China leverages economic statecraft to expand regional influence

China is increasingly utilizing economic statecraft to expand its strategic influence in Asia, potentially impacting security partnerships such as the United States-South Korea alliance. Former U.S. Representative Chris Stewart warns that Beijing is targeting the economic vulnerabilities of American allies, using market access and supply chain control to erode diplomatic cohesion. This shift involves blending commerce with national security to build influence through bilateral agreements and commercial engagement.

Furthermore, analysts suggest China has mitigated its historical ‘Malacca Dilemma’—the vulnerability of its energy supplies to naval blockades in the Strait of Malacca. Through the development of overland pipelines, large oil stockpiles, and the Belt & Road Initiative, Beijing has reduced its susceptibility to maritime threats. Some experts argue that this shift in energy and economic security means a naval blockade might now disproportionately affect energy-dependent island economies like Japan, Taiwan, and the Philippines rather than China itself.