China’s increasing economic exchanges with neighboring states have affected regional security and stability. In addition to the main powerhouses like Singapore and Japan, China has become more concerned about relations with other neighbors like Mongolia, Cambodia, Laos, and Myanmar.

Carnegie-Tsinghua’s Zhao Kejin hosted a roundtable discussion with Jeffrey Reeves, an associate professor at the Asia-Pacific Center for Security Studies, on the need for China to maintain stable relations with smaller neighboring states.

Impact of China’s Economic Exchanges With Neighboring States

Previously, China’s economic presence in countries like Cambodia, Myanmar, Mongolia, and Laos was positively received and demonstrated the success of China’s soft power. However, Reeves explained that China’s overreliance on economic tools to assert influence is causing tensions that could result in a breakdown in relations.

  • China’s Economic Footprint: According to Reeves, China has used economic cooperation and exchanges to promote stability on its borders. While this model suited China well in the past, it has become ineffective more recently. The land seizures and environmental degradation associated with several Chinese overseas companies, coupled with the perception that the Chinese are taking advantage of cheap labor in these neighboring states, has led to dissatisfaction abroad. Reeves explained that China must address the negative consequences of its economic activities in China’s neighboring countries.
  • Instability: China is often held responsible for unintended environmental and economic outcomes, stated Reeves, simply because China is present in these states and can be held accountable. This promotes instability both internally and externally. Internally, the weak states are affected by a divergence between government policies and societal demands. When governments resist social pressures it can lead to governmental instability. Externally, when the state does listen to its society, the results can affect international relations and long-term economic stability.
  • China’s Periphery Security Issues: Reeves stated that the end result for China is the same. Instability in peripheral states could ultimately affect China’s domestic security. He added that countries like Myanmar, Mongolia, Laos, and Cambodia are strategically important, which is why China prioritizes maintaining stability in these countries. Reeves explained that China does not want to have a failed state at its borders.

Balance of Power in Southeast Asia

  • Facing Challenges in the Region: Cracks are emerging in China’s traditionally strong multilateral relations, stated Reeves. If any of these countries were to align with foreign actors, it could lead to a great-power competition right on China’s doorstep. By applying pressure in countries like Myanmar and Laos, the United States is sending a clear message that they are there to balance China’s power in the region. Ignoring signs of weakening relations with these countries may result in future trouble for China, explained Reeves.
  • China’s International Relations Focus: Countries of greater significance for China are Japan, Vietnam, Indonesia, and Singapore, stated Carnegie-Tsinghua’s Sun Xuefeng. Singapore and Indonesia want to play a leading role among ASEAN countries, and China’s economic development, resulting in China’s increasing regional economic influence, could subvert their positions in Asia. More emphasis should be given to strong bordering states that have either territorial or maritime disputes with China. Japan and Vietnam have the most interactions with China and also have standing territorial disputes with China, concluded Sun.