China’s Visit And Economic Playbook In Vietnam, Malaysia, Cambodia: Solidifying Leverage And Belt And Road Initiative With Strategic Allies – Analysis

The U.S. had imposed a 145% tariff on Chinese imports last April, prompting China to seek stronger regional alliances. Amid interruptions brought on by U.S. tariffs, China’s President Xi Jinping urged for closer trade and supply chain connections with Vietnam on last week while attending the signing of dozens of cooperation agreements between the two communist-run countries in Hanoi, Vietnam last 14 April 2025.

The weeks-long tour, which is a component of a larger Southeast Asian journey, comes as China faces 145% U.S. levies and Vietnam is negotiating a 46% reduction in proposed U.S. tariffs that would otherwise take effect in July following the end of a global moratorium or global tariff freeze.

Meanwhile, Chinese President Xi Jinping called for a deeper cooperation with Vietnam in trade and supply chains during his visit. His remarks came as both nations signed a series of agreements, aiming to reinforce ties amid rising tensions from U.S. tariffs. The trip as part of abroader Southeast Asia tour, has been in the works for several weeks. It comes at a time when China is contending with new U.S. import duties of 145%, while Vietnam is working to negotiate down as abovementioned.

Key initiatives include:

Strengthening China-Vietnam Relations. During his visit to Hanoi, Xi and Vietnamese leaders signed 45 cooperation agreements focusing on supply chains, rail infrastructure, artificial intelligence, and green energy. Notably, Vietnam approved Chinese aviation regulators, facilitating the potential use of China’s COMAC passenger jets in the country. ​

Here, China gained a regulatory victory as Vietnam approved the use of aircraft certified by the Chinese aviation authority, clearing a path for Chinese-made COMAC passenger jets to enter the Vietnamese market. COMAC aircraft, while used by several Chinese airlines, have had difficulty securing international buyers or approvals.

On 13 April 2025, Vietnam’s budget carrier Vietjet and COMAC signed a memorandum of understanding in Hanoi. While details of the agreement have not been disclosed, earlier reports suggested that Vietjet would lease two COMAC C919 jets, operated by Chengdu Airlines crews, for use on domestic routes.

• Infrastructure and Trade Initiatives. The two nations agreed to assess the feasibility of new railway lines connecting their countries, aiming to enhance trade and connectivity. China committed to funding feasibility studies for these projects.
• Shared Stance on Trade Policies. Both countries expressed opposition to unilateral trade measures, implicitly criticizing U.S. tariffs. They reaffirmed support for a multilateral trade system under the World Trade Organization framework.
• Multilateral Trading System Continuum. China emphasized the importance of protecting the multilateral trading system, stabilizing global supply chains, and fostering an open international environment. He advocated for a more inclusive and balanced form of globalization and called for deeper China-Vietnam cooperation across various domains — including trade, business, infrastructure, 5G, AI, and green development. China also encouraged stronger people-to-people exchanges and greater Chinese investment in Vietnam.

In fact, a memorandum of understanding signed on Monday aims to enhance collaboration between the China Council for the Promotion of International Trade and the Vietnam Chamber of Commerce and Industry, which is responsible for issuing certificates of origin for goods.

Note that Vietnam plays a key role as an industrial and manufacturing hub in Southeast Asia. It relies heavily on imports from China, while the United States remains its largest export destination. The country is a vital supplier of products like electronics, footwear, and clothing to the U.S.

According to Vietnamese customs data, in the first quarter of this year, Vietnam imported around $30 billion worth of goods from China and exported approximately $31.4 billion to the United States. This continues a long-standing pattern in which Vietnam’s imports from China often mirror the value and fluctuations of its exports to the U.S.

Continued China Hedging in ASEAN:

After spending two days in Vietnam, Chinese President Xi Jinping continued his Southeast Asia/ASEAN tour with visits to Malaysia and Cambodia from Tuesday through Friday (last week). His last visits to Cambodia and Malaysia were nine and twelve years ago, respectively.

