A Power-Hungry Southeast Asia Wants China’s Energy - Foreign Policy
Published February 21, 2026
A Power-Hungry Southeast Asia Wants China’s Energy
Southeast Asia is experiencing a surge in energy demand, driven by rapid economic growth, urbanization, and population increases. The region, which includes countries such as Indonesia, Vietnam, Thailand, and the Philippines, is facing a significant challenge in meeting its energy needs. As a result, many Southeast Asian nations are turning to China for energy solutions, particularly in the form of investments and infrastructure development.
The Association of Southeast Asian Nations (ASEAN) has set ambitious energy targets, aiming to increase the share of renewable energy in the region's energy mix. However, the transition to renewables is still in its early stages, and fossil fuels continue to dominate the energy landscape. In 2020, fossil fuels accounted for approximately 80% of the total primary energy consumption in Southeast Asia, with coal, oil, and natural gas being the primary sources.
China, as the world's largest energy producer and consumer, has positioned itself as a key player in addressing the energy needs of Southeast Asia. The Belt and Road Initiative (BRI), launched by China in 2013, has facilitated significant investments in energy infrastructure across the region. This initiative aims to enhance connectivity and cooperation between China and countries along the Belt and Road, which includes many Southeast Asian nations.
Chinese investments in Southeast Asia's energy sector have been substantial. According to a report by the International Energy Agency (IEA), China invested over $30 billion in energy projects in Southeast Asia between 2013 and 2020. These investments have primarily focused on coal-fired power plants, hydropower projects, and renewable energy installations.
Vietnam, for example, has emerged as a focal point for Chinese energy investments. The country is experiencing rapid economic growth, resulting in a surge in electricity demand. To meet this demand, Vietnam has turned to China for assistance, with several Chinese companies involved in the construction of coal-fired power plants and renewable energy projects. The Vietnamese government has set a target to increase the share of renewables in the energy mix to 20% by 2030, but the reliance on coal remains a significant challenge.
Indonesia is another country where Chinese energy investments are making a significant impact. The Indonesian government has been actively seeking foreign investment to develop its energy sector, and China has responded with substantial funding for coal and renewable energy projects. The construction of the Java 9 and 10 coal-fired power plants, financed by Chinese companies, has raised concerns about the environmental implications of continued reliance on fossil fuels.
Thailand, too, is exploring partnerships with China to enhance its energy infrastructure. The Thai government has set ambitious renewable energy targets, aiming for 30% of its energy needs to come from renewables by 2036. Chinese investments in solar and wind energy projects have been instrumental in helping Thailand achieve these goals. However, the country still grapples with a significant portion of its energy coming from natural gas and coal.
While the influx of Chinese investments in Southeast Asia's energy sector has the potential to address immediate energy needs, it also raises concerns about dependency on China. Many Southeast Asian nations are wary of becoming overly reliant on Chinese funding and expertise, particularly in light of the geopolitical tensions in the region. This concern is compounded by the fact that many of the energy projects financed by China are often tied to the use of Chinese technology and equipment, which can limit local participation and development.
Moreover, the environmental implications of continued investment in fossil fuel projects are a significant concern. As the world moves toward a low-carbon future, the reliance on coal and other fossil fuels could hinder the progress of Southeast Asian countries in achieving their climate goals. The region is particularly vulnerable to the impacts of climate change, with rising sea levels and increasing frequency of extreme weather events posing significant risks to its populations and economies.
In response to these challenges, some Southeast Asian nations are actively seeking to diversify their energy sources and reduce their dependence on fossil fuels. The Philippines, for example, has set a target to increase the share of renewables in its energy mix to 35% by 2030. The government has been promoting investments in solar, wind, and geothermal energy projects to achieve this goal. Additionally, the Philippines has been exploring partnerships with countries beyond China, including Japan and the United States, to enhance its energy security.
As Southeast Asia navigates its energy transition, regional cooperation will be essential. ASEAN has established the ASEAN Plan of Action for Energy Cooperation (APAEC), which aims to promote sustainable energy development and enhance energy security in the region. The APAEC outlines strategies for increasing renewable energy deployment, improving energy efficiency, and promoting energy connectivity among member states.
In conclusion, Southeast Asia's energy landscape is undergoing significant changes as the region grapples with rising energy demands and the need for sustainable solutions. China's role as a key player in the region's energy sector is undeniable, with substantial investments and infrastructure development. However, the challenges of dependency on Chinese funding, environmental sustainability, and the need for regional cooperation remain critical considerations as Southeast Asian nations strive to meet their energy needs while transitioning to a more sustainable energy future.
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