"China's growing use of 'soft power' in Southeast Asia-non-military inducements including culture, diplomacy, foreign aid, trade, and investment-has presented new challenges to U.S. foreign policy. By downplaying many conflicting interests and working collaboratively with countries and regional organizations on such issues as territorial disputes and trade, Beijing has largely allayed Southeast Asian concerns that China poses a military or economic threat. China's diplomatic engagement, compared to the perceived waning or limited attention by the United States, has earned the country greater respect in the region. Its rise as a major foreign aid provider and market for Southeast Asian goods has also enhanced its relations with Southeast Asian states. Many analysts contend that China's growing influence may come at the expense of U.S. power and influence in the region. This report provides evidence and analysis of China's soft power in Southeast Asia. It does not discuss the considerable U.S. military presence in the region. The report describes China's evolving diplomacy and more active role in regional organizations such as the Association of Southeast Asian Nations (ASEAN). Although China's foreign aid to Southeast Asia, as in other regions, is difficult to quantify and includes a broader range of economic assistance than official development assistance (ODA) offered by major industrialized nations, it is believed to be relatively large. China is considered to be the 'primary economic patron' of the small but strategically important nations of Burma, Cambodia, and Laos, and also provides considerable economic aid to Indonesia and the Philippines."
CRS Report for Congress, RL34310