China squeezes Southeast Asia
What happened
A new analysis shows China is extending economic leverage across Southeast Asia—only a small share of subsidized Chinese exports faces countermeasures in the region, and ASEAN governments are reluctant to confront Beijing. (foreignaffairs.com) At home, China closed its annual Lianghui with a renewed focus on pragmatic governance and execution, signaling the Party's priority on stability and growth amid rising external pressures. (cpa.org.au)
Why it matters
A 2025 IMD Business School study found that, except for Indonesia, ASEAN countries have placed countermeasures on under 7% of Chinese exports that Beijing subsidized, while G-7 countries took action on roughly 12–15% of those exports. (foreignaffairs.com)) China’s exports to ASEAN have exceeded its shipments to the United States and the EU since 2023 and rose a further 12% in 2024, with the growth concentrated in intermediate goods and an expanding share of final goods that compete with local manufacturers. (asiasociety.org)) Chinese firms and policy shifts are driving that flow: China’s mechanical‑electrical exports to Vietnam jumped about 32% in the first 11 months of 2024, and Chinese value‑added in ASEAN exports has risen sharply since the mid‑2000s. (seasia.co)) Regional politics constrain pushback—ISEAS researchers concluded most Southeast Asian governments “do not have the capacity nor intention to collectively oppose China,” while CFR reporting shows Chinese diplomats have privately pressed ASEAN states on sensitive issues. (iseas.edu.sg)) At the close of the Two Sessions, Premier Li Qiang’s government work report set a 2026 GDP target of 4.5–5.0%, a deficit‑to‑GDP ratio of about 4%, and a goal to create over 12 million new urban jobs. (english.www.gov.cn)) Beijing packaged those measures as execution‑oriented: the Two Sessions stressed boosting domestic demand, industrial modernization and higher R&D outlays while finalizing the 15th Five‑Year Plan—moves framed as prioritizing stability and growth amid mounting external pressures. (asiasociety.org))
Key numbers
- (cpa.org.au) A 2025 IMD Business School study found that, except for Indonesia, ASEAN countries have placed countermeasures on under 7% of Chinese exports that Beijing subsidized, while G-7 countries took action on roughly 12–15% of those exports.
- (asiasociety.org)) Chinese firms and policy shifts are driving that flow: China’s mechanical‑electrical exports to Vietnam jumped about 32% in the first 11 months of 2024, and Chinese value‑added in ASEAN exports has risen sharply since the mid‑2000s.
- (iseas.edu.sg)) At the close of the Two Sessions, Premier Li Qiang’s government work report set a 2026 GDP target of 4.5–5.0%, a deficit‑to‑GDP ratio of about 4%, and a goal to create over 12 million new urban jobs.
What happens next
- (iseas.edu.sg)) At the close of the Two Sessions, Premier Li Qiang’s government work report set a 2026 GDP target of 4.5–5.0%, a deficit‑to‑GDP ratio of about 4%, and a goal to create over 12 million new urban jobs.
Quick answers
What happened in China squeezes Southeast Asia?
A new analysis shows China is extending economic leverage across Southeast Asia—only a small share of subsidized Chinese exports faces countermeasures in the region, and ASEAN governments are reluctant to confront Beijing. (foreignaffairs.com) At home, China closed its annual Lianghui with a renewed focus on pragmatic governance and execution, signaling the Party's priority on stability and growth amid rising external pressures. (cpa.org.au)
Why does China squeezes Southeast Asia matter?
A 2025 IMD Business School study found that, except for Indonesia, ASEAN countries have placed countermeasures on under 7% of Chinese exports that Beijing subsidized, while G-7 countries took action on roughly 12–15% of those exports. (foreignaffairs.com)) China’s exports to ASEAN have exceeded its shipments to the United States and the EU since 2023 and rose a further 12% in 2024, with the growth concentrated in intermediate goods and an expanding share of final goods that compete with local manufacturers. (asiasociety.org)) Chinese firms and policy shifts are driving that flow: China’s mechanical‑electrical exports to Vietnam jumped about 32% in the first 11 months of 2024, and Chinese value‑added in ASEAN exports has risen sharply since the mid‑2000s. (seasia.co)) Regional politics constrain pushback—ISEAS researchers concluded most Southeast Asian governments “do not have the capacity nor intention to collectively oppose China,” while CFR reporting shows Chinese diplomats have privately pressed ASEAN states on sensitive issues. (iseas.edu.sg)) At the close of the Two Sessions, Premier Li Qiang’s government work report set a 2026 GDP target of 4.5–5.0%, a deficit‑to‑GDP ratio of about 4%, and a goal to create over 12 million new urban jobs. (english.www.gov.cn)) Beijing packaged those measures as execution‑oriented: the Two Sessions stressed boosting domestic demand, industrial modernization and higher R&D outlays while finalizing the 15th Five‑Year Plan—moves framed as prioritizing stability and growth amid mounting external pressures. (asiasociety.org))
