As aid from the United States and other Western countries dwindles and global trade tensions rise, Southeast Asia’s urgent need for green energy is finding a ready banker and builder in China. Experts caution that this shift is reshaping the region’s economic and strategic landscape at the expense of the United States and other Western nations’ influence.
In Southeast Asia, nations from Vietnam to the Philippines face a stark paradox: They hold vast potential for renewable energy from solar, wind, and geothermal power, yet their emissions are soaring as populations grow and industries expand, and reliance on fossil fuels continues. Many of these nations, despite contributing only about 5% of the world’s total emissions, are also on the front lines of climate change, battered by severe typhoons, droughts, and flooding.
But as the U.S.’s support for the energy transition wanes, countries are forced to pivot to financing from other countries.
A Vacuum in Development Finance
“The center of gravity in Southeast Asia’s development finance landscape is drifting towards Asian donors,” a recent report from Australia’s Lowy Institute concluded. “Development finance in Southeast Asia will be increasingly shaped by Tokyo, Seoul, and Beijing, leaving Brussels and Washington with a diminished role.”
The U.S. pullback under the Trump administration has been sharp. While the Biden administration promoted initiatives like the Just Energy Transition Partnerships in Indonesia and Vietnam, which only offered a fraction of the funding needed, mostly as loans rather than grants, as a way to shift economies away from coal, the Trump administration cancelled billions of dollars in funding, including to the Green Climate Fund.
Subsequent dismantling of the United States Agency for International Development removed another key source of technical assistance that once helped Southeast Asian nations draft renewable energy auction rules, plan grid integration, and conduct feasibility studies for regional power connections.
Other programs, like the Asia EDGE initiative, a U.S. government program to strengthen energy security and expand sustainable energy markets in the Indo-Pacific, were steered toward promoting U.S. fossil fuel exports, such as liquefied natural gas.
Beijing’s Checkbook and Technology
China has stepped into the funding and support vacuum with a sizable checkbook and technology in hand. According to the Lowy Institute, China is now the largest single source of international renewable energy finance for Southeast Asia. Once primarily focused on coal and dams under its Belt and Road Initiative, China is now leveraging its global dominance in solar panels, wind turbines, electric vehicles, and batteries.
Data from Australia’s Griffith University shows the scale: In the first half of 2025 alone, Belt and Road green energy engagement hit $9.7 billion across wind, solar, and waste-to-energy projects, adding an estimated 11.9 gigawatts of capacity.
“China continues to invest in the green energy sector, mainly as a provider of technology in spaces like solar, EV, and batteries, both in installation and manufacturing,” said Putra Adhiguna, managing director of Energy Shift Institute, an Asia-focused energy finance thinktank. “As the global leader in this tech, it’s growing.”
Chinese officials frame this as a “win-win” for both China and the countries with which it engages financially.
“China’s green production capacity not only diversifies China’s own energy supply but also offers Global South countries great opportunities to achieve low-carbon transition by leaps and bounds,” said Foreign Ministry Spokesperson Guo Jiakun.
The Strategic Cost of Green Dependence
For Southeast Asian leaders facing immediate energy needs and pressure to act on climate, China’s model is attractive: packaged deals that bring financing, technology, equipment, and workers, often with quicker timelines than projects backed by other countries.
Yet analysts warn that this expanding role carries risks, as reliance on Chinese technology, loans, and operational control over power infrastructure creates a pathway to long-term strategic dependencies.
For example, China Southern Power Grid, one of China’s two state-owned electricity transmission and distribution giants, owns and operates much of Laos’s national grid, while State Grid Corporation of China holds a key stake in the Philippines’ grid. Poorer nations like Cambodia and Myanmar, with few alternatives, are particularly vulnerable.
Wealthier nations like Indonesia, Malaysia, and Thailand navigate more opportunistically, accepting projects that align with national goals. Participation in China-backed trade pacts like the Regional Comprehensive Economic Partnership, a free trade agreement between 15 countries in the Asia-Pacific, has also smoothed the import of Chinese clean tech.
“Partner countries need to know what they want from China, and not just an open-door invite, as the latter, when not managed well, can result in lower spillover and integration to the wider industries and economies,” Adhiguna warned.
With inconsistent U.S. engagement, analysts say the region is making pragmatic choices. Some Southeast Asian nations have slowed renewable targets amid geopolitical uncertainty. Vietnam, once a solar power success story, has delayed wind power auctions and softened coal phase-out plans. Indonesia continues to prioritize coal-powered grid reliability and economic stability over decarbonization.
“I believe the classic problem will continue the push-and-pull in the region,” said Adhiguna, “but the current unpredictable position taken in DC will definitely have a lasting impact on how ASEAN sees the U.S. as a stable long-term partner.”
Naomi Srisuk is an independent journalist who covers the nexus of climate and the growing influence of China across the Asia-Pacific region.