Xi’s return to Vietnam, his second in under 18 months, is part of a broader effort to strengthen ties with a neighbor that has attracted billions in Chinese investment, particularly as manufacturers have relocated from China to Vietnam to bypass U.S. tariffsintroduced during former President Trump’s administration.

Vietnamese Prime Minister Pham Minh Chinh expressed interest in deepening cooperation with China in areas such:

• defense;
• security;
• and infrastructure, particularly in railway development. Vietnam has agreed to use Chinese financing for new rail lines linking the two countries, a move aimed at enhancing connectivity and trade. 
• However, no formal credit agreement has been announced yet. Later that day, Chinh encouraged Beijing to offer concessional loans.

Despite growing economic ties, friction between the two nations persists, particularly over disputed territories in the South China Sea. Additionally, Vietnam’s recent trade moves to appease the U.S. — including the introduction of Elon Musk’s Starlink satellite service and a crackdown on alleged misuse of rules of origin in trade with China could strain relations further.

Vietnam has also imposed anti-dumping tariffs on some Chinese steel imports and ended a tax exemption for small-value parcels. This action is intended to curb the influx of low-cost Chinese products.

Furthermore, during President Xi Jinping’s visit to Malaysia (the second stop of his Southeast Asia tour) Malaysian Prime Minister Anwar Ibrahim praised China as a“rational, strong, and dependable partner“ amid the current global volatility.

Anwar criticized the state of global trade, stating that the world is not addressing the flaws of globalization constructively but is instead descending into economic tribalism. He warned that market access is increasingly being used as a political tool, turning what was once a multilateral system for shared prosperity into one driven by arbitrary disruptions and unilateral decisions.

By contrast, Vietnam took a more cautious approach. Rather than strongly criticizing the United States, it issued a joint statement with China noting that both countries would“pay attention” to trade and investment barriers and pledged to “oppose unilateralism.”

During President Xi Jinping’s final stop in Cambodia, the two nations reaffirmed their “ironclad” friendship and signed 37 agreements aimed at deepening their economic cooperation.

China, Cambodia’s largest lender, has poured billions into key infrastructure developments including highways, airports, and a major special economic zone. One of the most high-profile projects is the Funan Techo Canal, which Cambodian leaders view as a pivotal infrastructure initiative to enhance national development and reduce dependency on Vietnamese ports along the Mekong River.

Although China had previously refrained from making a public financial commitment to the 180-kilometer, US$1.7 billion canal, a project amounting to roughly 4% of Cambodia’s annual GDP, it did not offer new loans to Phnom Penh in 2024.

• The project has since been revised to 151.6 kilometers and is now valued at US$1.16 billion. According to an April 18 statement, it will be funded through a public-private partnership, with Chinese investors holding a 49% stake 

In a joint statement, both governments said that China supports Cambodia’s efforts to build the Funan Techo Integrated Water Conservancy Project, emphasizing the importance of feasibility and sustainability.

Strategic Analysis

1.     Xi’s visit underscores China’s strategic pivot towards Southeast Asiato counterbalance U.S. economic pressures. By bolstering ties with Vietnam, China aims to reinforce its regional influence and economic partnerships. The agreements signify a mutual interest in deepening economic integration, particularly in infrastructure and technology sectors.​

However, Vietnam’s cautious approach, such as not openly labeling projects under China’s Belt and Road Initiative, indicates a desire to balance relations with both major powers. This diplomatic tightrope reflects the complexities Southeast Asian nations face amid U.S.-China tensions.​

2.     Moreover, a robust economic tie is expected from both states. To recall back in 2024, China was Vietnam’s third-largest foreign investor, behind Singapore and South Korea. China also holds significant investment positions in other Southeast Asian countries, including Cambodia (largest investor) and Malaysia (third largest for approved investments).

3.     Amid intensifying trade tensions with the U.S., Xi called for Vietnam and China to collaborate more closely, especially in supporting the Global South and defending the interests of developing nations. Meanwhile, Vietnam faces a looming 46% U.S. tariff, which has been temporarily paused for 90 days, with imports currently taxed at 10%.

