How China can anchor Southeast Asia’s future in an uncertain world

China has a unique opportunity to cast itself as an anchor of stability for Southeast Asia now that the United States is retreating from its position as the rule maker of global trade.

US President Donald Trump’s policies of “de-risking” from China and imposing unilateral tariffs, including on developing countries, are fragmenting production networks and pushing firms to reimagine their manufacturing and logistics chains.

Asean has laid out a road map to manage such uncertainties in the form of four priorities for resilience and growth: advancing the digital economy, accelerating the energy transition, strengthening supply chains and deepening external cooperation.

China has the tools to contribute – from digital platforms to clean energy finance, and from its dual role as a market and production hub to its expanding diplomatic outreach.

Beijing’s stability pitch to the Association of Southeast Asian Nations is built on three pillars: continuity, relationships and shared development.

• Continuity of capital and projects. Chinese banks, state-linked companies and platforms have a reputation for moving quickly from memorandums of understanding to construction and delivery. In a volatile global environment, this “timing premium” matters. Long-term contracts provide certainty in supply, logistics and financing, offering Asean members a sense of stability that few others can match.
• Long-term relationships. China prides itself on fostering government-to-government links and crafting contracts designed to outlast political transitions. For Asean leaders wary of policy shifts, this continuity is appealing. Chinese firms often design projects with horizons measured in decades, ensuring cooperation survives changes in leadership and policy.
• A shared development narrative. Beijing’s rhetoric of industrial upgrading, technology transfer and job creation is backed by its localisation of manufacturing in sectors such as electronics, clean energy and the automotive industry.

Overall, the message is simple: China can contribute to a trajectory of growth with fewer surprises. But beneath this promise lies a question: does Beijing’s involvement reinforce Asean’s agenda or create new dependencies?

Successes and stumbles

China’s involvement in Southeast Asia has delivered visible benefits, but not without controversy.

Take Indonesia’s nickel mining and processing parks in Morowali and Weda Bay, for example. These industrial hubs have driven the country’s downstreaming push, creating thousands of jobs and spurring infrastructure development.

But they have also drawn criticism over worker safety, ecological degradation and opaque environmental, social and corporate governance standards. Civil society groups and research institutes argue that much of the value – profits, technology and managerial control – remains foreign, leaving local communities to bear the brunt of the social and environmental costs. These concerns have prompted the government to tighten safety audits and review environmental permits.

Similarly, the Jakarta-Bandung high-speed railway has faced cost overruns of about US$1.2 billion and financial losses, with Indonesia’s state-owned operator KAI absorbing US$170 million in deficits last year alone.

Critics warn of financial risks, yet the railway is popular. By February, it had transported more than 8 million passengers and talks are under way to extend the line to Surabaya. For Jakarta, the long-term benefits – urban development, land value gains and technology transfer – justify the initial losses.

In Laos, the Boten-Vientiane has transformed the nation into a “land-linked” economy. By early 2025, it had transported more than 48.6 million passengers and over 2 million tonnes of goods, revitalising border towns and integrating Laos into Asean’s supply chains. Planned extensions through Thailand, Malaysia and Singapore could further cement its role in regional connectivity.

Beyond physical infrastructure, a wave of private-sector investment is embedding Chinese firms in Asean’s clean energy industrial ecosystems. Between 2013 and 2023, China invested US$2.7 billion in regional clean energy projects, more than any other country.

Companies like Trina Solar in Vietnam and BYD in Thailand are localising production, creating skilled jobs and integrating domestic suppliers. In Indonesia, Wuling’s electric-vehicle operations are training local engineers and linking domestic firms to regional supply chains.

These examples show that Chinese investment can deliver long-term value when it builds local capacity rather than dependence.

Delivering legitimacy

China’s long-term role as a stability anchor in Southeast Asia depends on three factors:

• Transparency. Publishing clear terms on environmental and labour safeguards can prevent misinformation and build public trust.
• Fairness. Swift, public correction of violations – whether environmental or social – demonstrates that rules apply to everyone.
• Local value: Projects must deliver tangible benefits, from jobs to infrastructure, that communities can take pride in.

When investments feel inclusive and outcomes are locally owned, partnerships are seen as symbols of national progress rather than elite capture.

For Southeast Asia, the challenge is to ensure foreign investments align with national priorities. Projects must win public trust to deliver not just capital but legitimacy.

A positive relationship with Asean would refute Western claims that China has not been able to build constructive ties with developing nations. Indeed, success here could serve as a model for EU-African or US-Latin American relations.

Ignoring China’s stabilising dimension in Southeast Asia risks misreading the trajectory of Asean’s engagement and underestimating the appeal of predictability in an increasingly uncertain world.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect those of the Asia Research Institute, National University of Singapore.