As the United States and China ratchet up competition in Asia, Southeast Asian countries find themselves walking a delicate tightrope. ASEAN governments “now face a double balancing act: managing growing economic integration with China while contending with mounting pressure… to reduce reliance on Chinese supply chains.”
The U.S. has called on regional partners to boost defense budgets and assume a larger burden in deterring China, even as Beijing presses ASEAN to deepen trade and investment ties (through BRI projects, upgraded ACFTA and RCEP pacts, and infrastructure aid). Historically nonaligned, each member state is responding differently. For example, tiny Brunei explicitly “hedges between China and the United States”: it is deepening economic ties with Beijing via the Belt and Road Initiative (to diversify from dwindling oil revenues) while sustaining robust security cooperation with Washington, such as hosting joint naval and air exercises. As one analyst notes, Brunei’s strategy aims “to ensure both economic growth and security,” balancing Chinese investment with long-standing U.S. defense links.
Cambodia’s approach is also pragmatic. Phnom Penh relies heavily on Chinese funding for ports, roads, and its new Ream naval base, epitomizing China as “a major investor and key development ally.” Chinese BRI megaprojects have significantly boosted Cambodia’s infrastructure and connectivity. Yet, the government under Hun Manet has simultaneously sought to reassure the U.S. and other neighbors. It has reopened Ream to foreign ships and invited U.S. naval visits, a gesture intended “to patch up relations with Washington” after years of turn to Beijing. Cambodia’s leaders publicly pledge to use Ream for “all friendly countries,” signaling that they will hedge Beijing’s influence with overtures to allies and ASEAN partners. Still, by hosting China’s largest joint military exercise in 2023 and accepting the bulk of its aid, Cambodia remains the Beijing’s closest ASEAN ally. In sum, Cambodia leverages Chinese investment to modernize its forces (seeing no other option under resource constraints) while using ASEAN and limited U.S. cooperation to preserve diplomatic space.
Neighbouring Laos has trended sharply toward China. Vientiane’s one-party government has enjoyed an economic lifeline from Beijing, including hydropower plants, rail links, and foreign direct investment, as well as increasing military ties. As one recent analysis observes, “In recent years, Laos’s relations with China have significantly strengthened by way of military engagements, trade, and infrastructure investment.” China funded the China, Laos railway and a pipeline and provided aid and arms, leaving the U.S. mostly on the sidelines. At the 2024 ASEAN chair’s call, Lao leaders noted that great power rivalry must not turn ASEAN into a proxy for their interests. Still, in practice, Vientiane’s “hedging” strategy favors Beijing’s orbit due to its geographical location and dependency.
Malaysia likewise pursues a nonaligned stance with a strong emphasis on trade openness. Prime Minister Anwar Ibrahim has spoken of an “active non-alignment” policy, stating that Malaysia will engage with all countries without letting one side set it against the other. His government emphasizes that ASEAN’s prosperity relies on free trade rather than military blocs. China’s leaders eagerly promote this message; during an ASEAN summit visit in May 2025, Premier Li Qiang urged “expanded trade and investment ties” and a joint defense of “open regionalism,” while Malaysia counters U.S. pressure by highlighting Asian integration. Reflecting this, Malaysia’s ministers declared they “do not need to choose sides” between the superpowers, and will “work with both” to secure the best technology and markets. In practice, Malaysia continues robust commerce with China (both countries signed deals on defense and tech in 2024) while allowing limited U.S. arms sales and retaining its ANZUS-like partners if needed. Its priority remains economic resilience (protecting trade-dependent industries) over high defense spending, a choice underscored by analysts noting Malaysians’ comfort living under the existing order of free trade and sovereignty.
Myanmar’s situation is starker. Since the 2021 coup, the isolated military regime has had virtually no reliable partnerships outside China (and, to some extent, Russia). Beijing has stepped in as Naypyidaw’s lifeline, investing in power plants and transportation, purchasing its gas, and supplying weapons. U.S. and Western sanctions have shut off Myanmar’s democratic avenues, leaving it little choice but to court Beijing. While the junta once professed neutrality, its compulsive drift is toward Chinese patronage for regime survival. Unlike other ASEAN members, Myanmar has no significant security links with the U.S. The Mutual Defense Treaty is moot, so it simply deepens ties with China to prop up its crumbling state (even as ASEAN sidelines the junta altogether).
