As China faces off with the United States over a punishing trade war, it is under pressure to shore up its friendships around the world, starting with its neighbors in Southeast Asia. But its relations there are complicated.
China’s leader, Xi Jinping, will be testing these ties this week as he visits Vietnam, Malaysia and Cambodia in the hope of blunting the effect of huge tariffs imposed by President Trump on Chinese exports to the United States.
Mr. Xi is likely to cast China as a reliable global partner in contrast to the unpredictable United States of President Trump, whose on-again, off-again tariffs have upended financial markets and confounded governments. While in Vietnam, for instance, Mr. Xi is expected to oversee the signing of around 40 agreements, including deals that would advance plans for Vietnam to accept Chinese loans for part of a $8.3 billion railway connecting northern Vietnam with China.
But his visit also points to a diplomatic tightrope that countries like Vietnam and Malaysia must walk as the Southeast Asian nations try to negotiate with the Trump administration for a reprieve from the tariffs.
Mr. Xi’s tour will start in Vietnam on Monday, followed by a three-day visit to Malaysia, ending the week in Cambodia.
Trade at the Forefront
For the past decade, Beijing has engaged in a huge push to extend its economic and political influence across Southeast Asia. China is now the region’s most important trading partner. Senior officials, including Mr. Xi, regularly travel there.
China is a major market for Vietnam’s agricultural products, while Vietnam imports raw materials from China for many factories driving exports. Between 60 and 90 percent of the raw materials for Vietnamese apparel heading for the U.S. market comes from China.
Trade, a complicated issue, is likely to top the agenda. Caught between the U.S. tariffs and the risks of China’s goods flooding local economies, Southeast Asia finds itself with limited options.
Since Mr. Trump imposed tariffs on Chinese goods in his first term, these countries have been alternative routes for those goods to reach the United States. That made Vietnam and Cambodia a target for Mr. Trump’s steep tariffs — which he has paused for 90 days.
These countries will also be concerned that as a result of the tariffs that Mr. Trump has maintained on Chinese goods, a glut of cheap Chinese goods, shut out of the U.S. market, could instead flow into Southeast Asia and overwhelm economies there.
Mr. Xi will want to know more about how other countries might respond to the U.S.-China trade war. He will also want to bolster ties in case frictions arise, said Ja Ian Chong, a professor of political science at the National University of Singapore.
“There is the very real potential that P.R.C. goods will start flowing to these areas and questions about overcapacity, potential Chinese dumping would come up again,” he said, referring to the People’s Republic of China. “So he’s got to fix those relations.”
Sonal Varma, chief economist for Asia excluding Japan at Nomura, said that local economies would probably introduce measures to prevent China from dumping its goods on local economies. “Every country is now trying to protect its home turf,” she said.
Balancing China with the United States
While seeking opportunities from China, the Southeast Asian leaders may also need to avoid appearing too close.
There are fears among some Vietnamese officials, for instance, that the high-profile nature of Mr. Xi’s trip, as well as language emphasizing China’s partnerships, might make it harder for Vietnam to win a long-term reprieve from Mr. Trump’s tariffs.
“Vietnam surely welcomes Xi’s visit to minimize its economic pains,” said Khang Vu, a visiting scholar in the Political Science Department at Boston College. “But it will have to avoid creating the impression that Vietnam is siding with China while negotiating a tariff reduction with the Trump administration.”
The prime minister of Malaysia, Anwar Ibrahim, defended the region’s relationship with China at a recent gathering of its officials.
“China is a very important player we can’t ignore and yes, some countries have problems with it,” he said at the meeting. “We continue to navigate in the best manner possible, to secure peace, security and obtain most benefits in terms of economy and investments.”
Security and Territorial Disputes
Beijing has also financed the reconstruction of a major naval base in Cambodia, giving the Chinese military access to one of the world’s most vital sea lanes. While in Malaysia, Mr. Xi is expected to offer his support of existing agreements to build rail links and ports in the country.
Zunaira Saieed contributed reporting from Kuala Lumpur, Malaysia, Sun Narin from Phnom Penh, Cambodia, and Alexandra Stevenson from Hong Kong.
