Xi Southeast Asia Visit: Challenges, Objectives, and the Impact of U.S. Strategy

Chinese President Xi Jinping is set to visit Vietnam, Malaysia, and Cambodia starting 14 April 2025, aiming to bolster ties with ASEAN nations amid the intensifying U.S.-China tariff war. However, the South China Sea sovereignty disputes, Southeast Asian countries’ growing alignment with the United States, and their complex calculations pose significant challenges. Meanwhile, the U.S. strategy in Southeast Asia shapes the regional landscape, constraining China’s ambitions. Below is a detailed analysis of the obstacles Xi’s visit may face, its intended objectives, the calculations of Vietnam, Malaysia, and Cambodia, and how U.S. policies influence the dynamics.

Challenges Facing Xi Jinping’s Visit

1. South China Sea Sovereignty Disputes
   The South China Sea disputes remain a core issue straining China’s relations with Vietnam and Malaysia, complicating Xi’s visit.
   • Vietnam’s Wariness: Vietnam claims sovereignty over the Spratly and Paracel Islands and frequently protests Chinese vessels entering its Exclusive Economic Zone (EEZ). The 2016 Hague Tribunal ruling rejected China’s “nine-dash line,” yet China continues to expand artificial islands and military deployments, heightening Vietnam’s vigilance. During Xi’s visit, Vietnam may press for concessions, such as reduced Chinese patrols or progress on a Code of Conduct (COC). Without tangible progress, Vietnam is likely to remain cautious, leaning on the U.S. and Japan for strategic balance.
   • Malaysia’s Quiet Resistance: Malaysia objects to Chinese activities near Luconia Shoals and has increased joint maritime exercises with the U.S. While Malaysia avoids escalating disputes publicly, domestic concerns about Chinese investment linger. Xi’s visit may focus on infrastructure deals to sideline tensions, but Malaysia is unlikely to endorse China’s South China Sea stance, wary of domestic backlash and its U.S. ties.
   • Cambodia’s Exception: Cambodia, with minimal stakes in the South China Sea, aligns with China for economic aid. Xi may leverage Cambodia to temper ASEAN criticism, but its limited influence cannot sway Vietnam or Malaysia.
   • Overall Impact: The disputes fuel distrust of China’s intentions. Even if Xi offers economic incentives, Vietnam and Malaysia’s strategic caution will persist. Escalated Chinese maritime actions could worsen tensions, undermining the visit’s goodwill.
2. Southeast Asian Alignment with the U.S.
   The U.S. has ramped up diplomatic, economic, and military engagement in Southeast Asia, challenging China’s influence and complicating Xi’s outreach.
   • Vietnam’s Balancing Act: Upgraded to a “comprehensive strategic partnership” with the U.S. in 2023, Vietnam relies on the U.S. as its largest export market (30% of GDP in 2024). Fearing U.S. trade reprisals, such as anti-dumping probes, Vietnam will likely avoid aligning with China on contentious issues like opposing U.S. South China Sea operations during Xi’s visit.
   • Malaysia’s Multilateral Approach: Malaysia maintains steady military cooperation with the U.S., including participation in RIMPAC exercises, while seeking investment from Japan and Australia to diversify reliance. Xi’s visit may yield infrastructure agreements, but Malaysia will prioritise neutrality, preserving economic and security ties with the U.S.
   • Cambodia’s Pro-China Stance: Cambodia, estranged from the U.S., depends heavily on Chinese investment (40% of its external debt in 2024). Xi’s visit is likely to proceed smoothly, but Cambodia’s pro-China tilt holds little sway over Vietnam or Malaysia, which value U.S. markets and security assurances.
   • U.S. Influence: Through initiatives like the Indo-Pacific Economic Framework (IPEF), military aid, and joint exercises (e.g., with Vietnam and the Philippines), the U.S. counters China’s pull. Xi’s economic pledges may appeal, but they cannot fully offset U.S. strategic leverage, particularly in Vietnam and Malaysia.
3. Regional Calculations and Economic Pressures
   • Tariff War Fallout: The U.S.’s 145% tariffs on Chinese goods push China to seek alternative markets and supply chains. Vietnam and Malaysia are prime candidates, but both fear Chinese “origin-washing” could harm their U.S. trade. Xi must convince them to accept more Chinese investment without triggering protectionism or U.S. retaliation.
   • ASEAN Divisions: ASEAN lacks unity on the South China Sea and U.S.-China relations, with Vietnam and the Philippines leaning pro-U.S., Cambodia and Laos pro-China, and Malaysia and Indonesia neutral. Xi’s push for a China-friendly COC is stalled, unlikely to advance significantly during the visit.
   • Domestic Pressures: China’s slowing economy, hit by tariffs and weak demand, demands diplomatic wins. A lack of concrete outcomes could draw domestic criticism of Xi’s visit as mere optics.

