Can China Lead Asia?

Hasnain Iqbal

Islamabad: China’s pursuit of comprehensive leadership in Asia has intensified under President Xi Jinping, who envisions a regional order aligned with Beijing’s strategic and ideological preferences.

Through economic expansion, diplomatic outreach, military modernization, and multilateral engagement, China aims to consolidate its influence and present itself as the linchpin of a “multipolar” world order.

However, this quest faces structural economic limitations, demographic pressures, and persistent skepticism from regional powers that complicate Beijing’s path to dominance.

Since the early 2020s, Beijing has promoted itself as a champion of the Global South and a proponent of collective development.

Recent high-profile events, including the 2025 Shanghai Cooperation Organisation (SCO) summit in Tianjin and the Victory Day parade in Beijing, were designed to showcase China’s leadership credentials and its willingness to craft alternative frameworks to Western-led institutions.

These diplomatic platforms highlighted Southeast Asia’s centrality to China’s evolving regional agenda. Under Xi’s “Global Governance Initiative,” China has sought to build overlapping institutions that reinforce its leadership narrative and bind neighboring states into its orbit.

China’s economic engagement remains the cornerstone of its regional leadership drive. The Belt and Road Initiative (BRI) continues to serve as the principal mechanism through which Beijing deepens its economic reach.

In the first half of 2025 alone, Chinese firms secured contracts worth approximately $124 billion globally, with a strong focus on energy, mining, and high-tech manufacturing. Recent policy adjustments emphasize “fewer but larger” projects designed for long-term strategic gain rather than short-term visibility.

The conclusion of the China–ASEAN Free Trade Area 3.0 (CAFTA 3.0) in mid-2025 underscores China’s ambition to institutionalize its economic dominance in Southeast Asia, where bilateral trade has approached the $1 trillion mark annually. Xi’s 2025 visits to Vietnam, Malaysia, and Cambodia further cemented economic partnerships through new infrastructure and industrial agreements.

Collectively, these moves demonstrate Beijing’s aim to secure regional supply chains and embed economic dependency that could outlast its slowing domestic growth.

China’s diplomacy increasingly revolves around what it terms “true multilateralism,” an effort to reframe global governance around development and cooperation rather than security confrontation.

At the ASEAN–China–GCC Summit in May 2025, Premier Li Qiang emphasized openness and resistance to unilateral trade measures. China’s narrative portrays Western-led institutions as exclusionary, thus legitimizing Beijing’s establishment of alternative mechanisms, including expanded SCO initiatives and Global South research centers.

These diplomatic efforts have found a receptive audience in parts of Asia. Many ASEAN leaders, while cautious, have publicly endorsed aspects of China’s development agenda, attracted by its financing and trade opportunities.

However, the region’s engagement with China remains pragmatic rather than ideological. Southeast Asian states continue to balance Beijing’s economic appeal against concerns about sovereignty and autonomy.

China’s pursuit of regional leadership is reinforced by a more assertive military posture. The People’s Liberation Army (PLA) has expanded naval operations and intensified activities in contested maritime zones.

The August 2025 standoff at the Second Thomas Shoal, involving Chinese coast guard and militia vessels, illustrated Beijing’s readiness to assert control through coercive measures.

Simultaneously, China’s defense modernization—epitomized by its naval expansion and the public display of advanced missiles and drones—signals its aspiration to achieve “world-class” military status.

However, analysts note persistent internal weaknesses, including limited combat experience, bureaucratic inefficiencies, and corruption within the PLA’s command structure. Beijing’s strategy appears dual: assertive externally to solidify territorial claims, and demonstrative internally to project deterrence and national strength.

China’s bilateral relations across Asia reveal a complex interplay of competition and cooperation. With India, strategic rivalry remains entrenched despite periodic diplomatic overtures.

While both nations advocate for a multipolar Asia and cooperate in forums like BRICS and the Asian Infrastructure Investment Bank (AIIB), India has refrained from joining China’s flagship initiatives such as the BRI and RCEP. The result is a competitive coexistence in South Asia and the Indian Ocean.

Relations with Japan have cautiously thawed since 2024, as both sides reopened high-level security dialogues. Yet mutual distrust persists, driven by maritime disputes and Tokyo’s perception of China as its principal strategic threat.

Japan’s recent defense buildup, including enhanced missile capabilities and fortified island defenses, underscores a sustained deterrence approach even as economic ties remain substantial.

In Southeast Asia, China’s engagement is met with mixed responses. States such as Cambodia and Laos have fully aligned with Beijing’s economic agenda, while Vietnam, Malaysia, and the Philippines continue to resist Chinese maritime encroachments.

China’s diplomatic finesse lies in aligning its initiatives with ASEAN’s development priorities while sidestepping divisive security issues. Nevertheless, most ASEAN members continue to hedge, maintaining security partnerships with the U.S. and Japan to offset overreliance on China.

China’s external ambitions are increasingly constrained by internal challenges. Economic growth has slowed to around 4–5 percent, sustained largely through export surpluses and state-driven investment.

Structural issues—ranging from deflationary pressures and excessive debt (now near 100 percent of GDP) to weak consumer demand—threaten the sustainability of Beijing’s outward spending. The demographic crisis compounds these vulnerabilities: the shrinking labor force, a legacy of the one-child policy, is projected to cut annual GDP growth by more than one percentage point by 2035.

These trends limit China’s ability to finance large-scale foreign projects without risking domestic discontent.

China’s expanding influence has provoked both caution and counteraction. The United States and its allies have strengthened Indo-Pacific coordination through initiatives like the Quad and AUKUS, though inconsistent US trade and defense policies have raised doubts among partners. Meanwhile, regional states continue to hedge—welcoming Chinese investment while maintaining defense ties with Washington, Tokyo, and New Delhi.

This balancing act reflects widespread unease about China’s long-term intentions. While many Asian leaders participate in Beijing-led summits, few are willing to endorse a China-centric order.

Instead, they seek to extract economic benefits without compromising strategic autonomy. The resulting equilibrium is one of engagement without alignment—a regional environment where China’s dominance is visible but far from uncontested.

By late 2025, China’s footprint across Asia is unmistakably deepened through infrastructure projects, trade agreements, and multilateral outreach.

Yet the paradox of its rise persists: while its economic and diplomatic networks continue to expand, internal economic strains and regional resistance constrain its bid for uncontested leadership. India’s strategic independence, Japan’s rearmament, and ASEAN’s cautious hedging exemplify a broader regional pattern that complicates Beijing’s ambitions.

Thus, China’s quest for Asian primacy remains a work in progress—impressive in scope, but vulnerable in execution.

Its comprehensive approach has redefined Asia’s geopolitical landscape, but the balance of power continues to evolve, shaped by competing visions, enduring mistrust, and the region’s determination to preserve autonomy in an increasingly China-centric order.

Hasnain Iqbal is an MPhil scholar in Defence and Strategic Studies at Quaid-i-Azam University, Islamabad. He has previously served at the IRS. His research interests include regional politics, China’s foreign policy, and strategic dynamics in Asia.

The article is the writer’s opinion, it may or may not adhere to the organization’s editorial policy.

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