Xi’s prominent visit serves a dual purpose. On the economic front, it’s focused on expanding and diversifying China’s global economic presence. From a foreign policy perspective, the goal is to strengthen ties with countries that are feeling uncertain due to the fluctuating nature of U.S. tariffs under Trump.

Xi’s strategy now is to engage directly. Rather than using intimidation, he’s opting for a softer approach showing goodwill and possibly offering some ‘gifts’ in the form of trade deals or upgraded strategic partnerships.  Political gestures are meant to reassure other nations: aligning with China is a safe bet, especially if you’re growing wary of the U.S.

4.     Meanwhile, security relations between China and its neighboring countries have been under strain in recent years, particularly due to ongoing disputes over sovereignty in the South China Sea. Tensions escalated in February 2025 when Chinese naval forces conducted live-fire exercises near Vietnamese waters in the Gulf of Tonkin (referred to by China as the Beibu Gulf) shortly after Vietnam released a map asserting its territorial claims in the area. This reveal China’s readiness to assert its claims through shows of military strength even as it publicly advocates peaceful resolution.

• Chinese President Xi Jinping called for both countries to handle their disagreements constructively and to work together to maintain regional peace and stability. 

• Xi highlighted past diplomatic successes, stating that the two nations’ ability to reach agreements on land borders and the Beibu Gulf serves as proof that maritime disputes can be resolved through dialogue and negotiation. This is China doing its soft-power approach in ASEAN security contestation. By invoking past agreements such as the delimitation of land borders and shared waters in the Beibu Gulf, Xi aims to present a narrative that bilateral disputes can be managed and resolved without external interference, especially from powers like the U.S. This serves a dual purpose: reducing the appeal of outside mediation and reinforcing China’s image as a responsible regional leader.

From here, Xi’s messaging underscores China’s broader diplomatic strategy of promoting negotiation over confrontation at least rhetorically while continuing to assert its presence in contested regions like the South China Sea. 

For Vietnam, however, these gestures must be weighed against the realities of China’s assertive military activities and expanding regional footprint. While Hanoi might engage diplomatically, it remains cautious, especially given the growing involvement of external powers in Southeast Asia and its own desire to diversify partnerships beyond China.

Overall, Xi’s appeal for dialogue reflects China’s intent to manage tensions with a key neighbor while maintaining firm control over the narrative and the territory in South China Sea.

5.     On China and Malaysia, the contrasting tones from Malaysia and Vietnam reflect differing strategic calculations in Southeast Asia as the region navigates intensifying U.S.-China rivalry. Malaysia, under Anwar’s leadership, is openly aligning more closely with China, positioning itself as a partner that shares Beijing’s criticism of Western trade practices. Anwar’s rhetoric underscores frustration among emerging economies over what they see as a shift from cooperative globalization to protectionist policies driven by geopolitical agendas particularly from the West.

China benefits greatly from this narrative. By portraying itself as a consistent and fair trading partner, it seeks to rally regional allies around a vision of inclusive, multipolar global governance framing Western policies as destabilizing and self-serving. Vietnam, however, is walking a finer line. While it joined China in a general rejection of unilateralism, it avoided strongly worded critiques of the United States. This reserved tone reveals Hanoi’s strategic balancing act: it values economic ties with both superpowers and wants to avoid alienating either side. Vietnam’s more neutral stance reflects its desire to maintain trade and security partnerships with the U.S. while continuing to benefit from Chinese investment and supply chain integration.

Overall, these divergent diplomatic messages highlight the nuanced approaches Southeast Asian countries are adopting in response to the shifting global order. As China seeks to solidify its regional influence, countries like Malaysia appear more willing to align rhetorically and economically with Beijing. Others, like Vietnam, prefer to hedge their bets, maintaining flexibility in an increasingly polarized global environment.

