in the region.[33] However, the United States was allegedly “losing” before Trump returned to office, and China was already outperforming the US in diplomatic and institutional engagement. The long-lasting impact of current policies can also be overstated. The Gaza issue will eventually be stabilized if not resolved. Tariffs will eventually be factored into government-level and firm-level calculations. The point is that a more in-depth structural assessment is needed of US and Chinese economic influence prior to Trump’s return to office. Conversations with US officials often begin with them quoting favorable statistics regarding the American economic role in Southeast Asia. For example, in 2023, the United States was the top source of foreign direct investment (FDI) in ASEAN member states by a large margin, with 74.4 billion, while intra-ASEAN investment came second at 21.9 billion, China third at 17.3 billion, and Hong Kong fourth at 15 billion.[34] While around 90 percent of US FDI goes to Singapore, because the country has a stable economy and reliable legal system, it serves as a hub to redirect capital to developing ASEAN economies. Moreover, Americans counter the well-known statistic that China is the largest trading partner for all ASEAN economies by arguing that much of the China-ASEAN trade is intermediate goods, with the US economy remaining far more important as the destination for finished products. Furthermore, Southeast Asia’s trade-to-GDP ratio reached a peak of 156 percent in 2005 and has been declining steadily since then, to around 116 percent. Arguably, the main contributors to this decline are protectionist policies and resource nationalism by Indonesia, Malaysia, the Philippines, and Thailand. Additionally, ASEAN’s share of value added in merchandise goods (especially electronics) has declined as China has moved up the value-added ladder in manufacturing processes. In other words, from an American perspective, China is increasingly displacing Southeast Asia in merchandise trade and production. According to this assessment, and due to predatory Chinese policies that prioritizes its interests over those of Southeast Asian, US economic standing and influence in Southeast Asia remain more robust than surveys and common sentiment might suggest. Such assessments about American standing and influence seem overly optimistic. It is revealing to contrast the industries US investors are targeting in Southeast Asia with those targeted by Chinese investors. About 70 percent of US FDI goes to the finance and insurance sectors, while more than 35 percent of Chinese FDI goes to the manufacturing sector and 20 percent to the wholesale sector.[35] This is not to dismiss the importance of finance and insurance, two dynamic sectors in Southeast Asia, which Singapore dominates. However, it is worth considering the pathways of Chinese FDI in Vietnam, Malaysia, and Indonesia. Chinese firms are relocating and investing in Vietnam due to rising Chinese wages, and in many instances, to bypass US tariffs against China, though this is less the case now. In the critical electronics assembly sector, crucial for generating well-paid jobs for low- and semi-skilled workers, Chinese firms have moved in at scale to set up component manufacturing and assembly plants. Vietnam’s proximity to China, relatively open trade and investment policies, productive labor force, and good logistics have positioned it to attract labor-intensive manufacturing from China. China has become a major investor in the textile and garment sectors, which are also important industries for low-skilled workers. Although US firms are large investors in Vietnam in these sectors as well, the difference is that Vietnam-based textile and garment firms have become reliant on Chinese raw materials. In Malaysia, China is now entrenched and is gaining share in almost all key sectors that Western firms once dominated. Chinese firms such as Huawei are competing with US firms such as Intel, AMD, and Texas Instruments in manufacturing high-tech electrical and electronics components. Western cloud computing firms such as Amazon Web Services and Google Cloud continue to dominate, but Huawei and Tencent now invest heavily in Malaysia’s data centers. Chinese firm Geely has acquired stakes in Proton, Malaysia’s national car brand, and Chinese companies now compete with entrenched US firms like ExxonMobil and Dow Chemical in funding critical refinery capabilities and related infrastructure. In addition, Chinese firms have established a significant presence in the nationally important palm oil plantations and processing facilities in Malaysia. The growing Chinese economic presence in Indonesia is perhaps the most striking development. In recent years, China has raced past Japanese competitors and now dominates the manufacturing of EVs in Indonesia, which has become the epicenter of global competition to control the EV value chain. This growth was largely financed by Chinese investors backed by China’s state-owned banks, such as the Export-Import Bank of China, the China Development Bank, and the Bank of China. Chinese firms like Tsingshan Group, Zhejiang Huayou Cobalt, and Jiangsu Delong Nickel Industry Co dominate Indonesia’s nickel and stainless-steel industries. The country now has three large industrial estates focused on nickel processing, the largest being the Indonesia Morowali Industrial Park, majority owned by Tsingshan Group. On the site of what was once dense forest, the industrial park stretches over 8,000 acres in Central Sulawesi and employs around 90,000 workers. The facility has at least 20 nickel smelters with coal-fired power plants, a seaport, an airport, dedicated underwater communication cables, dormitories and facilities for workers, hotels, and mosques. Chinese investments of similar scale are planned for Sulawesi and North Maluku. The number of Chinese companies operating in Southeast Asia and partnering with local firms has grown from around 2,600 in 2012 to 6,500 in 2022,[36] and they are involved in more industrial sectors than US firms in the region (see chart 1). Increased Chinese investment in Southeast Asian manufacturing is especially significant because manufacturing remains the central driving force for job creation and economic growth in developing economies (see chart 2). This represents a transition from earlier Chinese FDI, which focused on mining and oil exploration (e.g., in Malaysia and Indonesia) as well as metals and minerals, toward the development of special economic zones and industrial parks (e.g., in Indonesia, Vietnam, and the Philippines). In short, the future growth of manufacturing in Southeast Asia is becoming more dependent on Chinese partners, capital, and inputs. This brief survey does not suggest that the United States is insignificant. On the contrary, US finance and know-how remain indispensable to the region’s further rise. Southeast Asians widely regard US and other Western firms as better partners and employers than their Chinese counterparts. However, this report’s net assessment is that China has greater economic influence, which all regional surveys comparing Chinese and US economic importance reflect. China increasingly exercises ownership or control of the productive capabilities of the developing economies at the expense of US and other Western economies. This extends from hard infrastructure to digital infrastructure. Regarding the latter, China prevails over the United States in the developing economies, even if US high-tech companies such as Amazon, Microsoft, Google, and Netflix have the largest footprint in the region’s consumer digital economy. For example, Huawei is the key telecom infrastructure provider for every Southeast Asian economy except Singapore. The more prominent Chinese presence in Southeast Asian manufacturing and the dependency of these sectors on inputs from China are also relevant. For developing economies that rely far more on manufacturing than services to generate jobs, ownership or control over manufacturing, inputs, and merchandise assembly is important. It is highly significant that Chinese firms enjoy a greater presence and relevance in booming and productive sectors such as electronics, EVs (see chart 3), solar panels, batteries, and related areas like energy infrastructure and production, as well as mining. The Chinese focus on greenfield investment (see charts 4 and 5) and construction activities is also creating new commercial facts on the ground that entrench Chinese influence as well as Southeast Asian dependency on Beijing. The issue is not the growing Chinese corporate presence in these key manufacturing areas. Southeast Asians continually complain that China is capturing ever more of the value added in regional supply chains, and Chinese firms in Southeast Asia tend to bring in Chinese citizens to fill key positions. This slows or minimizes knowledge transfer, further entrenching Chinese advantages and increasing the region’s dependency on Chinese finance, technology, know-how, and inputs. Southeast Asian partner firms and employees often do not have alternatives and must buy into this production and supply chain ecosystem. The evolving East Asian production zone is beginning to resemble a Sinocentric hierarchical economic and commercial order added to the existing civilizational, strategic, diplomatic, and military hierarchy. Within this order, China can increase or decrease commercial benefits as a reward or punishment. Since Southeast Asians view statecraft as the ability to extract guaranteed absolute gains or privileges from larger powers, their elites define economic and commercial success as concluding agreements with Chinese entities that have immediate and guaranteed benefits, even if the agreements heavily favor the Chinese entity. As an adviser to Malaysian Prime Minister Ibrahim Anwar told the authors in a conversation in late 2024, “we all have performance anxiety, and 20 percent of something is worth more than 100 percent of nothing.” China has the advantage over the United States in proximity, scale of markets, supply chains, self-reinforcing clusters, manufacturing infrastructure, and transport to and from Southeast Asia production facilities. Examples of transport advantages include new highways from China to Southeast Asia that pass over Vietnam’s east coast and Thailand’s west coast and have slashed transportation costs. There is a high-speed rail line from China through to Malaysia. For five years after the BRI’s launch in 2013, China focused on physical connectivity with economies such as Vietnam, Indonesia, the Philippines, Thailand, and Malaysia. In contrast, American efforts have not come close to matching Chinese capital lending initiatives. These include the BUILD Act, passed by Congress in 2018, which created the US International Development Finance Corporation; the 2019 Blue Dot Network initiative; and the 2021 Build Back Better World Initiative. In addition, there are agreements such as the Regional Comprehensive Economic Partnership (RCEP), which includes Asia-Pacific countries but not the United States. While many in the US dismiss it as a “low-quality agreement,” it does provide some benefits for members. For example, goods produced in any RCEP country with a cumulative regional content of 40 percent or more enjoy the same preferential tariffs regardless of where final assembly occurs or where the product is sold. Moreover, China is active in regional forums and mechanisms that the US would dismiss as irrelevant or obscure, such as the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area. With this economic dynamic and mindset deepening, many Southeast Asian elites are conditioned and resigned to becoming subordinate partners with Chinese entities. Except for Singapore, Southeast Asian economies have very few firms with sufficient technology, know-how, and capital to compete internationally in high-value segments of manufacturing, which means that many are trapped in lower-technology segments. In the past, Western and Japanese firms retained proprietary knowledge on critical inputs, design, and advanced manufacturing processes. Increasingly, it is Chinese firms that enjoy this dominance and the influence that comes from the captive dependency of Southeast Asian partners. As chart 6 shows, the value of China’s exports is almost twice that of Southeast Asia, even though the growth rate of exports for both is similar. Indeed, the future of manufacturing and production in Southeast Asia is increasingly tied to China, and Beijing has linked this emerging economic and commercial arrangement to the previously mentioned strategic narratives and policies it directs at Southeast Asian states. Beijing was up-front about the fact that the BRI is designed to spur “common development” by strengthening infrastructure, networks, connectivity, and people-to-people exchanges. It is not apologetic about the fact that the BRI is China-centric or even that Chinese entities are the primary beneficiaries. China flatters Southeast Asian elites by telling them that their countries or firms form essential nodes for a vast China-centric network. In recent years, as part of the Digital Silk Road element of the BRI, China has been using its well-practiced method of offering “good enough,” cheaper, and immediate options to help developing economies build their artificial intelligence capacity, while the US and other advanced economies are looking to entrench their technological advantage and benefit disproportionately from the AI revolution. BRI messaging admits that Beijing is seeking to build a Sinocentric strategic, economic, and technological order,[37] but says that participation ensures benefits for all. China’s AI strategic plan for developing economies in Southeast Asia involves the following:[38] Offer Chinese entities or entire sectors subsidies, cheap loans, and other state-backed advantages to accelerate AI development.