Annabelle Liang
Business reporter, Singapore

Chinese President Xi Jinping starts a tour of South East Asia today as both his country and the region are in US President Trump’s tariffs spotlight.

His trip will take in Vietnam, Malaysia and Cambodia – key economic partners of China’s.

The three countries, which rely heavily on China for trade, were facing taxes of 24% to 49% on imports to the US, before a 90-day pause was announced last week.

With China being hit by mammoth 145% tariffs, Xi is looking to shore up ties with South East Asia, which Beijing has “very strong links [to] in terms of both trade and foreign direct investment,” says Lavanya Venkateswaran, a senior economist at OCBC bank.

“In the ongoing trade war, it just makes sense for China to place emphasis on countries it has a good relationship with and South East Asia falls among those,” she adds.

Alex Holmes from the Economist Intelligence Unit described Xi’s tour as a “popularity drive” that is “likely to include promises of greater aid and financing”.

“With China now facing 145% tariffs versus around 10% for the rest of Asia, the incentive for Chinese exports to divert through third countries will be stronger than ever,” he says.

But Venkateswaran expects that South East Asia will be “careful” going into talks with China, as there are fears of being increasingly targeted by the Trump administration.

As a result, she believes Xi’s visit may not result in concrete deals, although she sees “a path towards” greater cooperation, adding: “I think it’s just a tour that will establish relationships… and make sure that friends are friends.”