6.     On China and Cambodia, Xi Jinping’s visit to Cambodia and the enthusiastic display of bilateral friendship reflect its ongoing strategy to solidify its influence in Southeast Asia, especially among smaller, more economically dependent states. Cambodia stands as a crucial outpost for China’s Belt and Road Initiative (BRI), not just economically but strategically, as it offers Beijing a stable and loyal partner near the contested South China Sea and the heart of mainland Southeast Asia.

7.     By reinforcing ties with Cambodia through infrastructure investments and new economic agreements, China is consolidating long-term leverage. Projects like the Funan Techo Canal have geopolitical undertones reducing Cambodia’s reliance on Vietnam (which is more geopolitically ambivalent toward China) while tying the country closer to Beijing through economic dependency and shared strategic interests.

While China’s financial approach is now more cautious—with a noticeable absence of new loans in 2024, the shift toward public-private partnerships allows it to maintain influence without adding to Cambodia’s national debt, which is already heavily tilted toward Beijing. Again, the 49% Chinese ownership in the canal also ensures Chinese commercial and strategic involvement in a key regional waterway.

This also sends a message to other Southeast Asian countries: China is willing to invest, but increasingly on terms that reduce its own risk. Meanwhile, for Cambodia, the deepening relationship with China offers economic lifelines and political backing, though it may come at the cost of reduced diplomatic flexibility in regional affairs, especially as tensions with other ASEAN members—such as Vietnam—persist over issues like Mekong River governance and Chinese military presence.

8.     On ASEAN at large, several Southeast Asian nations are increasingly cautious about being inundated with low-cost Chinese products that can no longer enter the U.S. market due to steep tariffs. China already maintains a trade surplus with Vietnam, exporting goods worth about 1.6 times more than it imports from the country. Since 2023, the Association of Southeast Asian Nations (ASEAN) has collectively surpassed both the United States and the European Union to become China’s largest export destination, based on Chinese customs figures.

Vietnam, emerging as a major manufacturing hub, has attracted a wave of Chinese investment in recent years. This trend is driven by companies relocating their supply chains from China to benefit from Vietnam’s lower labor costs and to buffer against U.S. tariffs. Between 2017 and 2024, trade between China and Vietnam nearly doubled, positioning Vietnam as China’s top trade partner in Southeast Asia.

From here, this shift in trade dynamics highlights the evolving economic landscape in Southeast Asia and the broader geopolitical maneuvering between major powers. As U.S. tariffs close off access to the American market for Chinese goods, China is increasingly turning to its regional neighbors to absorb the overflow. However, this redirection of trade has sparked concerns among ASEAN nations about the long-term implications of becoming a dumping ground for Chinese products, potentially undercutting local industries.

Vietnam’s role is especially pivotal. Its rapid industrial growth, competitive labor force, and strategic location have made it both a recipient of Chinese capital and a production base for exports. While this influx of investment has boosted Vietnam’s economy, it also increases economic dependence on China – a dynamic that Vietnam views cautiously, particularly given its territorial disputes with China and broader efforts to balance relations with the West.

China’s growing trade dominance in the region, with ASEAN surpassing traditional Western markets, reflects a broader strategy to insulate itself from Western economic pressure by deepening ties with developing economies. This not only enhances China’s leverage in regional trade but also shifts the center of global economic gravity closer to Asia.

Nevertheless, this realignment is not without friction. Countries like Vietnam must navigate the dual challenge of benefiting from Chinese trade while protecting their own economic sovereignty and strategic autonomy. The ongoing recalibration of global supply chains and trade routes will continue to test the resilience and cohesion of ASEAN, especially as geopolitical rivalry between the U.S. and China intensifies in the Indo-Pacific region.

Overall, the visit highlights China’s efforts to solidify regional alliances and promote a multilateral trade approach in response to increasing U.S. protectionism.​

Also, Xi’s visit in those three ASEAN-member states reflect China’s evolving playbook: strategic investment, tighter economic integration, and long-term positioning — all under the guise of “friendship” — to secure influence in a region increasingly shaped by great-power competition.

• Ideas and/or views expressed here are entirely independent and not in any form represent author’s organization and affiliation.