China’s Influence in East Asia:

East Asia is the front line of the PRC’s goal of achieving regional hegemony and ultimately, global dominance. The region also serves as the focal point of Beijing’s Belt and Road Initiative (BRI) under which Beijing has offered large-scale investments in exchange for political and economic indebtedness. The PRC’s coercive economic statecraft in East Asia has sought to consolidate the PRC’s control over the strategic geography of the region, which includes numerous maritime chokepoints, as well as increase the reach of the PRC’s military while limiting the ability of the U.S. and others to operate freely.

  • In Southeast Asia, the countries with the largest concentration of BRI investment are Indonesia, Cambodia and Vietnam.
  • The PRC counts 11 nations in East Asia as Belt and Road participants, not including participants among Pacific states.
  • PRC investments in dual-use ports, rail lines, and other infrastructure in mainland Southeast Asia bring the ability to circumvent maritime choke points and increase military power projection.


China’s Foreign Investment in East Asia:

East Asia is at the heart of the PRC’s Belt and Road Initiative (BRI). Though the PRC presents the BRI as both a form of foreign assistance and a for-profit undertaking, numerous projects in East Asia are clearly motivated by PRC strategic and military goals.

Laos: Kunming-Vientiane Railway

  • The CCP’s railway line to Laos, a 414km (257 mile) link between Yunnan’s provincial capital of Kunming and the Laotian capital Vientiane is a key part of a larger planned rail network stretching throughout mainland Southeast Asia to Singapore.

  • CCP entities hold 70% equity in the railway project while Lao entities hold 30% of this $6 billion project. Laos’ financing commitments include $250 million from the annual Lao People’s Democratic Republic (PDR) budget and a $465 million concessional loan from China EXIM Bank. Analysts note that the Lao PDR government may also incur some $300 million in liabilities from resettlement claims from displaced Lao citizens.

  • Laos currently faces a major economic crisis spurred on by unsustainable PRC lending. Laos’ total public debt to the PRC has been reported at $12.2 billion, while its GDP in 2021 was $18.8 billion.

  • Laos’ credit rating was downgraded in June 2022 and the nation currently faces major inflation and an extreme shortage of foreign currency, leaving Laos with no way of servicing its debts. It is highly likely that Laos will be forced to enter one-sided negotiations with the PRC to restructure its debts.

Myanmar: Deep-sea, dual-use Kyaukypu Port 

  • PRC state-owned firms had originally reached agreements with Myanmar to construct a $7.3 billion deep-water port at Kyaukpyu along the coast of the Bay of Bengal. However, due to debt-trap concerns, the National League for Democracy-led government renegotiated the port’s consortium-government share-holding ratio down from 85:15 to 70:30, while shaving the project’s total cost to $1.3 billion.
  • Even after renegotiation, a PRC state-owned conglomerate has a 70% stake in the port project and has the rights to operate it for 50 years. 
  • The port is the keystone of the “China-Myanmar Economic Corridor,” (CMEC) a plan to connect the PRC’s Yunnan Province directly to the Bay of Bengal and the Indian Ocean, reducing the PRC’s dependence on the Strait of Malacca, where 80% of the PRC’s energy imports transit. CMEC is perceived as security threat by India, which has a nuclear submarine facility opposite Kyaukpu port. 
  • The port is already connected overland to China by a dual-strand oil and gas pipeline that became operational in 2017. The Kyaukpu port will also be adjacent to an industrial zone constructed by Chinese state-owned CITIC Group Corporation under a 51–49 partnership with Myanmar’s government.
  • The full price tag of CMEC is unknown, but Myanmar has approved $21 billion in PRC investment by March 2020- a major threat to Myanmar’s sovereignty.

Cambodia: Ream Naval Base 

  • The PRC is building its second overseas military base in Cambodia, as part of its ambitions to “become so powerful that the [Indo-Pacific] region will give in to China’s leadership rather than face the consequences,” according to a Western official.

  • In 2019, the PRC and Cambodia signed an agreement that gives the PRC exclusive rights to part of a Cambodian naval installation on the Gulf of Thailand. 

