China in the Indo-Pacific: January 2025

South China Sea Spy Ring: The Philippines’ National Bureau of Investigation (NBI) announced it had taken six Chinese nationals into custody over the month, saying that together they were part of a suspected espionage network. First, a Chinese software engineer and two Philippine nationals were arrested for surveilling police and military facilities, including sites where U.S. forces were based. The Chinese national had been based in the Philippines for at least five years. Then, five other Chinese suspects were arrested for conducting surveillance on a Philippine Coast Guard ship near the Spratly Islands in the South China Sea. Posing as Taiwanese tourists, the men flew drones and installed high-resolution cameras at a Palawan resort to record activities at Philippine air and naval bases. The director of the NBI suggested the surveillance system enabled China to anticipate when the Philippines would attempt to resupply the grounded BRP Sierra Madre vessel, which has become a consistent site of confrontation between the Philippines and China. The chief of the Philippines’ armed forces suggested the country’s resupply missions have been compromised since early 2023. 

As maritime tensions escalated, the Chinese Coast Guard harassed a scientific marine survey. The Philippine Coast Guard accused China of inhibiting the recovery of a deceased fisherman. 

Malaysia as ASEAN Chair: Meanwhile, as Malaysia assumes the chairmanship of the Association of Southeast Asian Nations (ASEAN) this year, Prime Minister Anwar Ibrahim, has continued to soften his stance toward China. At the World Economic Forum in Davos, Switzerland, Anwar called on his fellow ASEAN member states not to “single out” China over territorial disputes in the South China Sea. He claimed that despite Malaysia’s overlapping claims with China, Kuala Lumpur does not “go to war” or “threaten.” Additionally, Anwar met with General Liu Zhenli, the chief of staff in China’s Central Military Commission, and discussed the potential for ASEAN to host an inaugural summit with China and the Gulf Cooperation Council, which consists of  Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. 

Cyber Scams and Cease-Fires: To ingratiate itself with China, Myanmar’s junta, along with officials from Cambodia, Laos, and Vietnam, signed an agreement to crack down on scam centers in the region. Myanmar has become a hub for transnational crime, including internet and telecommunications scam centers that have proliferated across Southeast Asia since the COVID-19 pandemic. Beijing has exerted pressure on the junta to shut down scam centers, as criminal syndicates often traffic Chinese nationals to conduct the scams and target Chinese victims in cryptocurrency schemes. A prominent case involving Chinese actor Wang Xing drew attention to the issue; he was discovered after being trafficked across the Thailand-Myanmar border while visiting the region. 

On January 20, China announced it had negotiated a formal cease-fire agreement between Myanmar’s military junta and the Myanmar National Democratic Alliance Army (MNDAA) in Kunming. The MNDAA is one of the main rebel groups fighting for territory in northern Shan State, which borders China. China has been pressuring the MNDAA and its Three Brotherhood Coalition partners to stop fighting after the group captured the strategic town of Lashio, including the military’s northeastern command, in August 2024.  

Underscoring the importance China places on stabilizing Myanmar, an official Chinese delegation from Yunnan attended the MNDAA’s Lunar New Year celebration in northern Shan State later in the month. But the visit came with a message from Beijing: withdraw from Lashio after the new year festivities end. Jason Tower, an expert on Myanmar from the United States Institute of Peace, has suggested China’s primary goals in Myanmar are to undermine the resistance forces, secure Beijing’s economic investments in the country, nudge regional actors like ASEAN to normalize relations with the junta, and stabilize military rule by promoting national elections. 

Xi-To Lam Call: Chinese President Xi Jinping discussed stabilizing industrial supply chains with To Lam, the head of the Vietnamese Communist Party, in a phone call on January 15. The two leaders also agreed to “promote the socialist cause.” 

Thailand’s Train Project: A Thai spokesperson announced that the first phase of the China-Thailand Railway is 36 percent complete, and the complete train line is expected to begin operating in 2030. The long-delayed, high-speed rail network will connect Thailand to China via Laos. Although identified as a part of China’s Belt and Road Initiative in 2017, Thailand is wholly responsible for the project’s costs. 

BYD in Indonesia: China’s top electric vehicle maker, BYD, announced it was on track to complete a $1 billion plant in West Java by the end of this year. The factory is expected to produce 150,000 vehicles annually. BYD began exporting to Indonesia in 2024 and already commands 36 percent of the country’s battery-based electric vehicle market. China has heavily invested in Indonesia’s critical minerals industry, which provides components for electric vehicles and batteries.