Southeast Asia Global Relations Outlook 2024
The Southeast Asia Global Relations Outlook aims to give a snapshot at the beginning of 2024, looking at the events over the past months that have shaped the region’s global relationships, and the dynamics that will determine them moving forward. The report explores the region’s relationships with the United States, China, the European Union India, Japan, South Korea, Taiwan, and the Gulf nations, as well as the implications of engagement in international agreements and initiatives. This is not an exhaustive list, but a selection of the most important or interesting developments as we enter the mid-2020s.
This content was originally published as a series of articles on the Institute’s website at the beginning of 2024.
Executive Summary
As we enter the mid-2020s, Southeast Asian countries find themselves facing a set of complex economic and security dynamics involving a range of global powers and blocs.
The ongoing strategic rivalry between the United States and China continues to cast a shadow over the region as it navigates a delicate balance between economic opportunities and security ties. This includes sifting the diminishing opportunities of China’s Belt and Road Initiative while also prospecting for opportunities as the process of derisking global supply chains away from China continues. Tensions between China and a number of countries in the South China Sea also continue to test the relationship. Yet China remains an important partner, and a China-ASEAN FTA stays on the table for 2024.
While the US has made a diplomatic push to re-engage economically with the region, to match comprehensive security ties with several countries, relations with the region will take a backseat to domestic concerns during an election year, when international trade inevitably becomes a more sensitive and politicised topic. Looking ahead, a new administration in the US could drastically alter the level of engagement with the region.
Following a historical trend to maintain a wide diversity of relationships, and with potentially unstable relations with the US and China, partnerships continue to develop with the EU and India. Both entities wield significant influence on the global stage and play crucial roles in shaping Southeast Asia’s economic landscape and geopolitical dynamics. Furthermore, Southeast Asia observes with interest the deepening engagement between the EU and India where discussions on trade cooperation, sustainable development goals, and climate change mitigation efforts present opportunities for enhanced global collaboration.
Over the years, the EU has emerged as one of the region’s largest trading partners and a key source of foreign direct investment and development assistance. Through initiatives such as the ASEAN-EU Dialogue and a growing number of bilateral trade agreements, the EU has fostered closer ties with Southeast Asian nations, promoting economic integration and sustainable development across the region.
Meanwhile, relations between Southeast Asia and India have gained momentum in recent years, driven by shared interests and mutual aspirations for growth, prosperity and independence from the influence of other major global powers. India’s “Act East” policy, aimed at bolstering engagement with Southeast Asia, has led to increased diplomatic exchanges, trade, and investment between the two regions. These efforts are generally met positively as India is viewed as a valuable partner in their quest for economic diversification and regional stability.
Closer to home, Southeast Asia maintains strong ties with East Asian neighbors – Japan, Korea, and Taiwan – each hosting a unique blend of cultural heritage, technological prowess, and economic power, they play crucial roles in shaping Southeast Asia’s regional dynamics and global engagements.
The relationship between Southeast Asia and Japan is characterized by a longstanding history of cooperation and collaboration. Japan has emerged as a key investor and development partner for Southeast Asian countries, contributing to the region’s economic growth and infrastructure development. The two partners celebrated a Commemorative Summit for the 50th Year of ASEAN-Japan Friendship and Cooperation in 2023, promoting people-to-people exchanges and sustainable development across the region.
Meanwhile, South Korea’s “New Southern Policy” aims to further strengthen ties with Southeast Asia, leveraging the region’s strategic importance and economic potential. Through initiatives such as the ASEAN-Korea Free Trade Agreement and the Korea-ASEAN Future-Oriented Cooperation, South Korea has bolstered its engagement with Southeast Asian countries.
Despite political sensitivities, Southeast Asia’s relationship with Taiwan has witnessed steady growth and diversification. Taiwan’s economic expertise and technological leadership have positioned it as a valuable partner for Southeast Asian countries, particularly in technology. While diplomatic relations between Taiwan and some Southeast Asian nations remain complex, economic and cultural exchanges continue to flourish.
Southeast Asia also continues to strengthen economic partnerships further afield, including the Gulf nations, leveraging complementarities in energy resources, trade, and investment. Relationships with the Gulf Cooperation Council (GCC) present avenues for enhanced cooperation in areas such as infrastructure development, tourism, and technology exchange.
Economies in the region are also party to a number of multilateral agreements and initiatives, including the International Partnership for Expanding Market Access (IPEF), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and Regional Comprehensive Economic Partnership (RCEP). In the context of failing global-level multilateralism at the WTO, these agreements create new opportunities for trade, markets access, and regulatory alignment, driving regional integration and fostering a conductive environment for investment and economic growth.
Against the backdrop of a slowing Chinese economy, and the potential for drastic change in US policy towards the region, this broad range of relationships is essential to supporting stability and economic opportunities for countries in the region through the rest of the 2020s.
About the Southeast Asia Public Policy Institute
The Southeast Asia Public Policy Institute is a research institute based in Bangkok and Singapore, working across the region. Our mission is to support the development of solutions to the most pressing public policy challenges facing Southeast Asia in the 21st century. The Institute undertakes in-depth research to develop actionable policy solutions on a range of issues across sustainability, technology, public health, trade, and governance. We convene dialogues with stakeholders and decisionmakers to drive discussion on the challenges and opportunities facing markets across the region. The Institute draws on a network of in-market researchers, advisors, and partners to provide insights and recommendations for governments, policymakers, and businesses.