Xi banks on a band of brothers amid trade tensions
China’s president tempts Southeast Asia neighbors with talks and deals to combat US tariffs
In the lead-up to Chinese President Xi Jinping’s visit to Southeast Asia neighbors, a Ministry of Foreign Affairs statement claimed Beijing’s relations were “at their best in modern times.”
The communique emphasized China’s commitment to prioritizing countries in the region as relations between major powers, namely the the United States, continue to deteriorate.
Following US President Donald Trump’s “Liberation Day” tariffs, Xi’s tour of Southeast Asia promoted China as a more reliable partner and emphasized the need for regional unity in the face of economic confrontation and disruption.
Trump originally levied some of his highest duties on Southeast Asia, with Cambodia facing a 49% rate, Vietnam closely behind at 46%, and Malaysia at 24%. He later paused the “reciprocal” tariffs for 90 days and imposed a universal 10% rate on global imports.
Xi’s visit in mid-April, though planned before Trump’s announcement, was dominated by coverage of China’s outreach to the region amid US economic threats.
High tariffs
On his first stop in Vietnam, Xi said the Chinese and Vietnamese governments should “jointly oppose hegemonism, unilateralism, and protectionism.” The meeting was his second visit in the last 18 months.
He signed 45 cooperation agreements with the general secretary of the Communist Party of Vietnam, To Lam, on issues ranging from supply-chain integration to railways. One related directly to the Trump administration’s rationale for levying high tariffs on Vietnam.
The announcement promised to increase coordination between the China Council for the Promotion of International Trade and the Vietnam Chamber of Commerce and Industry, which designates rules of origin for export products.
Vietnam benefited from the first Trump administration’s efforts to decouple American economic interests from China, with many US firms such as Apple, Intel, and Nike shifting production to countries in Southeast Asia.
Now, the White House views Vietnam as a backdoor conduit for Chinese exports to the United States. Vietnam has promised to crack down on Chinese transshipments, but Trump accused Xi and Lam of scheming to “screw” the United States in their meeting.
Vietnam faces a difficult balancing act of ingratiating itself with the Trump administration while maintaining its relationship with China.
Next, Xi called for the region to band together in a trip to Malaysia and “jointly resist the undercurrents of geopolitical and camp-based confrontation,” as well as “protectionism.”
Neighborhood diplomacy
Malaysian Prime Minister Anwar Ibrahim noted China is the country’s most significant trading partner and lauded Beijing as a “rational, strong, and reliable” ally. Anwar has visited China three times since he became prime minister in 2022.
While in Kuala Lumpur, Xi signed 31 memoranda of understanding, pledging to boost cooperation on issues from tourism to agriculture.
As China diversifies its economy to insulates itself from US tariffs, analysts suggested Malaysia’s burgeoning high-tech industry makes it an appealing export market for Beijing. Xi last visited Malaysia in 2013.
On his final stop in Phnom Pehn, Xi proclaimed, “Cambodia is a priority in China’s neighborhood diplomacy” and urged it to “resist protectionism.”
After a meeting among Xi, Cambodian Prime Minister Hun Manet, and longtime former leader Hun Sen, the two nations announced 37 cooperation agreements.
The covered agriculture, education, finance, health, information, investment, tourism, trade, water resources, women’s affairs, and youth work.
The leaders also confirmed US$1.2 billion in funding for the long-embattled Funan Techo Canal, which will link the Mekong River to the Gulf of Thailand.
Although Cambodia held a groundbreaking ceremony for the project in August, construction was suddenly halted a few days later.
Project financing
Reuters reported in November that Cambodia’s partner, the state-owned China Road and Bridge Corporation, had expressed misgivings about the project’s financing. This was Xi’s first visit to the country since 2016.
Abi McGowan is the global conflict analyst at the Council on Foreign Relations. Aanika Veedon is at Georgetown University Walsh School of Foreign Service.
This edited article was published by the Council on Foreign Relations under a Creative Commons license. Read the original here.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy of China Factor.