“In the Asia-Pacific, we saw a region of remarkable promise, but also genuine uncertainty and political risk. Many nations have experienced rapid economic transformation that has fundamentally created a new dynamic: rising ambitions and rising tensions. But the rules and norms that could provide predictability to deal with both those changes, the order needed remained incomplete.” said at the time Vice President Joe Biden on July 19, 2013.
The Southeast Asia region of the world is of great geopolitical, economic, and strategic importance for the various powers around the globe, most importantly the U.S. and China. As such it is in the United States’s best interest to build relations with Southeast Asian partners — and as a matter of fact, the U.S. has been touting and promoting its presence in the region as of late; at the annual Shangri-La Dialogue in Singapore in June for instance, U.S. Secretary of Defense Lloyd Austin titled his remarks the “New Convergence in the Indo-Pacific.” The U.S. wants Southeast Asian nations to know that it is Uncle Sam that will make them rich.
However, the most paramount investments in the region have been from China, not the U.S.: in truth U.S. influence in the region has been dwindling for quite some time. To illustrate, the Foreign Affairs magazine published by the Council on Foreign Relations reported “the ISEAS-Yusof Ishak Institute—a research institute funded primarily by the Singaporean government but that conducts its work independently—polls between 1,000 and 2,000 respondents in academia, think tanks, the private sector, civil society, nonprofit organizations, the media, government, and regional and international organizations from the ten countries in the Association of Southeast Asian Nations (ASEAN). The survey is the closest thing the region has to a longitudinal study of “elite opinion” on regional and international matters, providing a good sense of the trajectory of perceptions, even if some might quibble with its finer details. In the poll this year, the majority of respondents picked China over the United States when asked whom ASEAN should align with if forced to choose between the two. This was the first time respondents picked China since the survey began posing this question in 2020.” (Kuok, Lynn. America is Losing Southeast Asia: Why U.S. Allies in the Region Are Turning Toward China. Foreign Affairs. September 3, 2024). Essentially, America is losing support in Southeast Asia.
The Biden Administration’s efforts to combat the U.S.’s diminishing influence in the region has been sought through investment rather than trade; trade deals in the region such as the Trans-Pacific Partnership have historically been unpopular. However, what was once an advantage the U.S. held in investment via quality has been turned into an even level playing field: China’s investment quality can now compete with the United States’s. There is no longer anything special about U.S. foreign investment in Southeast Asia. Furthermore, although the U.S. has invested more in the region in general, the bulk of U.S. investment in Southeast Asia arrived in decades past. In the most recent decade, China invested $218bn, whereas America invested only $156bn.
Nonetheless, The U.S. has seen some successes in the region. Joe Biden’s administration strengthened ties with countries such as the Philippines, securing access to four new military facilities, and Vietnam, obtaining a comprehensive strategic partnership. Relations with other nations in Southeast Asia on the other hand have seen more losses with the United States, and gains with China.
If U.S. investment quality in Southeast Asia is on par with China, and trade deals remain unpopular, then one of the few options the U.S. has left is to increase foreign investment into Southeast Asia. The U.S. also lacks in certain areas of foreign investment in the region such as electric vehicles or processing critical minerals, which China proudly leads in. Ultimately, private firms which currently do not invest enough in Southeast Asia will not be sufficient to save the U.S.’s dwindling influence in the region. America has no advantage on quality or quantity. This is especially concerning as well given China’s authoritarian nature: for example, Joko Widodo, Indonesia’s president, says that he has been reluctant to criticize China over its actions in the South China Sea or Xinjiang for fear of losing its backing for his infrastructure program. However, this means that investment from China can be won or lost more easily over geopolitics than with the United States.
The trend of diminishing influence in Southeast Asia is not unique — the U.S. has been losing influence in the south globally in countries China has been courting aggressively. However, the Southeast Asia region is of utmost importance due to its geopolitical location. As of now, the fight for Southeast Asia seems like an uphill battle, but only time will tell how the U.S. manages itself in the region.