[39] Create ever-expanding supply chains and capability within China for the entire AI stack to dominate supply and accelerate domestic innovation. Offer partners and customers cheaper, faster access to these technologies to expand market access, entrench presence, and deepen dependency on Chinese firms, even if this harms profitability. Design AI applications (such as open-source,[40] free applications built on access to large language models) that increase regional adoption and dependency on Chinese offerings. Offer governments capabilities that maximize reliance on, and allegiance to, China, such as AI-enabled surveillance technologies. A dominant presence will allow China to impose commercial and ethical standards and create institutions relevant to AI. This is a well-trodden and proven game plan that Beijing has used to dominate key sectors and technologies initially developed in advanced economies, such as solar panels and EVs. With this approach, China wins not because it has the better technology or its firms are more profitable; it wins because it has the better strategy and first-to-market advantage that give it presence and increase dependencies, and therefore leverage. The overarching message is that benefits can flow to the entire region only if the great Chinese civilizational state is at the center of its economic, political, and diplomatic life. As Xi Jinping put it to Southeast Asian counterparts in 2016, “When the big river is full of water, the smaller ones never run dry.”[41] In other words, China is the beating heart of the “Asia Project,” and Southeast Asia succeeds only if China does. This “project” is the aspiration for the export-oriented economies of Asia to rise collectively. For many Southeast Asians, China is at the heart of Asia’s collective rise. In their view, China might be coercive and intemperate, but it understands and speaks of the pursuit of a common project, even if this is self-serving.[42] A further corollary to this message is noteworthy. Even if Southeast Asian resentment increases, China’s economic leverage and capacity to coerce are nevertheless advancing. Southeast Asian elites are under pressure to deepen their economic partnership with Chinese entities, even if these entities secure a disproportionate share of economic and commercial benefits. Resistance or disapproval is costly and may lead to disastrous consequences. Finally, a 2020 RAND Corporation study compared the network of board-of-director interlocks between exchange-listed firms in the Asian economies in 2006 and 2020.[43] The study contrasts the relative insularity of firms in 2006 with their deep interconnectedness 14 years later. By 2020, the number of firms in the sample doubled from 9,111 to 21,552, while the number of firms with cross-border ties at the board level increased more than tenfold, from 243 to 2,624. The increased number of firms based in China, as well as the connections between Chinese firms and boards and regional firms and boards, is the most striking feature. This is beginning to resemble a hierarchical Sinocentric economic and commercial order (see charts 7 and 8). China’s Nonmaterial Advantage The growing Chinese economic presence in Southeast Asia is one factor in the competition for influence over the region’s elites. Another is Beijing’s greater emphasis on nonmaterial factors and narratives to increase its influence. The first nonmaterial factor is civilizational power, or historical roles and power. While great civilizations once existed in places such as Indochina, today, only the Chinese, Indian, Japanese, and Western civilizations have survived and thrived. Importantly, nation-states continue to nurture these civilizations with considerable hard power resources and capabilities. States can weaponize civilizational power in several ways. A focus on the longevity and superiority of so-called foundational civilizations introduces a hierarchical element to the subjective ordering of international politics from the perspective of both powerful and weaker states. A nation-state emanating from a foundational civilization has a role and enjoys societal and even moral privileges denied to others. When that nation-state also has significant hard power, it is imbued with a supposed natural right to enjoy even more privileges and legitimacy not available to others.[44] Moreover, this narrative implies that when jostling or negotiating with smaller states, the great civilization power necessarily begins from a privileged and unequal position. For example, the BRI began as a policy framework to relieve pressure from some serious domestic economic problems—including by creating external markets for excess capacity arising from massive chronic overinvestment and by developing stubbornly moribund economies in the inner and western provinces. However, in Xi’s speech at the first Belt and Road Forum in May 2017, he framed the initiative as emanating from the enduring greatness of Chinese civilization as he grandly laid out its vast ambition.[45] Implicit in the weaponization of civilizational power is that if smaller powers demand equality—as the United States promises them—then this is an affront to a state with a great civilization. In fact, smaller states might well accept that demanding strict equality is an affront and even inappropriate. Additionally, although Asia is a geostrategic and historical construct, regional interlocutors frequently stated that Southeast Asian elites do think of themselves as belonging to a distinct “Asian” entity. This entity encompasses East Asia rather than South Asia, meaning that India is seen as having less civilizational power and relevance to many of these Southeast Asian states. The US is a not natural part of this entity, as welcome as its strategic role and presence might be. Within this distinct Asian identity, Japan’s culture and civilization cannot match the material size and presence of China’s, and certainly not when China’s hard power capabilities exceed Japan’s. Countries like Indonesia and Malaysia, which have previously exhibited anti-Chinese sentiment, still see Chinese culture and civilization as naturally and permanently dominant in Southeast Asia, even though there is occasional resentment against Chinese entities, such as firms or communities, or Chinese strategic activities. This all translates into what the United States and others might see as greater passivity in the face of aggressive Chinese activities and policies. Indeed, Southeast Asian states find it easier and more “natural” to complain to the US about its policies since it is an outsider. In many countries, therefore, strategic disagreement with China does not lead to the countering and balancing activities that Western observers might expect. Due to its long history of war against various Chinese dynasties, Vietnam is the only Southeast Asian nation whose national identity is associated with defying and repelling China.[46] In the Philippines, some seek to enlist US help to resist China, yet others consider recent moves to welcome back American forces as “unnatural and risky.” In Southeast Asian countries other than Vietnam, there is a common view that the Philippines is “like a child playing with fire.” Second—and related to the points above—many Southeast Asians sense that Asia should move as one, whatever the destination. The significant instability that would result from a regional war would be a collective disaster and an immense blow to their sense of strategic identity and belonging. Their future would be far worse than if China dominated Asia but the region remained intact and peaceful. Therefore, clinging to convenient and ineffective fictions such as ASEAN is part of their common political and strategic identity. Despite pessimistic predictions about the organization’s future relevance, it offers a measure of psychological security even if it does not enhance geostrategic security vis-à-vis the great powers. So as far as many Southeast Asians are concerned, what Americans might see as passivity is in reality submitting to the evolution of Asia and making the best of it. According to them, a responsible stakeholder of the Asia Project ought to enlist outside powers like the United States to temper Chinese efforts to control Asia’s evolution, rather than resisting these efforts outright. China’s perceived role as a driver of Asia’s collective rise goes a great way toward explaining why many Southeast Asian elites feel alarmed when Americans talk about constraining China’s rise, since they see this as constraining their own rise. If Washington forces Southeast Asians to choose, they cannot exercise their right of statecraft, which is to maximize gains from all larger powers. Moreover, the US misunderstands many Southeast Asian attitudes to hierarchy, which Americans traditionally see as antithetical to principles of sovereignty and equality. The perspective of Southeast Asian elites on this issue is more complex than Americans appreciate. These elites often privately criticize the United States for being hypocritical or delusional for espousing principles of equality to smaller states, or else grudgingly praise it for its cunning. Some Southeast Asian elites believe that when the United States promotes principles of equality, this refers to equality of standing and process, meaning that states and entities within the system formally begin from the same starting point. There will be winners and losers in the system, but that is decided through some form of merit-based competition. This closely resembles the classical liberal conception of competition applied to norms, institutions, commerce, and all other forms of military competition. However, some of those elites argue that the American rules-based system does not offer participants equal standing. For example, there is a common argument that the rules of commerce in the US economic order are designed to align with American firms’ entrenched strengths. Southeast Asian firms often have little choice but to become subordinate partners with American firms that have the know-how, institutional connections, and financing to prevail in an allegedly fair competition. In this sense, American espousal of formal equality is seen as self-serving. Indeed, in the authoritative ISEAS survey taken in 2024, before Trump’s second term, only 22 percent of respondents considered the United States a champion of free trade.