A narrow lead with wide reach
China has taken a slim but consequential lead over the United States across Southeast Asia, according to a new regional influence index that weighs economic, diplomatic, defense, cultural, and regional engagement ties. The study places China atop the standings with a score of 65 out of 100, just ahead of the United States on 64, reflecting a contest that is tight overall yet decisive in several countries. China ranks as the most influential external partner in six of the region’s 11 nations, including Cambodia, Indonesia, Malaysia, Myanmar, Thailand, and Vietnam. The United States holds the advantage in the Philippines and Singapore, while the remaining countries show mixed patterns that highlight how Southeast Asian governments hedge and diversify their relationships.
The narrow margin between the top two powers masks a clear reality on the ground. China’s reach stems first from trade and investment and is reinforced by a dense web of diplomatic activity. The United States retains strong defense ties and deep relationships in parts of maritime Southeast Asia, but it struggles to match China’s breadth of economic engagement in mainland Southeast Asia. Regional leaders are not choosing one partner outright. They are spreading risk, deepening ties with neighbors and a range of outside powers, and seeking growth while trying to keep big power competition from disrupting day-to-day priorities.
What the Lowy Index measures
The Southeast Asia Influence Index, produced by the Lowy Institute, compares how ten external partners engage with the 11 countries of Southeast Asia across five dimensions: economic relationships, defense networks, diplomatic influence, cultural influence, and regional engagement. It aggregates dozens of indicators, from trade and investment flows to leader visits, embassies, education, and security cooperation. The intent is not to crown a hegemon. Instead, it maps the practical relationships that shape decision making in the region and highlights where countries may be overexposed to a single partner. A detailed overview is available from the institute’s project page at Lowy Institute.
Why neighbors matter
One of the index’s central findings is that Southeast Asian countries collectively matter more to one another than any single outside power. Dense webs of trade, cross-border migration, and cultural exchange bind neighbors in ways that outside partners cannot replicate. This does not reduce China’s centrality, especially in commerce, but it does mean the region is not an uncontested sphere dominated by one state. That helps explain why most governments maintain diversified ties, even when they are highly exposed to China in specific sectors such as tourism, investment, or commodity trade.
Trade and investment are the engine
Commerce is where China’s advantage is hardest to ignore. China takes roughly 20 percent of the region’s exports and accounts for around 26 percent of its imports. The United States takes about 16 percent of exports. Beyond trade flows, Chinese private investment has become a powerful driver. Over the past decade (2015 to 2024), China accounted for about 21 percent of new project investment in Southeast Asia, up from 13 percent in the prior period when Japan played the largest role. Chinese companies are now deeply embedded in regional supply chains, from electronics to electric vehicles and renewables, and they are expanding into services and consumer sectors as incomes rise in ASEAN economies.
Tourism and education add to this weight. Chinese visitors are again a major source of tourism revenue for Thailand, Cambodia, and Vietnam, while Chinese universities and companies partner across the region on training and research. The economic pull is strongest in mainland Southeast Asia, where infrastructure links and proximity make trade and investment even stickier. Even so, many Southeast Asian governments are taking steps to diversify supply chains with Japan, South Korea, India, Australia, and Europe to reduce single-market risks and to gain technology and standards benefits.
BRI promises and delivery gaps
China’s role as the leading infrastructure financier in Southeast Asia has been shaped by the Belt and Road Initiative. The track record is mixed. A Lowy data snapshot of large projects across the region finds more than 50 billion dollars in promised financing that has not yet materialized, with many projects cancelled, downsized, or stalled. Only about one third of the largest projects have reached completion. The reasons are familiar: outsized ambitions, political instability in partner countries, weak consultation with local communities, and a global shift away from coal and into cleaner energy that has stranded some planned power plants.
Beijing is adjusting. Chinese financiers and companies are shifting toward smaller and more bankable projects, improving risk management and due diligence, and placing greater emphasis on environmental and social standards. Even with slower new lending, China is set to remain the region’s largest provider of infrastructure development because of the scale of existing commitments and its ability to mobilize state-backed and private finance together. For Southeast Asian governments, the key is to secure projects that arrive on time, within budget, and with local support, while balancing Chinese money with offers from Japan, multilateral banks, and private investors.
Diplomacy in high gear
China’s diplomatic machine is in constant motion across Southeast Asia. Chinese leaders and foreign ministers are frequent visitors, and Beijing maintains a dense network of embassies and consulates. Strategic partnerships now cover every Southeast Asian state except one, part of a deliberate effort to keep high-level political engagement steady regardless of electoral cycles in partner countries. The steady tempo of official visits and working-level dialogues helps translate economic ties into policy influence.
Tariffs and aid shifts reshape perceptions
Washington’s recent trade and aid policies have complicated its position. Tariffs introduced this year hit export-reliant economies across the region, with some countries still facing steep rates even after revisions. Cuts to development assistance and tighter student visa policies have also dented the appeal of the United States for some regional stakeholders who valued long standing education and aid links. These steps, taken together, make it harder for the United States to compete on economic engagement at the same scale as China.
Susannah Patton, a deputy research director at the Lowy Institute and one of the report’s authors, said tariff policy carried a cost for US standing in the region. She argued that the United States would struggle to sustain influence if partners felt penalized by trade barriers instead of welcomed into supply chains and markets.
“Imposing significant tariffs is not positive for US influence in the region.”
A senior US official has signaled that Washington aims to repair some of this damage through targeted trade talks. US Trade Representative Jamieson Greer told regional counterparts in Kuala Lumpur that the United States expects to finalize trade agreements with more Southeast Asian countries in the coming months, and that negotiations over levies are moving forward, with some deals already announced or nearing completion.
