U.S.- China competition in the Asia-Pacific is not trending in Washington’s favor in the realm of economic statecraft. The United States’ withdrawal from the Trans-Pacific Partnership (TPP) in 2017 under President Donald Trump, an agreement that had constituted a central economic pillar of the Obama administration’s “pivot to Asia”, significantly constrained Washington’s ability to anchor its economy more deeply in the region. Although the agreement survived without U.S. participation and was reconstituted under Japanese leadership as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), entering into force at the end of 2018, it now operates largely absent American strategic direction.
By contrast, China has moved deliberately to align itself with emerging regional economic frameworks, effectively filling the vacuum created by the oscillation in U.S. policy, from engagement under Obama, to withdrawal under Trump, and to a more cautious continuity under President Joe Biden. Nowhere is this dynamic more evident than in Southeast Asia, particularly in China’s expanding economic engagement with the Association of Southeast Asian Nations (ASEAN). Whereas the United States maintains a free trade agreement with only one ASEAN member, Singapore, China has benefited from over a decade of preferential trade relations through the ASEAN-China Free Trade Agreement (CAFTA), in force since 2010.
The results are reflected in the data. By 2015, ASEAN’s trade with China had reached $346.5 billion, accounting for 15.2 percent of the bloc’s total trade; by 2020, bilateral trade in goods had surged to $684.6 billion. Over the same period, U.S.-ASEAN trade grew more modestly, from $177 billion to $227 billion. China’s participation in the Regional Comprehensive Economic Partnership (RCEP), which entered into force on January 1, 2022, will further consolidate its economic integration with ASEAN. Notably, RCEP also constitutes, in effect, a network of free trade arrangements between China and four U.S. allies: Australia, Japan, New Zealand, and South Korea.
For Washington, the implications are significant. China’s deepening role in Asia’s evolving economic architecture will not only intensify interdependence between regional economies and the People’s Republic, at a time when concerns over supply chain vulnerabilities and selective decoupling are gaining traction, but will also position Beijing as a central actor in shaping the rules of the regional order. Given the scale of its market and its economic leverage, China is well placed to influence the development of frameworks that serve its interests, potentially to Washington’s detriment.
Beijing’s ambitions are already evident. China formally applied to join the CPTPP in September 2021 and, the following month, requested accession to the Digital Economy Partnership Agreement (DEPA), alongside Singapore, New Zealand, and Chile. These moves underscore China’s intent to play a leading role not only in traditional trade but also in setting the standards for digital commerce. South Korea has likewise expressed interest in joining DEPA.
U.S. allies such as Japan and Australia, however, cannot indefinitely resist China’s participation in these frameworks, particularly in the absence of a clear signal that the United States intends to reengage economically in the region. It will become increasingly difficult for Tokyo and Canberra to insist that Beijing fully meet CPTPP standards on market access, intellectual property, and labor and environmental protections prior to accession, especially when existing members such as Vietnam have been granted transitional flexibility. Moreover, other member states, whose economic ties with China continue to deepen, may press for comparable accommodations.
To alter this trajectory, the Biden administration should begin by supporting the accession of key partners, including the Philippines, Thailand, the United Kingdom, South Korea, and Indonesia, all of which have expressed interest in joining the CPTPP. This should be followed by a credible pathway for U.S. re-entry into the agreement. Such steps would signal that Washington views the Asia-Pacific not merely as a theater of strategic competition with China, but as a region where sustained economic engagement is essential to long-term influence.