[47] This perspective is more prevalent among elites in developing economies such as Indonesia, Malaysia, and Thailand. Those Southeast Asian elites who are less critical of the perceived entrenched advantages for US entities nevertheless argue that equality of process and the US version of merit-based competition often lead to a far greater inequality of outcomes because the United States has a greater ability to benefit from the system it has chosen. In both cases, there is skepticism that the US-backed hierarchical order is fair. Indeed, Southeast Asian elites privately admit that they often prefer China’s patron-client approach because entities low down in the Chinese hierarchical order enjoy supposed automatic and guaranteed privileges when submitting to this order—something the American version does not offer. For this reason, China’s messaging to the Global South—with concepts such as “a common destiny for mankind,” and projects like the Global Development Initiative and Global Security Initiative—is more attractive to elites from smaller states than the United States tends to assume. In the 2024 ISEAS survey of regional elites, more than 60 percent were favorably inclined toward China’s vision of a global community of common destiny.[48] Notably, China’s Global South initiatives and concepts are also a direct assault against US notions of equality and fairness. For China, equality and fairness are about ensuring that all participating nations, firms, and individuals receive some guaranteed benefit regardless of merit. Moreover, notions such as harmony and communitarianism are viewed more favorably throughout Southeast Asia than American notions of individual freedom and social progressiveness and the creative destruction that comes from the ceaseless competition of ideas. Similarly, for Southeast Asian elites, Chinese notions of discipline, hard work, and deference to authority contrast well with American cultural notions of self-worth and individual assertiveness. In its cleverly crafted messages to Southeast Asian governments—and more devastatingly, Southeast Asian elites—Beijing skillfully exploits this combination of civilizational relevance and values, geography, and the supposed benefits of a Chinese regional order based on loyalty and patronage. These messages form the basis of the strategic narratives China relentlessly propagates to elites throughout Southeast Asia. Reduced to their most essential elements, they convey the following:[49] China’s rise to preeminence is inevitable, irresistible, and natural for the Asian region. Those supporting the emerging Chinese order will secure guaranteed benefits in return for deference and respect. Those resisting this emerging order will be isolated and denied the benefits offered to others. The US is an unnatural and transient presence in the region. It is only here due to a historical accident and circumstance. China is the civilizational and economic heart of a rising Asia. Constraining China means jeopardizing the entire region’s potential. Conclusion The preexisting structural and economic factors that affect American and Chinese influence in Southeast Asia are not necessarily decisive, but they are relevant to how these countries view US-China tensions, and a fortiori, conflict. In a sense, these factors serve as a starting point for assessing how elites in these countries might view and respond to deepening US-China tensions or conflict, as they partially determine the elites’ assessments of current and future risk and loss. Analysts should bear in mind that efforts at elite capture through deepening material structural dependencies are an important element of the Chinese strategy for winning over or neutralizing Southeast Asia. Xi Jinping has told Asian countries and other developing regions that “once the water rises, the lotus blooms higher.”[50] And as mentioned earlier, he has said that “when the big river is full of water, the smaller ones will never run dry, and vice versa.”[51] In addition, he has warned that “one single tree is incapable of blocking the wind.”[52] As one might guess, China is the water, and the smaller countries are the lotus; China is also the big river, while the smaller countries are the smaller rivers. In the third expression, the United States is the lonely tree that cannot block the Chinese wind. These words were used in the context of promoting China’s BRI and related plans such as the Digital Silk Road, where China is the central point of a networked Indo-Pacific. These sayings do not amount to much in and of themselves, but there is a strategy behind them. The BRI, Chinese economic plans, and a growing Chinese commercial presence in Southeast Asia are designed to bind smaller states to Beijing’s strategic and economic orbit. Beijing intends to ensure that a material and ideational structure based on China’s centrality and dominance will compel or seduce Southeast Asian elites to favor Chinese interests, especially when there is tension or conflict with the United States. Chapter 3 assesses whether China is likely to be successful in this. 3. Assessing Southeast Asian Attitudes to Deepening Tensions and Conflict over Taiwan China has used diplomatic, economic, and military means to coopt or coerce Southeast Asian countries to gradually support Beijing’s position on Taiwan and reduce their interactions with Taipei. Like the United States and Australia, all Southeast Asian countries have a policy about there being one China. However, in almost all cases, these countries largely align with Beijing’s interpretation of what one China means: that Beijing is the sole legal representative of the single sovereign Chinese state (the one China principle). All Southeast Asian states except Singapore recognize Taiwan as part of this one China, with Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, and Timor-Leste using Beijing’s preferred language that Taiwan is an “inalienable” part of China. Singapore’s position is much more careful and deliberately ambiguous in “recognizing there is only one China and that Taiwan is part of China.”[53] Even then, such recognition is stronger affirmative language than the US position of “acknowledging” Beijing’s claim that Taiwan is part of China (what Americans and Australians call their one China policy). Importantly, and in practice, all Southeast Asian countries have decreased their formal interactions with Taiwan in diplomacy, culture, and institutions over the past decade. This is clear from the authors’ conversations with senior Taiwanese leaders and officials. Moreover, the 2024 ISEAS survey of Southeast Asian elites found that only 5.7 percent of respondents believed their country should “facilitate military support for Taiwan” in the event of conflict in the Taiwan Strait.[54] Following the visit by then–US House Speaker Nancy Pelosi to Taiwan in August 2022, the ASEAN foreign ministers issued a statement warning of “miscalculation, serious confrontation, open conflicts and unpredictable consequences among major powers” and reiterated their support for each member state’s “respective One-China Policy.”[55] Southeast Asian states did not criticize Beijing, even though Beijing responded to Pelosi’s visit with aggressive and protracted military maneuvers around Taiwan.[56] Chapter 3 will offer distinct but related assessments on two topics: Are Southeast Asian states likely to continue to distance themselves from Taiwan diplomatically and institutionally in accordance with Chinese demands, as tensions deepen between Beijing, on the one hand, and Washington and Taipei, on the other? In other words, short of outright conflict over Taiwan, are current trends in Southeast Asian behavior and policy likely to continue? How would Southeast Asian countries be likely to think about conflict if one becomes probable and imminent? What are their broad response options? These are different from the question of what they would do during a conflict tactically and operationally, which is dependent on specific wartime scenarios and will not be addressed here. Conflict as the Ultimate Strategic Disaster Southeast Asian states have two key objectives: Growing richer before their societies become older, which is a key performance indicator. Becoming more prosperous is the measure by which all these governments are assessed, and successful leaders are those who can provide a pathway for the country toward greater prosperity. Pursuing strategic hedging strategies that successfully manage risks and pursue opportunities. As explained earlier, these opportunities largely take the form of securing material privileges and gains from great powers in the region. Some of the implications are as follows: Regarding Southeast Asian approaches to strategic hedging, pursuing opportunity depends especially on extracting benefits and privileges from great powers. In this context, a stable, predictable, and somewhat regulated or contained US-China rivalry might even be beneficial for smaller powers playing one great power off against the other. In the military context, the Philippines, Singapore, Thailand, and increasingly Malaysia have taken advantage of this, allowing the US military to use their territory in peacetime in return for other material or security benefits. These Southeast Asian approaches can continue and be fruitful only if the US-China rivalry does not escalate, including into conflict. A war over Taiwan would end the possibility of strategic hedging in its various forms as pursued by Southeast Asian states. Relatedly, for Southeast Asian states, conflict is the ultimate strategic failure, not only due to the loss of human life and the material destruction that would occur, but also because, in the consensus view of Southeast Asians, it would permanently damage economic and civil interaction between the great powers. Trade, considered the pathway toward prosperity, could not occur in the same way or to the same extent during and after a conflict. Moreover, a conflict would end the Asia Project, that is, the aspiration for the entire region to rise as one. Asia’s breakup in geostrategic terms, as different countries unavoidably took different sides during and after a conflict, would be a collective disaster. In addition to the immense blow this would deal to a Southeast Asian sense of strategic identity and belonging, the end of any conceivable common pathway to prosperity might well cause immense disruption and devastation to current political regimes and economic and social elites in their societies. The ramifications of conflict would be especially acute for countries with weak state capacity and institutions. In the authors’ discussions with Southeast Asian interlocutors, they expressed the belief that Singapore and Vietnam have strong and stable governments but that the governments and institutions of countries such as Thailand, Malaysia, Indonesia, and the Philippines are still evolving and becoming entrenched. If a civil and peaceful pathway toward prosperity through trade and regional economic integration is no longer possible, they believe the ramifications for existing governments and elites are possibly catastrophic and that the continued existence of the nation as currently constructed could be threatened. A US-China conflict would permanently change the trade relationship and structure between the world’s two largest economies. Currently, a vast East Asian integrated production zone, increasingly centered around China, produces the bulk of manufactured goods for the US domestic market. President Trump is trying to change this but can only do so slowly. This structure and economic model would likely not survive a conflict, not only because the traditional export-driven pathway to prosperity would be disrupted, but also because the Southeast Asian political economies, heavily reliant on production for export rather than consumption to drive growth, would need to rapidly adapt and change. An advanced economy such as Singapore, which already has a highly educated and skilled workforce and a mature services sector, especially financial and logistical services, could probably forge a new path. The prospects for the low- and middle-income economies appear worse in the event of conflict. Reorganization of the political economy in developing countries also tends to lead to enormous disruption for elites and governments. Declining Southeast Asian Support for Taiwan This report has outlined why conflict is seen as the ultimate strategic disaster for Southeast Asian states. But why does this lead them to gradually submit to Chinese wishes on the Taiwan issue? For Southeast Asian states, the challenge is this: The situation in the Taiwan Strait is of enormous and possibly existential consequence for them, yet they begin from the assumption that they have limited or no ability to influence events there. So rather than focusing on what to do in the event of a war over Taiwan, Southeast Asian states focus on maximizing rights and privileges