Hedging in Southeast Asia

By Gigi Copeland and Khue Edwards

China’s ascendance on the international stage has in recent years become one of the most widely discussed phenomena in international relations. However, such conversations are almost always in reference to the US-China rivalry, while smaller players in China’s game who face direct consequences are often overshadowed. Vietnam and the Philippines offer two such examples.

Vietnam

In May 2014, China’s state-owned China National Offshore Oil Corporation (CNOOC) stationed the Haiyang Shiyou 981 oil rig in waters well within Vietnam’s exclusive economic zone. This zone is measured at 200 nautical miles from Vietnam’s baseline, within which Vietnam has jurisdiction over living and non-living resources. The crisis was a major wake-up call for Vietnam and underlined Chinese intentions, as the standoff verged on violence. In response, Vietnam modernized its navy and coast guard, acquiring submarines, missile corvettes, and patrol ships with the help of partners like the US and Japan. The most important thing Vietnam can do at this time is to strengthen key alliances and carefully navigate its relationship with China. In the wake of this superpower rivalry, Vietnam has chosen to play both sides and adopt a hedging strategy for the sake of its own sovereignty. An American partnership is essential to the Vietnamese balancing of China. In the case of Chinese aggression, Vietnam does not pose any concrete threat to China. However, with the support of the US, Vietnam has the capability to deter China. While remaining wary of China, Vietnam has sought to establish new communication channels, as Huong Le Thu outlines, including party-to-party talks, defense-focused dialogues, and a direct phone line for handling emergencies in the South China Sea. The maintenance of bilateral relations is tactical on Vietnam’s part to keep themselves in China’s good graces. As of now, Vietnamese strategic ambiguity is the only way forward. By hedging rather than aligning with either side, Vietnam benefits from the protection of the US without escalating tensions with China. Still, this hedging strategy will likely be unsustainable in the future, and Vietnam will be placed in a difficult position.

View of the Gulf of Tonkin (Source: Khue Edwards)

The Philippines

In June 2024, a Chinese vessel was accused of intentionally colliding with a Philippine supply ship near the Spratly Islands, injuring five onboard crew members, with one losing a finger. The incident, captured on video, attracted international attention and widespread condemnation for its brazen violation of international law, with US State Department spokesperson Matthew Miller calling the ramming “escalatory and irresponsible.” Despite being the most severe Sino-Philippines altercation in recent history, this incident is only one amongst a litany of altercations between the two parties that have taken place over the past two decades. As a partner to the US-led 1951 Mutual Defense Treaty, the Philippines has called on the US for support in pushing back against Chinese “gray-zone warfare in the South China Sea.” While critics of US presence on the archipelago argue that overly relying on military assistance from one of China’s most staunch adversaries may further expose the Philippines to Chinese aggression, given the current dynamics of other small-state alliances in the region, it appears that the Philippines may have little choice but to rely on its Western ally for support.

Despite downgrading its relationship with the US in the 1990s in hopes of bolstering its own nationalism and pursuing a more pragmatic relationship with its superpower neighbor, relations between the Philippines and the PRC have remained strained. Under President Benjamin Aquino III, the Philippines took a more assertive stance towards China, bringing its case against China to the court of arbitration in 2013. However, Aquino’s successor, Rodrigo Duterte, pivoted to a much more conciliatory approach, terminating joint US-Philippine Navy Patrols as part of his overall initiative to bring the Philippines closer to China for Chinese investment. The election of Bongbong Marcos has seen the implementation of a policy of so-called “strategic transparency,” in which not only has the Philippines condemned China’s behavior at global forums, but has also become the only ASEAN member nation to exit from China’s Belt and Road Initiative, the multi-trillion-dollar global infrastructure project which has secured other ASEAN members firmly under Beijing’s grasp.

Some theorize that Beijing’s increasingly aggressive actions in the South China Sea aim to drive the southeast Asian nation further away from its American ally, while others believed they are designed to test legal boundaries and provoke powers like the US and NATO into retaliating, framing China as defending its sovereignty while justifying further military expansion. Regardless of Beijing’s intentions, since the Philippines now relies on US military support only in the event of direct military confrontation, it is more vulnerable than ever to China’s assertive tactics in non-military disputes. Moreover, the Philippines stands to lose significantly if it cedes its South China Sea territories to China, given the area’s untapped oil reserves and strategic importance for defense and trade. Once a cornerstone of Philippine foreign policy, efforts to build a united ASEAN resistance against China’s incursions have yielded little progress due to Beijing’s economic influence over other littoral states like Malaysia, Indonesia, and Brunei. With China’s actions growing increasingly assertive, the Philippines may need to set aside its nationalist ambitions and lean more heavily on US support to counter Chinese aggression, as ASEAN appears unlikely to offer unified resistance.

This piece is a reproduction from its original issue in Hemispheres Volume 48 Issue 1. Read more here.