Southeast Asia in Great-Power Competition
Between Asserting Agency and Muddling Through

EXECUTIVE SUMMARY

MAIN ARGUMENT

Southeast Asia has become the epicenter of the U.S.-China competition in the Indo-Pacific—a situation that poses many challenges but also presents some opportunities. While the predominant narratives from the region suggest that countries reject the binary choice imposed by either great power, the strategies of individual countries and the intensity with which they exercise their own agency have been significantly different. Moreover, their capacity to respond to the rapidly deteriorating geopolitical circumstances has been weakened by the devastating effects of Covid-19. As variants wreak havoc, the region faces a broad economic recession for the first time in decades. Southeast Asian nations will be in greater need of economic stimulus and will value economic engagement even more than they already do. The ongoing decoupling in the U.S.-China trade relationship, along with the conspicuous absence of the U.S. from regional trade pacts and the lack of an economic pillar to its Indo-Pacific strategy, will further affect the perception of U.S. engagement in the region.

POLICY IMPLICATIONS

• The alignment politics in Southeast Asia are dictated by national interests rather than regional solidarity or even alliance commitments.
• The diversity and fluidity of the policies of Indonesia, the Philippines, and Vietnam demonstrate the region’s complexity and fast-changing landscape. The U.S. needs to invest more in understanding regional dynamics and avoid the tendency to lump countries together as one strategic unit.
• The U.S. cannot rely only on its security agenda but must increase its diplomatic presence by filling key posts. Without a broader message, U.S. initiatives will continue to face skepticism, if not distrust, from regional countries.

Huong Le Thu is a Senior Fellow in the Defence and Strategy Program at the Australian Strategic Policy Institute (ASPI) and an Adjunct Fellow at the Center for Strategic and International Studies in the Southeast Asia Program.