vis-à-vis the United States and China and largely treat conflict as an externality beyond prediction or control. Thus, they do not define managing risk as using their material weight to prevent a US-China conflict; instead, they define it as avoiding missing out structurally and permanently on maximizing rights and privileges. This helps explain why most of these states will continue to take an increasingly pro-China approach on Taiwan in the current period of increasing US-China tension, yet in the absence of conflict. Additional reasons are as follows. First and most obviously, there is virtually no cost to choosing a pro-Beijing stance on Taiwan, but there is an enormous cost in siding with Taipei. The reasons for this are structural and are based on US and Chinese policy. As argued in chapter 2, in structural terms, China is far more important than the United States to the productive capacity of these economies. The increasing presence of Chinese firms and entities in Southeast Asia and the connections between firms in Southeast Asia and those in China mean that severing or diluting economic ties with China is much more costly in the immediate term to Southeast Asian material interests. This is not to deny that the US market is critical for Southeast Asian firms. However, their immediate dependency on Chinese entities for daily operations weighs more heavily in the minds of Southeast Asian elites than structural dependency on a vast but distant US market. This structural dependency also interacts with the approaches of the two great powers and ensures that displeasing China on Taiwan policy is more costly than displeasing the United States. Beijing, unlike Washington, rewards or punishes Southeast Asian states and entities based on their Taiwan policy. Additionally, the reward Beijing offers for compliance is immediate—for example, immediate contracts or enhanced access in a partially protected sector—as is pain for noncompliance. Another example is Pelosi’s visit to Taiwan. Beijing would almost certainly have imposed immediate punishments on any country supporting the visit, while Washington did not impose any cost on Southeast Asian states, despite the ASEAN foreign ministers’ statement in the wake of the visit expressing concern that “the recent development in the area” could “destabilize the region.”[57] It is worth noting that for Southeast Asian countries there is also little cost in adopting a more pro-China stance on the Taiwan issue when it comes to economic relations with Taipei. Indeed, they realize that Taiwan needs to deepen economic relationships with them or risk complete irrelevance. In other words, Taipei has no appetite or ability to punish Southeast Asian countries for submitting to Beijing’s demands. Indeed, Taiwan’s total trade with ASEAN reached 190 billion in 2025. ASEAN was the third-biggest trading partner of Taiwan behind the US and China. Malaysia, Singapore, and Vietnam are Taiwan’s top three biggest trading partners in ASEAN.[58] Taiwan is also an important investor in the ASEAN region.[59] Geography is another factor. Displeasing a great power neighbor brings with it far more risk of direct punishment than displeasing a distant great power. For example, China can immediately ramp up its assertiveness and presence in the South China Sea or double down on claims in this contested area. It can deny visas to citizens or licenses to firms from Southeast Asia, creating more problems for neighboring entities than if the United States did the same. As the epicenter of a regional supply chain network, it can disrupt and punish local businesses much more effectively than the US. A further factor is that China exercises increased economic, institutional, and normative influence over many developing countries. As suggested in chapters 1 and 2, this is a deliberate and largely successful Chinese approach to capturing the Global South.[60] While Southeast Asian states have closer informal ties with Taiwan than many non-Asian states, increasingly, most of them are submitting to Beijing’s demands to reduce interactions with Taipei. This includes reducing interactions within institutions of which Taiwan is a member, such as the Asia-Pacific Economic Cooperation. It also includes the failure of Malaysia, Singapore, and Vietnam, members of CPTPP, to properly consider Taiwan’s bid for membership.[61] Second, the Chinese strategic narrative that Beijing will take any risk and pay any price to prevent Taiwanese independence, and in more recent times, to force Taiwan’s integration, is embedded in Southeast Asian hedging calculations. These calculations have also embedded the long-standing US position of strategic ambiguity, or the deliberate uncertainty as to whether the United States will intervene in a Taiwan contingency. Southeast Asian countries have strong doubts about whether the US would conduct a war with a peer competitor over Taiwan, or whether it can do enough over the coming years to build military capability to deter China from integrating Taiwan by force. The result is that while Southeast Asian countries are certain that China will sacrifice considerable blood and treasure to prevent Taiwanese independence or achieve forced integration, they are not certain that the US will use its blood and treasure to stop Beijing from doing so. Moreover, the balance of power in the Taiwan Strait appears increasingly to be in China’s favor, meaning that even if Washington intervenes to defend Taiwan, the probability of a Chinese victory is growing. If Taiwan is more likely than not to be integrated into the People’s Republic of China (PRC) sometime in the future, then Southeast Asian states would be prudent to adopt a more pro-Beijing position on Taiwan. This would put them in a better position now, and presumably in the future, to secure rights and privileges from China. At the same time, this approach still puts Southeast Asian states in a reasonable position to secure significant rights and privileges from the US by supporting other issues that align with its interests. Why support Taiwanese autonomy when it is being diminished and those states can do little about it? Many Southeast Asia elites are relatively comfortable with this dynamic remaining as it is. While they do not wish for the PRC to integrate Taiwan, even if Beijing achieves this goal and becomes more powerful, they view this as less of a catastrophe than a war. This is because the Asia Project and ASEAN might still be viable even with a subjugated Taiwan, but it will certainly fail if there is war. Some estimate that such a conflict would cost the global economy 2 trillion, while others say 10 trillion,[62] and developing countries in the region would suffer disproportionately.[63] For this reason, many Southeast Asian interlocutors hoped that the US would not intervene against China if it threatened to use force against Taiwan, or if it did so. In short, Southeast Asian notions of the status quo, regional stability, and non-provocation assume that there will be gradual diplomatic, political, and institutional disengagement from Taiwan. Economic and people-to-people engagement remains robust, but many in the region assume that this will continue whether Taiwan remains autonomous or is folded into China. Moreover, Southeast Asian states would do anything to avoid a wider regional conflict. Since the best way to ensure there will be no conflict is for the United States to avoid responding to Chinese threats or attacks, Southeast Asian calls for de-escalation are usually directed at Washington or Taipei. In this current period of uneasy peace, Southeast Asia is largely where China wants it to be on Taiwan policy. Southeast Asian Attitudes to Taiwan Strait Conflict It is difficult and awkward to raise the issue of how Southeast Asian states think about a conflict over Taiwan with political leaders, officials, and even independent experts. They are universally eager to assess what the damage would be to the entire region if a US-China conflict broke out over Taiwan, but extremely reluctant to speculate about what their country’s response might be. Official documents might raise the possibility of conflict over disputed claims in the South China Sea but are silent on the Taiwan dispute.[64] The deliberate ambiguity and determined silence are the result of several factors. Most obviously, such a scenario is too complicated to talk about and too terrible to imagine. In addition to the incalculable economic cost, a US-China conflict would decimate the various strategic hedging strategies described in chapters 1 and 2. During a war in the region—whether it is contained or spreads to the South China Sea—these smaller states would be forced to choose sides to a large extent. There is universal agreement among Southeast Asian interlocutors that ASEAN would be irrelevant, accelerating its formal demise. Moreover, with the current uneasy peace, if a Southeast Asian state openly discussed what it might do in the event of conflict over Taiwan, the slighted great powers could immediately respond with punitive measures—over a hypothetical event. Such a discussion could also raise the expectations of one or both great powers about what the Southeast Asian state might be prepared to do, increasing the possibility of entrapment—once again, over a hypothetical event. In a similar vein, a Southeast Asian state that gamed possible responses might cause neighboring states discomfort because they would have to think through the implications for them. To the extent that these Southeast Asian states speak publicly about a Taiwan conflict, much of the focus is on using military, diplomatic, and commercial means to repatriate their citizens from a Taiwanese conflict zone. [65] For these reasons, many Southeast Asian interlocutors respond by retreating into platitudes with assertions that they know to be unlikely or untrue: that they would activate ASEAN to negotiate a peace between the two great powers or would remain neutral in every sense. However, based on inferences from these conversations and the authors’ own analysis, some credible assessments can be made. The easiest one is that if the United States does not intervene during an attack on Taiwan—because it chooses not to or because Taiwan is defeated before outside intervention is possible—then Southeast Asian states will remain neutral and adapt to whatever strategic situation arises when the war is over. For countries like the Philippines and Vietnam, which have competing claims with China in the South China Sea, the future is bleak. The strategic hedging approaches described in chapters 1 and 2 will also become less effective if China is the uncontested power in the region, as hedging to manage risk and achieve gains works best when there is an approximate balance of power. This report does not examine this issue. More pertinent to this report are the complications and dilemmas for Southeast Asia if a Taiwan conflict arises and spreads beyond the Taiwan Strait. This is a credible and perhaps even likely scenario and will be discussed in more detail below. More generally, all Southeast Asian states have declared their strong preference for remaining neutral in a conflict over Taiwan. But as almost all interlocutors concede, Southeast Asian preferences are low on the list of what great powers respect and prioritize in the most extreme of scenarios. Some interlocutors criticized the Philippines for willingly allowing itself to risk being entrapped in a US-China conflict by hosting US military assets and adopting a more confrontational approach to China. Yet many interlocutors fear that other Southeast Asian states might nevertheless be structurally entrapped should the conflict spread beyond the Taiwan Strait. Interestingly, a small number of interlocutors focused on how Southeast Asian states could acquire hard power capabilities to enforce their neutrality against great powers seeking to use their maritime or continental territory for martial purposes. In particular, they raised the possibility of Southeast Asian states developing anti-access/area denial (A2/AD) capabilities to deter outside powers from entering Southeast Asian territory. Interlocutors from Indonesia and Malaysia raised this issue the most. Unfortunately, such notions of “enforced neutrality” seem to be a fantasy. As an assessment by Evan Laksmana explains, the Southeast Asian states investigated for this report lack the A2/AD readiness or capabilities to deny the US or China use of their maritime territory or airspace, notwithstanding some significant advances in acquiring the relevant assets. Nor do Southeast Asian states have the doctrine needed to even contemplate such an A2/AD effort.