  • This agreement would allow the PRC to use the base for 30 years, with automatic renewals every 10 years after that. The PRC would be able to post military personnel, store weapons and berth warships. The facilities, if managed by the PRC, could support visiting ships and aircraft of the People’s Liberation Army Navy engaged in operations in the South China Sea.

  • Foreign military bases are prohibited under Cambodia’s constitution, and neither the PRC nor the Cambodian government acknowledge the existence of the base – although PRC military personnel are already present.

  • Some 70 km (40 miles) northwest of Ream, a PRC company is building a runway at the Dara Sakor resort that is capable of taking some of the world’s biggest planes to serve what for now consists of a rundown casino and a golf course.

  • In late 2020, the Cambodian government demolished a U.S.-built facility at Ream Naval Base – the second U.S.-built facility destroyed to make way for PRC military construction.

  • In June 2022, construction accelerated on PRC military facilities at Ream, including a pier and substantial site preparation work for further construction.


China’s Investment in East Asia’s Energy Sector:

Even as the PRC claims to cut politically sensitive air pollution at home, the country has been investing massively in coal projects outside its shores, notably in places linked to the Belt and Road Initiative.

  • Bangladesh has the most proposed coal-fired capacity and funding from the PRC, totaling over $7 billion for 14GW of capacity, followed by Vietnam and Indonesia.
  • In Vietnam — a country highly dependent on coal — the PRC is a major investor in the energy sector. The PRC is involved in 15 coal power plants in operation, six under construction and at least two in the planning stages.
  • In some cases including in Cambodia, older and dirtier coal plants from the PRC are simply disassembled, exported, and re-built in developing countries.

During the past two decades, PRC companies have invested heavily in ASEAN’s energy sector, including oil and gas pipelines, power generation and transmission in countries such as Myanmar, Laos, Indonesia, Vietnam, Cambodia, and Malaysia. 

  • This investment pre-dates the BRI. In 2009, the FDI in ASEAN’s energy sector already was about $3.5 billion. In 2015, after BRI was proposed, the investment only increased, hitting a level of more than $6 billion.
  • Beijing often targets a country’s lack of finance and market capabilities when investing in the energy-abundant East Asia region. For example: PRC firms invest in the majority of hydro power projects in Laos, Cambodia and Myanmar – countries which would be unable to finance their own energy infrastructure without foreign assistance. 


China’s “Soft Power” Initiatives in East Asia:

As the PRC has become an economic powerhouse in East Asia, there has been unease among journalists, scholars, and policymakers within these countries who view the PRC’s growing assertiveness as a threat to their national sovereignty. To counter this, the PRC has invested heavily in “soft power” initiatives in an attempt to re-shape the narrative. 

Between 2000 and 2016, the PRC entertained more visiting dignitaries and elites each year than any other East Asia Pacific (EAP) country, while its own leaders traveled to regional countries regularly. 

  • Beijing has made use of its senior leaders and diplomats as information ambassadors to promote a positive media narrative about the PRC through giving interviews or placing op-eds with EAP news outlets, particularly in democratic countries in the region. 

Other public diplomacy tools include Confucius Institutes, sister cities and exchange programs.

  • The advanced economies (e.g., Japan, South Korea, and Australia) attracted the highest volume and most diverse set of PRC public diplomacy activities: they received a disproportionate share of PRC sister cities partnerships, Confucius Institutes, and official visits.
  • The populous and fast-growing economies of Southeast Asia (e.g., Indonesia, Cambodia, and Malaysia) received the second highest volume of PRC public diplomacy, primarily driven by financial diplomacy. 

Between 2002-2017, Beijing arranged 82 press trips for EAP journalists to visit the PRC. Many of these press trips (41 percent) targeted journalists from EAP democracies such as South Korea, Japan, Indonesia, and the Philippines. 

  • The PRC attempts to promote its narratives in EAP countries through content-sharing partnerships, journalist exchanges, guest op-eds, and interviews. Between 2000 and 2017, PRC media outlets brokered 73 known partnerships with counterparts in EAP countries. Beijing partners with a wide range of EAP media, which reprint or share content from PRC state-run newspapers.


*Last Updated: 10/25/2022