“The United States expects to finalize trade deals with more Southeast Asian countries in the coming months.”
Defense and security, a split picture
Security ties reveal a different balance. The United States is still the preferred defense partner for several Southeast Asian states. It maintains a formal alliance with the Philippines and Thailand, deep access agreements with Singapore, and a busy calendar of exercises and port calls across the region. Defense education, maritime domain awareness programs, and security assistance continue to anchor relationships even when political ties are strained.
China’s security footprint is narrower. It is a growing supplier of arms, ranking behind the United States and Russia in the region, and it has deepened cooperation with some mainland Southeast Asian countries. Its profile is far less extensive in maritime Southeast Asia, where mistrust is fueled by tensions in the South China Sea. Chinese efforts to expand joint exercises and military dialogues are underway, but the network is still limited compared to the United States. Many Southeast Asian governments hedge, improving ties with both sides while trying to avoid steps that could trigger sharp reactions from Beijing or Washington.
Patton stressed that China’s influence does not extend across every dimension of power in the region, even as Beijing leads the overall index.
“We do not describe China as hegemonic in its influence. It is not the leading partner for Southeast Asia across all dimensions of influence.”
Cultural influence and media
Soft power is another area where strengths differ. China benefits from large flows of tourists and students who build familiarity and long-term networks. Chinese language, cuisine, and business culture are well established across the region. The United States still has a strong edge in entertainment, media, higher education, and people-to-people exchange programs that shape perceptions of the United States over a lifetime. Meanwhile, South Korean pop culture and Japanese media remain widely popular, adding to a crowded cultural field in which no single country holds sway across every audience.
Middle powers fill key gaps
Japan stands out among middle powers, even as its relative economic weight has slipped. Tokyo combines sustained development finance with quality infrastructure delivery, a modest but growing security role, and a steady diplomatic presence. Australia’s defense and diplomatic engagement has expanded, with new outreach to Malaysia and Indonesia and deeper work on maritime security and law enforcement. That said, Australian business and cultural links lag behind the policy focus. South Korea’s investment has grown across manufacturing and technology, while cultural exports project influence well beyond economics. India’s engagement is important but inconsistent, with room to grow in trade, connectivity, and security cooperation.
For partners like Australia and Japan, the opportunity is real. Southeast Asian governments want alternatives in infrastructure, supply chains, and education. These ties are not designed to replace relationships with China. They are built to coexist with them, providing resilience and options if economic or political shocks arise. Where middle powers bring finance, technology, training, and standards, Southeast Asian leaders often welcome the mix because it improves bargaining power and helps manage exposure to any single partner.
Southeast Asian agency and diversification
Diversity of partners is a deliberate strategy. Most Southeast Asian countries avoid binary choices. They balance economic gains from China with security relationships with the United States and others, while elevating ties with Japan, Australia, India, and South Korea. The index underscores that no country in the region is wholly dominated by one external partner across all categories. Even so, many economies carry concentrated exposure to China in specific sectors. Tourism, commodity trade, and infrastructure finance can create pressure if demand shifts or projects stall.
Policy makers are also responding to global shifts. Energy transitions are reshaping investment decisions, pushing countries to retire plans for coal plants and to seek investment in cleaner energy. Efforts to diversify supply chains and to improve standards for transparency and environmental safeguards are part of this same trend. The aim is to secure growth and stability while keeping options open amid competition among major powers.
Country snapshots
Mainland Southeast Asia carries the strongest tilt toward China. Cambodia, Laos, and Myanmar feature large gaps in China’s favor in the index’s economic and diplomatic measures. Chinese trade, tourism, construction, and party-to-party relations have built habits of engagement that are hard to unwind. These ties bring benefits, but they also create potential points of pressure, especially where public debt or stalled projects weigh on budgets.
Indonesia illustrates the balance that many regional leaders seek. China is Jakarta’s top trading partner and a major investor in nickel processing, rail, and manufacturing. Yet Indonesia works with Japan on infrastructure, invites US and Australian investment, and keeps defense ties open with a wide range of partners. The pattern is similar in Malaysia and Thailand, where Chinese commerce is strong while governments cultivate multiple security and economic partners.
Vietnam’s calculus is especially delicate. Trade with China is deep, and Chinese capital is present in manufacturing supply chains. At the same time, Hanoi has advanced defense and high-tech cooperation with the United States and is building partnerships with Japan, India, and Europe. The Philippines is the clearest case of US security predominance in the region, shaped by alliance obligations and recent maritime confrontations with China. Singapore continues to be a critical security partner for the United States while expanding economic and diplomatic ties with China and other partners.
What to Know
- China leads the latest Southeast Asia Influence Index by a point, 65 to 64 over the United States.
- Beijing ranks as the top external partner in six countries, including Cambodia, Indonesia, Malaysia, Myanmar, Thailand, and Vietnam.
- The United States holds an advantage in the Philippines and Singapore, with strong defense cooperation anchoring both relationships.
- China dominates regional commerce, taking about 20 percent of ASEAN exports and supplying roughly 26 percent of imports.
- Chinese private investment accounts for about 21 percent of new project investment in Southeast Asia over the past decade.
- BRI delivery has been uneven, with more than 50 billion dollars in unfulfilled large project financing and only about one third of mega projects completed.
- China’s diplomacy is constant across the region, while recent US tariffs, aid cuts, and visa limits have strained Washington’s economic appeal.
- The United States remains the preferred defense partner for several states, especially in maritime Southeast Asia.
- Japan, Australia, South Korea, and India play important complementary roles, offering finance, technology, and training.
- Southeast Asian governments are diversifying partners and managing exposure to avoid dependence on any single country.