[66] In addition to a radical overhaul and improvement of existing capability and posture, this would likely require extensive military cooperation between the littoral Southeast Asian states, which is elusive and probably impossible for the reasons discussed in chapters 1 and 2 about their differing strategic interests. Acquiring A2/AD capabilities would also require extensive cooperation and integration with either the US or China, which is tantamount to decisively choosing sides. In any case, neither Washington nor Beijing would be willing to assist a Southeast Asian state to acquire A2/AD capabilities specifically designed to keep its military away. Nevertheless, some Southeast Asian states might be able to achieve a certain level of “wartime neutrality” even if a conflict over Taiwan were to spread to Southeast Asia. This would depend heavily on the shape of the conflict in the region. Even so, there are consequences to remaining neutral that might not be benign. The section below offers more detail on how different Southeast Asian states might respond to a Taiwan conflict. The Philippines The conversation in Manila about how a conflict over Taiwan might affect the Philippines is the most developed and honest in the region. This is because it will likely be more involved in US-led operations than any other Southeast Asian country. The Marcos administration has aligned itself closely with the United States and has joined Japan and Australia in openly moving to counter China.[67] Formally, in the event of a Taiwan conflict rather than one over contested claims in the South China Sea, Manila will need to decide whether to make military installations that fall under the Enhanced Defense Cooperation Agreement (EDCA) available for a US-led effort, and if so, which ones (see map 1). In practice, the decision has effectively been made. Three sites added to the EDCA in 2023 sit in the northern-most island of Luzon, just over 100 miles south of Taiwan. A visit to these facilities will reveal the increasing presence of US forces and the growing importance of the facilities to Taiwan contingency planning. In the spring of 2023, the US and the Philippines launched their largest-ever joint war games.[68] In late 2024, the US deployed mobile medium-range Typhon missiles in the Philippines for the first time.[69] It is doubtful that Beijing puts much stock in occasional declarations that these facilities will not be used to support wartime efforts against the People’s Liberation Army (PLA).[70] Indeed, President Marcos admitted in 2023 that it is “very hard to imagine a scenario where the Philippines will not somehow get involved” in a Taiwan conflict.[71] More recently, he stated that his country would inevitably be drawn “kicking and screaming” into any war over Taiwan.[72] The bottom line is that while the population is unenthusiastic about involvement in a Taiwan conflict, the country’s facilities would become critical assets for any US-led war effort, even if the conflict did not spread deeply into the South China Sea.[73] It is also highly unlikely that Manila would deny Washington use of its facilities for a Taiwan conflict. The United States would consider a Philippine offer of minimal support, such as intelligence, surveillance, and reconnaissance (ISR), inadequate. If Manila did less than Washington demanded, the US would probably withdraw security guarantees for Philippine interests in the South China Sea, which would be even more imperiled if China seized Taiwan. By giving Washington access to its northern facilities at a time of deepening US-China tension over Taiwan, Manila has shown that it has made the irreversible decision to protect its broader security interests, even if the cost is entrapment. It is worth bearing in mind that if China succeeds in seizing Taiwan, the Philippines expects that Beijing will also seek to control the disputed islands and features in the South China Sea currently occupied by Taiwan. For example, Taiwan currently controls the Pratas Islands, which China also claims. As map 2 shows, the islands occupy a geostrategically important location as the maritime midpoint connecting southern Taiwan, Hong Kong, and the northern Philippines. The islands also connect the sea lines of communication leading to the Taiwan Strait, the Luzon Strait, and the South China Sea.[74] Moreover, a Chinese seizure of the Taiwan-controlled Taiping Island would jeopardize Philippine and Vietnamese claims to this island, which serves as Taiwan’s gateway to the South China Sea. It would also provide China with yet another gateway into contested waters. The Philippines therefore has several strategic reasons to help prevent a Chinese attack against Taiwan.[75] Vietnam Formally, the wording of Hanoi’s one China policy is stridently and adamantly favorable to Beijing. Vietnam not only considers Taiwan “an inseparable part of Chinese territory” and sees Beijing as the “sole legitimate government representing all of China,” but also supports China’s “cause of national unification” and “firmly opposes separatist activity.”[76] At the same time, interlocutors in Hanoi expressed greater anxiety about a hypothetical Chinese attack against Taiwan than about Chinese aggression in the South China Sea. Other assessments support this conclusion.[77] There are several reasons for this. As explained in previous sections, Vietnam has the deepest strategic and historical threat perception of China among Southeast Asian nations. If China were to seize Taiwan, then it would likely break out into the Western Pacific and isolate Japan and the Philippines, increasing the possibility that it would eventually assert suzerainty over Indochina. Additionally, for Vietnam, as for the Philippines, the loss of the Taiwan-controlled Taiping Island to China would likely put paid to its claims over the island. Taiping Island is adjacent to Namyit Island, Sand Cay, and Petley Reef, which Vietnam controls, though China, Taiwan, and the Philippines also claim them.[78] None of this means that Vietnam would lend its weight to US-led actions in the defense of Taiwan. More likely, Hanoi would remain neutral, fearing that the Chinese threat would increase after a successful invasion of Taiwan. Interlocutors in Hanoi suggested that while conflict raged over Taiwan, Hanoi would remain vigilant and proactive regarding its claims over disputed islands and features in the South China Sea. The only conceivable scenario in which Vietnam might join the fray (in a limited and contained way) would be if China took over a Taiwan-controlled island such as Taiping and began to use it as a platform to seize Vietnam-controlled islands and features. Vietnam would likely remain primarily focused on the post-conflict period. If China seized Taiwan and emerged emboldened, Vietnam would consider abandoning its long-standing three-noes framework and seek closer alignment with the US, Japan, and perhaps India. It would also rearm quickly. The interlocutors were convinced that following a Taiwan conflict, Vietnam would move decisively to pursue its strategic interest—preventing Chinese domination and protecting its interests in the South China Sea—even if this meant ruthlessly dispensing with long-established approaches. Finally, Taiwan has deep economic relevance for Vietnam, since it produces, through the fabrication process, more than 90 percent of the world’s most advanced chips and one-third of high-end complex chips. Vietnam, for its part, has emerged as a major hub for chip processes such as assembly, testing, and packaging, and it exports more chips to the US than any other country besides Malaysia and Taiwan.[79] This is the main reason why Taiwan has emerged as the fourth-largest source of FDI in Vietnam and has become its fifth-largest trading partner.[80] If China seized Taiwan, semiconductor chip fabrication would likely shift quickly to countries such as South Korea, Japan, and the US, which would probably deepen Vietnam’s strategic relationship with them. Singapore A conflict over Taiwan would potentially put Singapore—the most technologically advanced military power in Southeast Asia with the greatest expeditionary capability—in an extremely awkward position. While it is unlikely Washington would insist that Singapore use its military assets in the Taiwan Strait, which would require extensive US support, the authors strongly sensed unspoken but significant anxiety that the United States and other allies might well insist on using Singaporean ports and other facilities such as Changi Naval Base and Paya Lebar Air Base. For Singapore, the nightmare scenario is for Washington to call upon it for assistance in seeking to exploit Beijing’s so-called Malacca dilemma—its reliance on the narrow Strait of Malacca to receive around 80 percent of its fossil fuel imports and manufacturing inputs. In this context, Singapore’s highly strategic position in anchoring the southern end of the Malacca Strait might well be a curse (see map 3). US weaponization of the Strait of Malacca through a blockade, or a counterblockade if China blockaded Taiwan, could take several forms: (1) erecting and enforcing a maritime exclusion zone; (2) conducting sea-denial operations, such as mining certain points in the strait, deploying surface and underwater vessels for interdiction attacks, or using anti-ship missiles or drones to strike shipping; or (3) using littoral land areas straddling the strait to ensure total control of the waterway.[81] In choosing any of these options, the United States would almost certainly call upon Singapore for assistance. This could include smaller requests (like using Singapore’s advanced ISR capabilities) or larger requests (like using Singaporean ports, facilities, or even territory, or direct assistance from the Singaporean military). Refusing some level of assistance would be difficult for Singapore, given the close, long-standing security relationship between the two countries, Singapore’s reliance on US technology and capital markets, and Singapore’s status as the most advanced economy in Southeast Asia. If Singapore were to refuse, then its special relationship with Washington would be permanently damaged, if not terminated. This would leave it in a brave and lonely new world after a Taiwan conflict, regardless of the outcome. On the other hand, even if Singapore were to offer minimal assistance, China would likely treat it as an allied combatant, both during and after the conflict, leaving it in a terrible position. In this context, Singapore has the starkest, most difficult, and most consequential decisions to make for its future strategic interests and trajectory in the event of a Taiwan conflict. It is no wonder that Singapore is the loudest voice in the region warning against a conflict over Taiwan, for it has the most to lose. Overall, Singapore is so embedded in the US security, financial, and technological ecosystem that it is almost structurally bound to offer some level of assistance to the United States. However, it would likely try to render a level and type of assistance that lowers the chances China would treat it as a legitimate military target. Malaysia Malaysia is in a better position than Singapore to remain genuinely neutral, even if there are always risks and costs. The Malaysian Armed Forces have been undergoing a modest modernization program focused on technological renovations and a partial upgrade, rather than on attaining significant power projection capabilities.[82] Malaysia prominently supports China’s claim over Taiwan and is adamant that it will not take sides or assist in Taiwan’s defense.[83] Its primary strategic and military concern is to defend its “core area” of Peninsula Malaysia, Sabah, and Sarawak, and its close territorial waters, and to ensure that Eastern and Western Malaysia “are not cut off in the middle.”