ASEAN faces challenges from China-US fallout

Last year ASEAN coped with two key regional challenges – the Myanmar crisis and tensions surrounding overlapping maritime claims in the South China Sea. 

They will continue to test the forum in 2025, with success depending on member states’ ability to work together despite external pressures.

Since the military coup in 2021, Myanmar has been in a state of political turmoil, with an ongoing civil war leading to a humanitarian crisis. 

ASEAN’s response has been largely criticised for being ineffective.

China’s assertive claims in the South China Sea, which overlap with several forum members – Brunei, Malaysia, the Philippines and Vietnam – remain a flashpoint. The slow pace of the negotiations on the Code of Conduct continues to undermine regional stability.

But, perhaps, the most concerning aspect of the South China Sea disputes is the escalating tension between the Philippines and China that led to physical confrontations, with injuries suffered by Filipino personnel last year.

Great powers

Besides regional challenges, ASEAN also had to contend with the rivalry between the United States and China.

Tensions between these great powers over trade, the South China Sea, Taiwan and high-tech are making it harder for nations to maintain neutrality or strategic autonomy.

Still, Myanmar, the South China Sea and the US-China rivalry will continue to be the dominant issues this year, albeit more challenging.

On the Myanmar front, ASEAN may be placed in a difficult position given the junta’s push for a general election in 2025, which will be designed to entrench the military’s stay in power. 

The forum will need to decide whether to endorse it, even if it is not free and fair and does not garner the broader support of the country’s population. ASEAN must consider this issue carefully, as its credibility will be impacted if it endorses an election perceived as a “sham.”

Beijing has also demonstrated that it has sided with the junta after providing the latter with combat aircraft in 2024. If more Chinese weapons flow into the country to support the military, the civil war will likely continue, increasing the outflow of refugees.

This may put pressure on ASEAN members, such as Indonesia, Malaysia and Thailand, if the forum fails to push Beijing to cease arms supply to the junta.

As for the South China Sea issue, the Code of Conduct negotiations will continue without much progress, primarily due to lack of trust from the different parties.

Missile system

The China-Philippines confrontation over their overlapping claims is a potential flash point. Given China’s aggression in 2024, Manila is pursuing defence cooperation with multiple partners and ramping up its military modernisation. 

In December, Manila declared its intention to acquire the Typhon midrange missile system, attracting Beijing’s ire.

US President Donald Trump’s return to the White House is another critical variable that may impact ASEAN, especially on the economic front.

He launched a tariff war, worsening trade relations between Washington and Beijing in a move to check China’s growing clout in advanced technology. 

Already under the Biden administration, Washington announced it would impose tariffs on solar panel imports that Chinese manufacturers produce in four ASEAN states – Cambodia, Malaysia, Thailand and Vietnam.

With Trump focusing on reducing trade deficits, the forum could be a primary target. According to the data, its members in 2023 had a trade surplus of more than US$160 billion with the US. Despite the gloomy outlook, there are silver linings.

The Malaysian government under Anwar Ibrahim has an ambition to lead ASEAN in resolving the Myanmar crisis. With the right strategy and approach, one that brings all parties to the negotiating table, Kuala Lumpur could lay the groundwork to find lasting peace.

The South China Sea dispute is complex, involving several parties with different interests. 

In particular, the Philippines’ confrontation with Beijing could be intertwined with the US-China rivalry and tensions over Taiwan. As the ASEAN Chair and given its warm relations with China, Malaysia could be the bridge to ensure the conflict does not escalate further.

On the economic front, members Malaysia, Thailand and Vietnam became partners of BRICS last year, an economic bloc that could be a counterweight to the Western-led G7.

Economic interests

Indonesia became a full BRICS member in early 2025. Again, Malaysia could act as a bridge between the Southeast Asian regional grouping and BRICS. 

ASEAN could also leverage regional groupings, such as the Gulf nations and Central Asia, to pursue common economic interests and minimise the impacts of Trump’s zero-sum approach on trade.

Yet the forum will have its work cut out this year. The organisation’s effectiveness in addressing Myanmar’s political crisis, maritime disputes and great power competition will determine its relevance in an increasingly complex regional order.

Abdul Rahman Yaacob is a Research Fellow at the Southeast Asia Program at the Lowy Institute. Concurrently, he is an Academic Advisor in the ASEAN-Australia Defence Postgraduate Scholarship Program (AADPSP) at the Strategic & Defence Studies Centre at The Australian National University.

This edited article is republished from East Asia Forum under a Creative Commons license. Read the original article here.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.