Opinion | Why the US could lose more ground in Southeast Asia

While the US remains Asean’s biggest investor, its investment in core infrastructure is limited. Meanwhile, China makes its presence felt

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Passengers take selfies during a Jakarta-Bandung high-speed rail ride in Indonesia in 2023. China’s focus on infrastructure and regional connectivity in Southeast Asia has had a profound impact. Photo: Xinhua

Published: 5:30am, 27 Mar 2025

At a recent US-China Economic and Security Review Commission hearing, experts argued that in strengthening its position in Southeast Asia, Washington should focus on “swing sectors” such as artificial intelligence, critical minerals and telecommunications rather than geopolitical “swing states”. They also suggested that the US should leverage its comparative advantages in the service sector and hi-tech industries, such as advanced chip manufacturing and aerospace, to counter China’s regional influence.

But this analysis overlooks the fundamental reasons why the US has struggled to compete with China in Southeast Asia despite strategic initiatives like the Obama administration’s pivot to Asia and the Free and Open Indo-Pacific strategy sustained across administrations.

The mainstay of these strategies has been to revitalise bilateral security alliances, engage with regional countries and their multilateral institutions to address global challenges like climate change and the pandemic, or promote liberal principles like freedom of navigation, human rights and democracy.

As a result, US engagement in the region has been more demonstrable to long-term security allies like the Philippines or economically developed states such as Singapore, but limited with regard to less developed non-allies like Cambodia.

Even as the United States remains the largest investor in Southeast Asia, the bulk of this investment has flowed to Singapore. And while American tech giants such as Microsoft, Google and Oracle are establishing data centres and cloud services in Malaysia and Thailand, US investment in core infrastructure such as transport and telecommunications has been limited.

This gap is particularly notable when compared to other major investors in the region. For instance, China’s Belt and Road Initiative has led to infrastructure projects across Southeast Asia, including railways and highways, thereby enhancing regional connectivity and economic integration.