[84] In the event the US sought to conduct operations around the Strait of Malacca, Malaysia would very likely not assist. The country allows US ships routine visits to its ports, such as Penang, for logistical purposes. It also has an air force base in Butterworth that Australia uses under the Five Power Defence Arrangements (FPDA), and it regularly takes part in US-led military exercises. However, Kuala Lumpur is not prepared to become a permanent enemy of China. Even though Malaysia expects that its interests in disputed areas of the South China Sea would likely be completely disregarded if China emerged as the uncontested regional power—which might happen if it seized Taiwan—Kuala Lumpur has consistently shown it is not prepared to significantly confront China when the cost of doing so is relatively low. In a Taiwan conflict, the cost of assisting the United States would be prohibitively high. Unlike Vietnam or the Philippines, Malaysia would not be prepared to jeopardize its future relationship with China to defend its South China Sea interests. Indeed, some Malaysian interlocutors expressed a higher degree of acceptance of a dominant China and a Sinocentric order than their counterparts in other Southeast Asian countries. For example, some believe that even if the result were joint development of undersea assets in contested areas that heavily favors China, this would be acceptable. In their view, if Malaysia were forced to become heavily dependent on China economically and technologically, this would be an undesirable but still acceptable result. The only outcome they seemed to view as strategically unacceptable was permanent damage to Malaysia’s relationship with China over Taiwan. If the US were to somehow use Malaysian territory in a Taiwan conflict without permission, Kuala Lumpur would likely protest and declare to China that it does not accept this development. It would consider America the invading power even if this led to permanent damage to its relationship with Washington. Note that the FPDA has little relevance to gaming out these contingencies. The agreement, which came into effect in 1971 as an arrangement among the United Kingdom, Australia, New Zealand, Singapore, and Malaysia, has lasted partly because it has limited contemporary geostrategic significance for great power competition and therefore attracts little controversy. Initially focusing on the air defense of the Malay Peninsula, it morphed into a maritime-focused arrangement. Even so, it is more concerned with issues such as piracy, people smuggling, humanitarian relief, and subregional terrorism.[85] The FPDA remains focused on the defense of Singapore and Malaysia, but the agreement’s true purpose is never clearly articulated. In practice, any arrangement not involving a great power will have limited relevance in a Taiwan conflict. A United States under immense pressure is unlikely to take much notice of the deliberations or decisions of a semiformal arrangement. Besides, the UK and New Zealand will have limited relevance in various Taiwan conflict scenarios; Australia might well be heavily involved in a US-led effort; Singapore might well be forcibly drawn in; and Malaysia will do all it can to sit it out completely. It is difficult to imagine a significant role for the FPDA in this context. Indonesia Not long ago, both the United States and China would have expected Indonesia to remain completely neutral in a Taiwan conflict, given its lack of meaningful security connections with either. This remains true: Indonesian involvement in military activity on behalf of either side or participation in efforts to restrict shipping in the Malacca Strait is inconceivable, nor is Indonesia capable of preventing a great power from restricting shipping. However, Jakarta’s strict policy of nonalignment seems to be evolving. On April 13, 2026, it signed an agreement with the US to establish the Major Defense Cooperation Partnership.[86] Although details are not yet fully available, the deal will reportedly allow US aircraft to access Indonesian airspace for “contingency operations, crisis response purposes, and mutually agreed exercise-related activities.” It will also allow US aircraft to “transit directly upon notification until subsequent notification of deactivation by the United States.”[87] This means that once the US notifies Indonesia, it will receive automatic clearance to fly through Indonesian airspace and will not need permission on a case-by-case basis. The arrangement appears to address the problem of American military aircraft flying from bases in Australia that would need to pass through Indonesian airspace to project power closer to Taiwan.[88] It is not yet fully clear how the arrangement will work and what its constraints might be. The definition of “contingency operations, crisis response purposes, and mutually agreed exercise-related activities” could include or exclude many situations, depending on Jakarta’s risk appetite. In the context of a Taiwan conflict, Indonesia appears to have many options. It could explicitly allow US and allied military aircraft to pass over its airspace under the terms of the agreement, refuse to offer explicit permission but in fact turn a blind eye, or explicitly refuse permission. The Trump administration has pushed for the current agreement, and President Prabowo seems eager to appease Trump, perhaps for tariff concessions and other benefits. Indonesia appears to assume that in wartime, there is little it could do to prevent US aircraft from flying through its airspace. The United States would seek permission but would not necessarily require it to conduct missions. The question is not whether US aircraft would be free to fly through Indonesian airspace, but whether Jakarta would give explicit permission. Perhaps it will come down to managing relations with the US and China, doing what must be done to maintain Indonesia’s ostensible neutrality and avoid punishment from either power during a conflict between the two. Would China consider Indonesia a combatant if Jakarta explicitly permitted US military aircraft to use its airspace? If Jakarta went through the performance of withdrawing permission, would this satisfy Beijing that it was neutral? Alternatively, would the United States treat Indonesia as a noncooperative partner after the conflict subsided and impose punitive consequences? There are no definitive answers, but these are some of the questions Indonesia will consider. A greater concern that arose in the authors’ discussion with Indonesian interlocutors is that Jakarta would be powerless to prevent a Taiwan conflict from spilling over into Southeast Asia and parts of the Indonesian Archipelago, and this might include the tactical occupation of some small Indonesian islands and features by warring powers. For Indonesia, the possible loss of national, social, and territorial cohesion and control remains the greatest concern—in short, the breakup of a functioning state and its territories. If war raged in Indonesian waters or in the country’s unguarded islands, the consequences for its future reconstruction and cohesion would be uncertain. This is Jakarta’s greatest fear, even if it has limited capacity to influence the shape of a postwar Indonesia or region. Underlying these calculations is the assessment, presented in chapters 1 and 2, that of all the economies assessed here, Indonesia is the least integrated in the East Asian manufacturing supply chain; that it has largely missed out on the East Asia export-oriented model to fast-track economic growth;[89] and that it has become dangerously dependent on Chinese finance, know-how, and markets in key sectors. The upshot is that in structural terms, Indonesia fears Chinese punishment and needs Chinese largesse more than American largesse. Analysts should consider this when anticipating what Indonesia might offer the US in the event of a conflict. Thailand While Thailand is still a formal US treaty ally, analysts are skeptical about how meaningful the alliance is.[90] As argued in chapters 1 and 2, Thailand has a relatively benign view of Chinese hegemony compared to other Southeast Asia states assessed. Moreover, it spends barely more than 1 percent of GDP on defense and has very limited force-projection capabilities.[91] In 2023, the United States refused to sell Thailand F-35 aircraft, citing technical and other limitations.[92] If the US alliance with the Philippines is evolving toward the next phase, the alliance with Thailand appears to be stagnating, if not decaying. The primary value of the countries assessed here—other than Singapore—to the US and its allies is access to their geography and capacity to provide limited and localized contributions to US logistical needs during a conflict. If a Taiwan conflict spreads to Southeast Asia, much of the focus would be on what Washington would ask of the other countries assessed in this report. There would be less focus on Thailand, which suits Bangkok, as it would seek to remain strictly neutral and position itself to adapt to whatever situation develops after the war. Unfortunately for Thailand, this might not be possible. For the moment, Thailand has maintained a steady schedule of joint exercises with the US and other allies, such as Cobra Gold, which is held annually. Bangkok has tended to rebuff Washington when it demands clarity on Thai attitudes to overflight rights and intelligence cooperation in a contingency. The problem for Bangkok is that Thailand’s geographical location could be more important in a Taiwan conflict than it might want. Analysts are already discussing a proposed land bridge between the Andaman Sea and the Gulf of Thailand as a possible fallback or supply space for US forces (see map 4). The proposed land bridge, however, could also serve as an access point for Chinese supply chains and troop movements via Laos.[93] Beijing could use existing north-south roads and railways from inland southern China to enable overland access to the planned deep-sea ports on the Andaman and Gulf of Thailand coasts. This would open a westward route for China to the Indian and Pacific Oceans that avoids the Strait of Malacca. Significantly, the China-led Asian Infrastructure Investment Bank has endorsed the Thailand land bridge idea and is prepared to offer funding.[94] The idea was raised in 2023 and has recently gained momentum as a result of Iranian and US blockades and counterblockades of ships in the Strait of Hormuz.[95] Bangkok’s realistic fear is that the US and China might demand more of it and make a neutral stance—genuine or not—impossible. Even if the land bridge is not yet constructed, Washington might request overflight rights and logistical support, as it needs a reliable logistics hub away from the Taiwan Strait theater that can support its operations but is not directly threatened by Chinese strikes. Thailand will become even more important if the land bridge is operational. The risk to Thailand is that agreeing to this will render Bangkok a combatant from Beijing’s perspective. As chapter 2 shows, Thailand is heavily dependent on China economically and is extremely reliant on Chinese firms such as Huawei for digital connectivity and cloud services, which could be disrupted or disconnected as punishment. During and after a conflict, China could inflict severe economic retaliation. On the other hand, if Thailand acquiesced to Chinese demands during a conflict, it would probably be permanently cut off from US-led institutions afterward. For example, severe prohibitions might prevent US and allied firms from operating and investing in Thailand. Development funds from entities such as the World Bank and International Monetary Fund could be at risk. Economic relations with Japan and South Korea might be limited at US insistence, making Thailand almost completely dependent on China for material opportunities. The country could then turn it into a trapped economy like Laos or Cambodia. Thailand’s strong instinct in the event of a conflict would be to impose as strict a neutrality as possible. For example, Bangkok might close its airspace to all military flights and block access to its territory for combatants. However, this might not satisfy Washington, which would likely view neutrality as tacit support for China, given the great distances from which the United States needs to operate. On the other hand, China might not be satisfied if it is denied a route to circumvent its Malacca dilemma. This would have punitive economic consequences for Thailand during and after the conflict. Nevertheless, Bangkok is still likely to calculate that its best bad option is to attempt strict neutrality and mitigate the ramifications of neutrality vis-à-vis the United States and China. Conclusion A deeper understanding of the