Objectives of Xi Jinping’s Visit

Xi’s visit seeks to address the tariff war and geopolitical challenges, with the following goals:

1. Stabilising Regional Trade and Supply Chains
   • ASEAN is China’s largest trading partner, with bilateral trade exceeding $1 trillion in 2024. Xi may secure trade deals, debt relief, or investment projects to maintain ASEAN markets’ openness. Vietnam absorbs Chinese steel and textiles, while Malaysia is key to electronics supply chains.
   • By establishing factories in Vietnam and Malaysia (e.g., industrial parks), China can shift production to bypass U.S. tariffs. New investment announcements during the visit could solidify regional supply chains, reducing U.S. reliance.
2. Countering U.S. Geopolitical Influence
   • Xi may highlight “shared development” through infrastructure investments, like Malaysia’s rail projects or Cambodia’s ports, to dilute the U.S. Indo-Pacific Strategy’s appeal. In Cambodia, China can cement its role as a key ally, indirectly checking pro-U.S. states.
   • In Vietnam, Xi may leverage ideological ties (Communist Party dialogues) to nudge neutrality, preventing a full tilt toward the U.S.
3. Mitigating Diplomatic Isolation
   • Facing containment by the U.S. and allies like Japan and Australia, Xi needs to project global support. Visits to Vietnam and Malaysia signal “China-ASEAN unity,” countering Western narratives.
   • Public gestures, such as joint statements or cultural exchanges, bolster China’s voice in forums like the UN or ASEAN summits.
4. Advancing Belt and Road Initiative (BRI)
   • Xi may push new BRI projects, such as port upgrades in Malaysia or economic zones in Cambodia, expanding China’s regional footprint. These create markets for Chinese firms and enhance soft power.
   • In Cambodia, Xi could strengthen strategic assets like the Ream Naval Base, boosting China’s South China Sea presence.

Limitations:

• Economic deals cannot fully bridge strategic divides. Vietnam and Malaysia welcome investment but fear debt traps and sovereignty risks (e.g., militarised ports).
• The tariff war’s roots lie in U.S.-China rivalry; ASEAN can only cushion, not resolve, China’s economic woes.
• South China Sea tensions erode China’s credibility, leading ASEAN states to hedge rather than fully align.

Southeast Asian Countries’ Calculations

1. Vietnam: Economic Gains, Strategic Balance
   • Calculations: Vietnam seeks Chinese investment to boost manufacturing (15% of FDI in 2024), but is wary of China’s South China Sea moves. Reliant on the U.S. market, Vietnam prioritises trade stability, fearing pro-China moves could trigger U.S. sanctions.
   • Strategy: Vietnam may sign trade or investment deals with Xi but will demand South China Sea restraint (e.g., fewer fishing disputes). It will deepen ties with the U.S., Japan, and India, as seen in recent U.S. semiconductor pacts, to counter China.
   • Challenges: Domestic nationalism opposes pro-China policies, and Xi’s overtures risk public protests, limiting Vietnam’s flexibility.
2. Malaysia: Pragmatic Neutrality, Risk Diversification
   • Calculations: Malaysia views China as a vital investor (20% of FDI in 2024), especially for 5G and ports, but relies on the U.S. market (15% of exports). It aims to avoid choosing sides.
   • Strategy: Malaysia may renew infrastructure contracts with Xi (e.g., East Coast Rail Link) but will sidestep South China Sea or U.S.-China disputes. It will court Japan, the EU, and Gulf states (via 2025 GCC summit) to reduce China dependence.
   • Challenges: Domestic debates over Chinese investment (e.g., land rights, ethnic Chinese influence) cap cooperation. Malaysia also fears Chinese dumping could harm local industries, requiring a balance between openness and protectionism.
3. Cambodia: Pro-China for Profit, Limited Sway
   • Calculations: Cambodia leans on China for aid (40% of external debt in 2024), seeing it as its main patron. It hopes Xi’s visit brings more infrastructure funds (e.g., highways, power plants).
   • Strategy: Cambodia may endorse China’s BRI and South China Sea stance for economic rewards, acting as China’s voice in ASEAN. Its influence, however, cannot shift Vietnam or Malaysia’s positions.
   • Challenges: Cambodia’s pro-China tilt isolates it from Western markets, limiting its regional clout and global options.

