China’s Southeast Asian Problem

Xi Jinping’s great power ambitions are making Southeast Asia more important to China’s future. But they are simultaneously constraining his options for negotiation and alliance.

Cargo ships dock in Singapore after passing through the Strait of Malacca in 2020. Source.

Southeast Asia has a growing population of nearly 700 million people and a combined GDP in terms of purchasing power parity (PPP) of over $10 trillion, about twice as much as Russia, Germany, or Japan. The region’s combined population is about half the size of neighboring China’s, which stands at an official population of over 1.4 billion and a GDP (PPP) of over $30 trillion. Southeast Asia is critical to China’s future. In 2016, over 64% of China’s total maritime trade passed through the narrow Strait of Malacca, located between Indonesia, Malaysia, and Singapore.¹ The same year, an estimated 80% of Chinese oil imports—though just 11% of natural gas imports—transited the strait.² As China becomes both wealthier and older, Southeast Asia is also increasingly viewed as a source of critically cheap labor for Chinese manufacturers, as well as an accessible source of minerals and other natural resources due to its geographical proximity to China. Chinese paramount leader Xi Jinping has pursued a strategy of great power competition with the United States, but has not formulated a rationale for this strategy with appeal outside of China. This has left the countries of Southeast Asia filling a key economic role for China, without having a viable political role.