sophistication and nuances of Southeast Asian approaches to strategic hedging offers a more accurate perspective on how these smaller states seek not just to manage the risks of US-China tensions over Taiwan, but also to maximize gains from both great powers. Moreover, an assessment of the relative influence of the US and China in Southeast Asia from a normative, institutional, and economic perspective gives a better idea of the framework within which Southeast Asian nations work when dealing with the two powers, as well as the constraints they face. By far the most difficult question to answer is how these nations think about a conflict over Taiwan, how they would respond, and what the US and China might demand of them. The issue is so terrifying and complex that considering it properly is almost taboo for many of the authors’ Southeast Asian interlocutors. It is terrifying because a conflict would destroy and invalidate key elements of the strategic hedging approaches these states have employed for several decades. It is complex because a war over Taiwan could morph and spread in different ways. Nevertheless, these assessments need to be made, given their urgency. Endnotes Some of the findings were originally reported in John Lee and Lavina Lee, Understanding, Analysing and Countering Chinese Non-Military Efforts to Increase Support for, and Decrease Resistance to, Beijing’s Strategic and Defence Objectives in Southeast Asia: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam (L21 Pty Ltd, January 2020), https://cdn.sanity.io/files/ooh1fq7e/production/6a980443bccdfc12457daaa15be3fad27355e0d6.pdf/Understanding-analysing-and-countering-Chinese-non-military-efforts-to-increase-support-for-and-decrease-resistance-to-Beijings-strategic-and-defence-objectives-in-Southeast-Asia.pdf. See John Lee, “The Free and Open Indo-Pacific and Implications for ASEAN,” Trends in Southeast Asia, no. 13 (2018). See “Davos 2026: Special Address by Mark Carney, Prime Minister of Canada,” World Economic Forum, January 20, 2026, https://www.weforum.org/stories/2026/01/davos-2026-special-address-by-mark-carney-prime-minister-of-canada/. See Joseph Deavenport, “Has the Balance Tipped? The Thai Military and Its Security Perceptions in an Era of Asia-Pacific Great Power Competition,” Graduate Review of Political Science and Public Administration 4, no. 1 (2025), https://so07.tci-thaijo.org/index.php/GRPSPAJ/article/view/6086/4911. The National Security Policy and Plan (2019–2022) (Government of Thailand, Office of the Prime Minister, Office of the National Security Council, 2019), https://www.nsc.go.th/wp-content/uploads/2020/05/The-National-Security-Policy-and-Plan2019-E28093-2022.pdf. Việt Nam — Củng cố Quốc phòng, Bảo vệ Tổ quốc [Vietnam: Strengthening national defense, protecting the fatherland] (Socialist Republic of Vietnam, Ministry of Defense, 1998), https://bqp.vn/wcm/connect/ae9e7ee6-0191-4541-9bdc-afd6ea70aa89/1998vie.pdf?MOD=AJPERESCACHEID=ROOTWORKSPACE-ae9e7ee6-0191-4541-9bdc-afd6ea70aa89-jEaM0Rn. Vietnam’s National Defense in the Early Years of the Twenty-First Century (Socialist Republic of Vietnam, Ministry of Defense, 2004), https://bqp.vn/wcm/connect/d9939b1f-354f-49fc-ab40-28f5db9aec13/2004eng.pdf?MOD=AJPERESCACHEID=ROOTWORKSPACE-d9939b1f-354f-49fc-ab40-28f5db9aec13-jEaNgF5. Vietnam National Defence (Socialist Republic of Vietnam, Ministry of National Defense, 2009), https://bqp.vn/wcm/connect/caadf77c-2fb4-48c1-8f20-8d3216ad2513/2009eng.pdf?MOD=AJPERESCACHEID=ROOTWORKSPACE-caadf77c-2fb4-48c1-8f20-8d3216ad2513-jEaOh28. Vietnam National Defence (2009), 22–24. “Overall Strategy for International Integration Through 2020, Vision to 2030,” Socialist Republic of Vietnam, 2016, https://vietnam.gov.vn/period-20112020/overall-strategy-for-international-integration-through-2020-vision-to-2030-part-i-10056863. “Global Infrastructure Outlook, Vietnam Investment Forecasts,” G20, accessed July 1, 2026, https://outlook.gihub.org/countries/Vietnam. “President Tran Dai Quang Concludes State Visit to China,” People’s Army Newspaper, May 16, 2017, https://en.qdnd.vn/foreign-affairs/bilateral-relations/president-tran-dai-quang-concludes-state-visit-to-china-480934. See also Huynh Trung Dung and Vu-Thanh Tu-Anh, Balancing Without Allying: Vietnam’s Middle-Power Strategy amidst US-China Rivalry (Harvard Kennedy School Belfer Center and Rajawali Foundation, April 2026), https://www.belfercenter.org/sites/default/files/2026-04/Vietnam_MiddlePowers-CountryReport_1.2_0.pdf. See Nguyen Cong Tung, “Walking a Tightrope Once More: Vietnam’s Strategic Alignment Toward the United States and Its China Dilemma,” Issues Studies 61, no. 3 (July 2025), https://www.researchgate.net/publication/393462148_Walking_a_Tightrope_Once_More_Vietnam's_Strategic_Alignment_Toward_the_United_States_and_Its_China_Dilemma. See also Mingjiang Li, “ASEAN’s Responses to AUKUS: Implications for Strategic Realignments in the Indo-Pacific,” China International Strategy Review 4, no. 1 (November 2022), https://www.researchgate.net/publication/365782507_ASEAN's_responses_to_AUKUS_implications_for_strategic_realignments_in_the_Indo-Pacific. For example, see Matt Pottinger and Mike Gallagher, “No Substitute for Victory: America’s Competition with China Must Be Won, not Managed,” Foreign Affairs, April 10, 2024, https://www.foreignaffairs.com/united-states/no-substitute-victory-pottinger-gallagher. See Cheng-Chwee Kuik, “Explaining Hedging: The Case of Malaysian Equidistance,” Contemporary Southeast Asia 46, no. 1 (April 2024), https://muse.jhu.edu/pub/70/article/925575/pdf. See Andrew Jia Kam Yi and Tham Siew Yean, Malaysia-China Relations: Progress, Partnership, Prospects (World Scientific Connect, 2025); Neo Chee Hua et al., Assessing the Roles of Chinese Enterprises in Malaysia’s Economic Development (Southeast Asia Research Centre for Humanities, 2025), https://ceccm.com.my/wp-content/uploads/2025/08/Watermark_ASSESSING-THE-ROLES-OF-CHINESE-ENTERPRISES-IN-MALAYSIAS-ECONOMIC-DEVELOPMENT_compressed-1.pdf. Bilahari Kausikan, “Why Small Countries Should Not Behave Like a Small Country,” Para Limes: Beyond Boundaries, Nanyang Technological University, March 26, 2018, https://blogs.ntu.edu.sg/paralimes/2018/03/26/bilahari-smallcountries/. Bilahari Kausikan, “Why Small Countries Should Not Behave Like a Small Country.” For example, see “Prime Minister’s Keynote Address at Shangri La Dialogue,” Indian Ministry of External Affairs, June 1, 2018, https://www.mea.gov.in/Speeches-Statements.htm?dtl/29943/Prime+Ministers+Keynote+Address+at+Shangri+La+Dialogue+June+01+2018; “PM Lee Hsien Loong at the IISS Shangri-La Dialogue 2019,” Prime Minister's Office Singapore, May 31, 2019, https://www.pmo.gov.sg/newsroom/pm-lee-hsien-loong-at-the-iiss-shangri-la-dialogue-2019/. “PM Lee Hsien Loong at the IISS Shangri-La Dialogue 2019.” See Deasy Pane, “Indonesia-China Trade Relations: Mutual Benefits but Policy Dilemmas,” Economics Working Paper No. 2026-2 (ISEAS – Yusof Ishak Institute, February 2026), https://iseas.edu.sg/wp-content/uploads/2026/01/ISEAS_EWP_2026-2_Pane.pdf; Yeta Purnama and Muhammad Zulfikar Rakhmat, “Indonesia’s Nickel Boom Was Built on an Illusion,” Australian Institute of International Affairs, May 15, 2026, https://www.internationalaffairs.org.au/australianoutlook/indonesias-nickel-boom-was-built-on-an-illusion/. See Jascha Ramba Santoso, “Indonesia Is Hooked on Huawei,” Australian Strategic Policy Institute, April 29, 2025, https://www.aspistrategist.org.au/indonesia-is-hooked-on-huawei/; “Chinese Firms Control Around 75 Percent of Indonesian Nickel Capacity, Report Finds,” Reuters, February 5, 2025, https://www.reuters.com/markets/commodities/chinese-firms-control-around-75-indonesian-nickel-capacity-report-finds-2025-02-05/. See Patrick Cronin, “Transcript: US-Indonesia Relations at 70: History, Policy, and the Future,” Hudson Institute, July 12, 2019, https://www.hudson.org/foreign-policy/transcript-u-s-indonesia-relations-at-70-history-policy-and-the-future. See Hidetaka Yoshimatsu, “Indonesia’s Response to the Belt and Road Initiative and the Indo-Pacific: A Pivotal State’s Hedging Strategy,” Asian Politics and Policy 14, no. 2 (April 2022), https://onlinelibrary.wiley.com/doi/abs/10.1111/aspp.12629. See Gufron Gozali and M. Habib Pashya, “Prabowo’s Shift Toward China Is Worrying for Indonesia,” Fair Observer, February 27, 2025, https://www.fairobserver.com/politics/prabowos-shift-toward-china-is-worrying-for-indonesia/. See Muhammad Zulfikar Rakhmat and Yeta Purnama, “Taking the Measure of Prabowo’s Tilt Toward China,” Asia Times, October 20, 2025, https://asiatimes.com/2025/10/taking-the-measure-of-prabowos-tilt-toward-china/. Sharon Seah et al., The State of Southeast Asia: 2025 Survey Report (ISEAS – Yusof Ishak Institute, 2025), https://www.iseas.edu.sg/wp-content/uploads/2025/03/The-State-of-SEA-2025-1.pdf. See Moch Faisal Karim, “Layered Incoherence in Middle Power Foreign Policy: Indonesia and the US-China Rivalry,” Global Policy 17 (February 2026), https://onlinelibrary.wiley.com/doi/epdf/10.1111/1758-5899.70093. On strategic fence-sitting, see Seng Tan, “Consigned to Hedge: Southeast Asia and America’s ‘Free and Open Indo-Pacific’ Strategy,” International Affairs 96, no. 1 (January 2020); on strategic buck-passing, see Thomas J. Christensen and Jack Snyder, “Chain Gangs and Passed Bucks: Predicting Alliance Patterns in Multipolarity,” International Organization 44, no. 2 (Spring 1990), https://users.metu.edu.tr/utuba/Christensen.pdf. See Cheng-Chwee Kuik, “How Do Weaker States Hedge? Unpacking ASEAN States’ Alignment Behavior Towards China,” Journal of Contemporary China 25, no. 100 (2016). See Darren J. Lim and Zack Cooper, “Reassessing Hedging: The Logic of Alignment in East Asia,” Security Studies 24, no. 4 (2015), https://www.researchgate.net/publication/284281134_Reassessing_Hedging_The_Logic_of_Alignment_in_East_Asia. For example, see Seah et al., The State of Southeast Asia: 2025; Lynn Kuok, “America Is Losing Southeast Asia: Why US Allies in the Region Are Turning Toward China,” Foreign Affairs, September 3, 2024, https://www.foreignaffairs.com/united-states/america-losing-southeast-asia; Susannah Patton et al., Lowy Institute Southeast Asia Influence Index (Lowy Institute 2025), https://influence.lowyinstitute.org/assets/downloads/LowyInstitute-SoutheastAsiaInfluenceIndex-KeyFindingsReport.pdf; Yuen Foong Khong and Joseph Chinyong Liow, “Southeast Asia Is Starting to Choose: Why the Region Is Leaning Toward China,” Foreign Affairs, June 24, 2025, https://www.foreignaffairs.com/china/southeast-asia-starting-choose-khong-liow. See Joshua Kurlantzick, “The US Is Pushing Southeast Asia Toward China. The Iran War Made It Worse,” Council on Foreign Relations, April 9, 2026, https://www.cfr.org/articles/the-u-s-is-pushing-southeast-asia-toward-china-the-iran-war-made-it-worse; Joanna Lin, “When US Leadership Loses Its Sheen,” Asialink, April 10, 2026, https://asialink.unimelb.edu.au/diplomacy/insights/when-us-leadership-loses-its-sheen; Ben Bland, “In Southeast Asia, Trump Reinforces Worst Fears About the US,” Chatham House, March 17, 2025, https://www.chathamhouse.org/2025/03/southeast-asia-trump-reinforces-worst-fears-about-us. ASEAN Investment Report 2024 (ASEAN Secretariat and UN Trade and Development Division on Investment and Enterprise, October 2024), https://asean.org/wp-content/uploads/2024/10/AIR2024-3.pdf. ASEAN Investment Report 2024. ASEAN Investment Report 2024. See John Lee, Understanding and Countering China’s Approach to Economic Decoupling from the United States (Hudson Institute, August 2022), https://s3.amazonaws.com/media.hudson.org/Understanding+Countering+China’s+Approach+Economic+Decoupling+United+States+-+John+Lee.pdf. See John Lee, “China’s Plan to Win the AI Race in Southeast Asia,” Hudson Institute, April 2026, https://s3.us-east-1.amazonaws.com/media.hudson.org/042026_Lee_Geopolitics_Data_Localization_SE_Asia_Memo_Web.pdf. See Council on Foreign Relations (cfr_org), “‘IP theft is a deliberate strategy for China to close the gap with the United States in the race to build the world's most advanced AI,’ says CFR expert Jessica Brandt,” Instagram, March 7, 2026, https://www.instagram.com/reel/DVjCnq8iuZr/; Sebastian Klovig Skelton, “US Artificial Intelligence Developers Accuse Chinese Firms of Stealing Their Data,” ComputerWeekly, February 26, 2026, https://www.computerweekly.com/news/366639367/US-artificial-intelligence-developers-accuse-Chinese-firms-of-stealing-their-data. Open-source