U.S. Strategy in Southeast Asia and Its Impact

The U.S. pursues an Indo-Pacific Strategy to counter China, shaping ASEAN’s response to Xi’s visit through multifaceted efforts:

1. Economic Engagement: Indo-Pacific Economic Framework (IPEF)
   • Launched in 2022, IPEF includes Vietnam, Malaysia, and five other ASEAN states, focusing on supply chains, clean energy, and digital trade. Representing 40% of global GDP, IPEF appeals to ASEAN despite lacking tariff cuts. Vietnam and Malaysia use it to diversify from China, diluting Xi’s investment offers.
   • U.S. tech investments, like Intel’s 2024 Vietnam expansion, position ASEAN as an alternative manufacturing hub, challenging China’s supply chain dominance. Xi must offer competitive terms, but China’s fiscal constraints may limit flexibility.
2. Security Cooperation: Military Ties and South China Sea
   • The U.S. bolsters Vietnam, Malaysia, and the Philippines with coast guard training and joint drills, enhancing their South China Sea capabilities. A 2023 U.S.-Vietnam defence pact deepened intelligence sharing, emboldening Vietnam in talks with China.
   • U.S. “freedom of navigation” operations challenge China’s claims, tacitly backed by Vietnam and Malaysia. During Xi’s visit, both may avoid criticising these to preserve U.S. security ties, curbing China’s leverage.
3. Diplomatic Outreach: Engagement and Division
   • High-level U.S. visits and summits (e.g., 2024 U.S.-ASEAN Summit) signal commitment, countering China’s proximity advantage. The U.S. upgraded Vietnam ties and signed digital trade deals with Malaysia, broadening its appeal.
   • The U.S. exploits ASEAN splits, backing the Philippines’ South China Sea stance to pressure China indirectly. Xi struggles to unify ASEAN behind China, with Cambodia’s support insufficient to shift the balance.
4. Soft Power and Values
   • The U.S. promotes a “rules-based order,” resonating with Vietnam and Malaysia’s interest in transparent governance, contrasting China’s authoritarian model. While ASEAN resists full alignment with U.S. democracy, concerns over BRI debt enhance U.S. appeal.
   • Programs like the Young Southeast Asian Leaders Initiative (YSEALI) build long-term influence. Xi’s economic focus may lack the cultural or ideological pull of U.S. efforts.

Impact on Xi’s Visit:

• U.S. economic and security commitments make Vietnam and Malaysia cautious about deepening China ties. Xi’s offers must outshine U.S. incentives, but South China Sea tensions and domestic pressures constrain him.
• U.S. division tactics deepen ASEAN fractures, thwarting Xi’s bid for a pro-China consensus. Cambodia’s alignment helps, but Vietnam and Malaysia prioritise U.S. ties.
• The U.S.’s soft power and military presence cast it as a vital counterweight, limiting Xi’s gains to short-term deals rather than strategic shifts.

Conclusion and Outlook

Xi Jinping’s Southeast Asia visit seeks to mitigate the tariff war’s economic toll and U.S. containment through trade, investment, and diplomacy. It may yield agreements, stabilise supply chains, and reinforce allies like Cambodia. Yet, South China Sea disputes, ASEAN’s U.S. alignments, and Vietnam and Malaysia’s pragmatism cap China’s breakthroughs. The U.S.’s Indo-Pacific Strategy—spanning IPEF, military ties, and soft power—ensures ASEAN hedges between powers rather than fully embracing China.

Long-term, Xi must balance economic carrots with strategic restraint. Hardline South China Sea policies risk alienating ASEAN, while concessions could spark domestic backlash. The U.S.’s sustained engagement signals ongoing competition, with Xi’s success hinging on offering credible, non-threatening cooperation.