In contrast, the Philippines has markedly swung back toward the United States. Under President Ferdinand “Bongbong” Marcos Jr., Manila has revived its alliance with Washington and is confronting Beijing over the South China Sea. As one observer notes, Marcos is “the first Southeast Asian leader to ‘choose’ between the United States and China,” and he chose the U.S. American officials routinely reassure that U.S. defense commitments to the Philippines are “ironclad” and have stepped up joint exercises and arms transfers. A January 2025 report highlights how “security engagements have soared under President Marcos Jr., who has moved closer to Washington and allowed the expansion of military bases that American forces can access,” including new facilities facing Taiwan. Manila is also accelerating spending on new jets and naval vessels with U.S. help. Even so, the Philippines must still import massive amounts of Chinese goods (in electronics and raw materials), so it courts Chinese investment even while publicly resisting Beijing’s maritime claims. In sum, Manila’s strategy is to be the United States' “frontrunner” in the region while avoiding the appearance of being a U.S. proxy. It hopes that robust economic ties to China will shield it from tariff wars, even as it solidifies its defense alignment with Washington.
Singapore, with its globalized economy and legacy of hosting U.S. forces, also walks a fine line. The city-state has strong security relations with the U.S. (hosting U.S. naval logistics and mutual training) and joined U.S.-led dialogues, but it never offered itself as a base against China. Its leaders stress engagement over confrontation. As Singapore’s defense minister put it, this tiny, wealthy state has “extensive contacts with Washington and Beijing” and is “invested in trying to bring the two together and avoid conflict in the Indo-Pacific.” At last year’s Shangri-La Dialogue, Singapore’s Chan Chun Sing urged all governments to “build bridges” with China, to “better understand China’s fears, concerns and aspirations, just as it is important for China to understand how the rest of the world perceives China.” In practice Singapore deepens trade ties with China (Beijing is its largest trading partner) while quietly meeting U.S. requests for access and interoperability. Its view is that “building bridges” and dialogue is needed, rather than picking sides, even as it continues to bolster its defenses at U.S. standards.
Thailand has a similarly flexible posture. Once a pillar of the U.S.-led SEATO and host to U.S. air bases, Thailand has in recent years described itself as a neutral state keen to avoid any bloc confrontation. Bangkok eagerly welcomed recent U.S. overtures (President Biden restored Army-to-Army exercises in 2022) but continues robust ties with China as well. As a Carnegie analysis notes, despite strengthening the alliance with Washington, “Thailand feels little obligation to deepen ties with the United States at the expense of ties with China.” Instead, the junta-run government pursues a “bamboo policy” of bending whichever way the wind blows. It abstained from harshly condemning Russia in Ukraine and insisted on ASEAN centrality. Economically, Thailand participates in both U.S. initiatives (like the Indo-Pacific Economic Framework) and Chinese projects (such as railway and energy deals). Most officials discuss a “diplomatic balancing act.” In short, Bangkok will accept U.S. assistance in modernizing its military but will not forsake Chinese loans and markets, seeking to maximize security ties on both sides.
Finally, Vietnam has emerged as a master of hedging. Hanoi is an old Cold War-era ally of Beijing, yet in practice, it now plays the U.S. and China to its advantage. It has become a magnet for manufacturers fleeing tariffs, nearly tripling exports to the U.S. since 2017 while still importing half its factory inputs from China. Diplomatically, Vietnam’s leaders are careful: one analyst notes that Hanoi positions itself as “an indispensable partner” for Washington to counterbalance China, but never so close as to give Beijing the impression of being ganged up on. Vietnam has expanded cooperation with the U.S. (upgrading to a strategic partnership in 2023 and quietly expanding patrols). It allows sales of U.S. planes and radar, yet it also maintains a communist party monopoly and recognizes China’s importance. By its calculus, Vietnam “maximizes [es] economic and security gains while avoiding entanglement in America’s turbulent politics and its intensifying competition with China.”
Across ASEAN, therefore, one sees a mosaic of strategies. Almost none of the ten members wants to choose outright sides. Instead, they hedge, opening markets and infrastructure to China’s expansion while accepting U.S. arms and exercises as a balance. Malaysia and Singapore heavily rely on trade talks and regionalism. Indonesia and Thailand insist on remaining non-aligned, championing ASEAN’s neutrality. The Philippines and Vietnam exploit U.S.-China friction to extract economic benefits, even as they reinforce U.S. defense ties. Cambodia, Laos and Myanmar depend almost entirely on Chinese money and patronage, though even they now flirt with minimal U.S. engagement to keep options open. In all cases, the historical ASEAN mindset persists: stability is believed to come not from military blocs but from multilateral trade and diplomacy. The result is an uneasy equilibrium, each country plays its own game of balancing, trying to secure prosperity from China’s rise while avoiding confrontation, even as Washington intensifies its calls for higher defense budgets and China tightens its economic web around Southeast Asia.
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