AI exists along a spectrum, from fully open to open data to open code to open model. See Noam Unger and Madeleine McLean, “An Open Door: AI Innovation in the Global South amid Geostrategic Competition,” Center for Strategic and International Studies, August 2025, https://csis-website-prod.s3.amazonaws.com/s3fs-public/2025-08/250813_Unger_McLean_Open_Door.pdf?VersionId=gO3r2POQJ.NtkKdU4seLyki6OtNoLxEY. Quoted in Ruan Zongze, “Forging a Community of Shared Destiny for Mankind: The ‘Global Dream’ of China,” Czech China Entrepreneurs Forum Blog, March 14, 2016, https://ccefblog.wordpress.com/2016/03/14/forging-a-community-of-shared-destiny-for-mankind-the-global-dream-of-china/. See Lee, Understanding and Countering China’s Global South Strategy in the Indo-Pacific (Hudson Institute, September 2024), https://s3.amazonaws.com/media.hudson.org/Understanding+and+Countering+ChinaE28099s+Global+South+Strategy+in+the+Indo-Pacific+-+John+Lee.pdf. Matthew Sargent, Mapping Cross-Border Business Networks in the Asia-Pacific Region (RAND Corporation, 2021), https://www.rand.org/content/dam/rand/pubs/research_reports/RRA700/RRA792-1/RAND_RRA792-1.pdf. See Lee, Understanding and Countering China’s Global South Strategy. “Full Text of President Xi’s Speech at Opening of Belt and Road Forum,” Xinhua, May 14, 2017, http://www.xinhuanet.com/english/2017-05/14/c_136282982.htm. See Brantly Womack, China and Vietnam: The Politics of Asymmetry (Cambridge University Press, 2006). Sharon Seah et al., The State of Southeast Asia: 2024 Survey Report (ISEAS – Yusof Ishak Institute, 2024), https://www.iseas.edu.sg/wp-content/uploads/2024/03/The-State-of-SEA-2024.pdf. Seah et al., The State of Southeast Asia: 2024. See Lee and Lee, Understanding, Analysing and Countering Chinese Non-Military Efforts to Increase Support for, and Decrease Resistance to, Beijing’s Strategic and Defence Objectives in Southeast Asia. See Zongze, “Forging a Community of Shared Destiny for Mankind.” Zongze, “Forging a Community of Shared Destiny for Mankind.” Zongze, “Forging a Community of Shared Destiny for Mankind.” See Ngeow Chow Bing, “The ‘One China’ Policy of Southeast Asian Countries,” ThinkChina, August 12, 2022, https://www.thinkchina.sg/politics/one-china-policy-southeast-asian-countries. Seah et al., The State of Southeast Asia: 2024. “ASEAN Foreign Ministers’ Statement on the Cross Strait Development,” ASEAN, August 3, 2022, https://asean.org/wp-content/uploads/2022/08/final-ASEAN-FMs-Statement-on-Cross-strait-development.pdf. See Michael T. Klare, “China Reacts Aggressively to Pelosi’s Taiwan Visit,” Arms Control Association, September 2022, https://www.armscontrol.org/act/2022-09/news/china-reacts-aggressively-pelosis-taiwan-visit. “ASEAN Foreign Ministers’ Statement on the Cross Strait Development.” “Trade in Goods with Taiwan,” United States Census Bureau, accessed July 1, 2026, https://www.census.gov/foreign-trade/balance/c5830.html. See Veeramalla Anjaiah, “Taiwan Emerges as a Top Trading Partner with 1.12 Trillion Trade,” Eurasia Review, April 18, 2026, https://www.eurasiareview.com/28042026-taiwan-emerges-as-a-top-trading-power-with-1-12-trillion-trade-oped/. See Lee, Understanding and Countering China’s Global South Strategy. See “Taiwan Expresses Regret after CPTPP Does Not Address Its Ascension,” Overseas Community Affairs Council of Taiwan, November 24, 2025, https://www.ocac.gov.tw/OCAC/Eng/Pages/Detail.aspx?nodeid=329pid=81550682. Note that only Japan was enthusiastic about seriously considering Taiwan’s membership application. See Charlie Vest et al., “The Global Economic Disruptions from a Taiwan Conflict,” Rhodium Group, December 14, 2022, https://rhg.com/research/taiwan-economic-disruptions/; Jennifer Welsh et al., “Xi, Biden and the 10 Trillion Cost of War Over Taiwan,” Bloomberg, January 9, 2024, https://www.bloomberg.com/news/features/2024-01-09/if-china-invades-taiwan-it-would-cost-world-economy-10-trillion. See Henrietta Levin and Hugh Grant-Chapman, “Understanding Global South Perspectives on Taiwan,” Center for Strategic and International Studies, January 16, 2026, https://www.csis.org/analysis/understanding-global-south-perspectives-taiwan. For example, see “Keputusan Menteri Pertahanan No. KEP/632/M/VI,2022 tentang Strategi Pertahanan Negara” [Defense ministerial regulation on national defense strategy], Ministry of Defense of the Republic of Indonesia, June 3, 2022. Note that there were an estimated 970,000 Southeast Asians in Taiwan as of November 2025 according to Taiwan’s Ministry of Labor. The largest communities are from Indonesia (325,000), Vietnam (285,000), the Philippines (176,000), and Thailand (84,000) (figures are approximate). See Taiwan immigration statistics on “2025.11 Foreign Residents by Nationality,” Ministry of the Interior National Immigration Agency Republic of China (Taiwan), December 26, 2025, https://www.immigration.gov.tw/5475/5478/141478/141380/404267/cp_news. Evan A. Laksmana, Contingent Capabilities: Southeast Asia’s Emerging Anti-access Environment (International Institute for Strategic Studies, February 2026), https://www.iiss.org/globalassets/media-library---content--migration/files/research-papers/2026/contingent-capabilities-southeast-asias-emerging-anti-access-environment/contingent-capabilities-southeast_asias-emerging-anti-access-environment.pdf. See “Track Record and Trajectory: U.S.-Philippine Defense Ties Since 2021: Remarks by Assistant Secretary of Defense Ely Ratner at the 2024 CSIS South China Sea Conference,” US Department of War, July 11, 2024, https://www.war.gov/News/Speeches/Speech/Article/3836245/track-record-and-trajectory-us-philippine-defense-ties-since-2021-remarks-by-as/. Karen Lema, “Philippines Reveals Locations of Four New Strategic Sites for US Military Pact,” Reuters, April 3, 2023, https://www.reuters.com/world/asia-pacific/philippines-reveals-locations-4-new-strategic-sites-us-military-pact-2023-04-03/. See “Philippines Defends US Missile System Deployment, Seeks to Acquire Its Own,” Reuters, December 24, 2024, https://www.reuters.com/world/philippines-defends-us-missile-system-deployment-seeks-acquire-its-own-2024-12-24/. For example, see John Bechtel and Jason Gutierrez, “Marcos Says Philippine Military Bases Won’t Be Used to Attack China,” Radio Free Asia, May 5, 2023, https://www.rfa.org/english/news/pacific/marcos-05052023130059.html. Quoted in Cliff Venzon, “Marcos Says ‘Hard to Imagine’ Philippines Can Avoid Taiwan Conflict,” Nikkei Asia, February 12, 2023, https://asia.nikkei.com/editor-s-picks/interview/marcos-says-hard-to-imagine-philippines-can-avoid-taiwan-conflict. Quoted in Jim Gomez, “Marcos Says the Philippines Will be Pulled into any War over Taiwan, Despite China’s Protest,” Associated Press, August 11, 2025, https://apnews.com/article/philippines-ferdinand-marcos-taiwan-south-china-sea-66d58ca064aea64c937fd5f0d311348b. See Aaron-Matthew Lariosa, “Philippine Military Opens New Luzon Strait Base near Taiwan,” USNI News, August 29, 2025, https://news.usni.org/2025/08/29/philippine-military-opens-new-luzon-strait-base-near-taiwan. See Pak Nung Wong, “Toward a Futurist Approach to Hedging Strategy in Southeast Asia: Anticipations and Strategic Decision-Making in a Taiwan Contingency,” Frontiers in Political Science 7, June 13, 2025, https://www.frontiersin.org/journals/political-science/articles/10.3389/fpos.2025.1598976/full. See Susannah Patton, “Commentary: What the Philippines Has at Stake in US-China Tensions over Taiwan,” Channel News Asia, August 18, 2022, https://www.channelnewsasia.com/commentary/philippines-us-china-taiwan-military-exercise-south-china-sea-trade-2885916. See “Viet Nam, China Issue Joint Statement on Deepening Comprehensive Strategic Cooperative Partnership in New Era,” Socialist Republic of Vietnam Government News, April 17, 2026, https://en.baochinhphu.vn/viet-nam-china-issue-joint-statement-on-deepening-comprehensive-strategic-cooperative-partnership-in-new-era-111260417153206502.htm. For example, see Laksmana, Contingent Capabilities. See Hanh Nguyen, “Vietnam in a Taiwan Contingency: Facing Multiple Crises,” Asia Policy 19, no. 2 (2024), https://www.jstor.org/stable/27308012. See Huynh Tam Sang and Vo Thi Thuy An, “Making Middle Power Alignment Work: Reinforcing Taiwan-Vietnam Collaboration in the Semiconductor Industry,” International Journal of China Studies 14, no. 2 (December 2023), https://ics.um.edu.my/international-journal-of-china-studies-vol-14-no-2-december-2023. See “Investment from Taiwan (China) Is Fuelling Viet Nam’s High-Tech Industry,” Viet Nam News, September 2, 2024, https://vietnamnews.vn/economy/1662166/investment-from-taiwan-china-is-fuelling-viet-nam-s-high-tech-industry.html. See Adam Leong Kok Wey, “Fron Gallipoli to the Strait of Malacca: Why Maritime Choke Points Will Decide the Fate of Nations,” The Interpreter, Lowy Institute, July 4, 2025, https://www.lowyinstitute.org/the-interpreter/gallipoli-strait-malacca-why-maritime-choke-points-still-decide-fate-nations. “Military Modernisation to Drive Malaysian Defence Budget at 8.4 Percent CAGR over 2024–28,” Asia-Pacific Defence Reporter, September 28, 2023, https://asiapacificdefencereporter.com/military-modernisation-to-drive-malaysia-defence-budget-at-8-4-cagr-over-2024-28/. See Cheng-Chwee Kuik, “Active Neutrality: Malaysia in the Middle of US-China Competition,” Asia-Pacific Leadership Network, October 11, 2023, https://www.apln.network/news/member_activities/active-neutrality-malaysia-in-the-middle-of-u-s-china-competition; Norman Goh and Hakimie Amrie, “Malaysia Reaffirms One China Policy, Rejects Taiwan Independence,” Nikkei Asia, June 20, 2024, https://asia.nikkei.com/politics/international-relations/malaysia-reaffirms-one-china-policy-rejects-taiwan-independence. See Laksmana, Contingent Capabilities. See David M. Andrews, “The Five Power Defence Arrangements: How To Sail Past Fifty,” Fulcrum, June 13, 2023, https://fulcrum.sg/the-five-power-defence-arrangements-how-to-sail-past-fifty/. “Joint Statement on Establishment of the US-Indonesia Major Defense Cooperation Partnership,” US Department of War, April 13, 2026, https://media.defense.gov/2026/Apr/13/2003911810/-1/-1/1/READOUT-OF-SECRETARY-OF-WAR-PETE-HEGSETH-MEETING-WITH-INDONESIA-MINISTER-OF-DEFENSE-SJAFRIE-SJAMSOEDDIN.PDF. See Abhinandan Mishra, “US Seeks Blanket Overflight Access via Indonesia,” Sunday Guardian, April 12, 2026, https://sundayguardianlive.com/world/us-seeks-blanket-overflight-access-via-indonesia-183288/. See Aristyo Darmawan, “Indonesia Shouldn’t Give Blanket Airspace Access to the US,” The Strategist, Australian Strategic Policy Institute, April 15, 2026, https://www.aspistrategist.org.au/indonesia-shouldnt-give-blanket-airspace-access-to-the-us/. See monographs by John Lee in the ISEAS Trends in Southeast Asia series examining China’s economic relations with Indonesia, Malaysia, Thailand, Vietnam, and Singapore, available at https://bookshop.iseas.edu.sg/publication/1948contents. For example, see Zachary Abuza, “America Should Be Realistic About Its Alliance with Thailand,” War on the Rocks, January 2, 2020, https://warontherocks.com/america-should-be-realistic-about-its-alliance-with-thailand/. See Lyle Goldstein, “Target Taiwan: Limits of Allied Support,” Defense Priorities, October 16, 2025, https://www.defensepriorities.org/explainers/target-taiwan-limits-of-allied-support/. See “US Rejects Purchase Bid, Says F-35 Fighter Jet Too Sophisticated for Thailand,” The Nation, May 23, 2023, https://www.nationthailand.com/thailand/politics/40027920. See Michael Hollister, “Thailand: The Frontline Nobody’s Watching,” Geopolitical Monitor, January 14, 2026, https://www.geopoliticalmonitor.com/thailand-the-frontline-nobodys-watching/. See Wichit Chantanusornsiri, “AIIB Keen on Land Bridge Investment,” Bangkok Post, May 29, 2025, https://www.bangkokpost.com/business/general/3036945/aiib-keen-on-land-bridge-investment. See Panu Wongcha-um and Panarat Thepgumpanat, “Thailand Revives 31b Land Bridge Plan as Global Shipping Chokepoints Tighten,” Reuters, April 27, 2026, https://www.bairdmaritime.com/shipping/thailand-revives-31b-land-bridge-plan-as-global-shipping-chokepoints-tighten. Enjoyed this analysis? Subscribe to Hudson’s newsletters to stay up to date with our latest content. Email See more subscription options National Security and Defense Defense Strategy
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