China in the Indo-Pacific: September 2025

China Pushes Maritime Claims Against the Philippines: Tensions in the South China Sea escalated as China continued to pressure Philippine outposts and challenge the Philippines’ growing coordination with external partners. On September 4, Chinese navy vessels conducted in the disputed waterway, claiming that a recent joint exercise between the Philippines and several Western navies undermined regional peace. On September 10, Beijing announced plans for a 3,500-hectare (8,649-acre) nature reserve around Scarborough Shoal, prompting diplomatic protests from Manila and Washington. The move followed a Philippine resupply mission to the grounded BRP Sierra Madre vessel at Second Thomas Shoal, after the Philippines postponed a similar mission in August due to increased Chinese naval deployments.

China continued its warnings to the Philippines on September 14, demanding that Manila halt “provocations” and cease inviting “external forces” into the disputed waterway. The warning referenced U.S.-Japanese-Philippine exercises conducted days earlier. On September 16, tensions escalated into physical clashes, as two China Coast Guard vessels fired water cannons at a Philippine fishing ship near the shoal, causing significant damage and injuring a crew member. A nearby Chinese navy ship also broadcast “live-fire exercises” on the radio, alarming Filipino fishermen. The Chinese navy justified its actions by claiming a Philippine ship purposely hit a Chinese vessel around the Scarborough Shoal, an accusation that the Philippines denied. Two days later, Philippine National Security Adviser Eduardo Año vowed his country would maintain its presence in the disputed area despite the confrontations.

China Deepens Security Cooperation With Myanmar: China sustained intensive security engagement with Myanmar as the military junta increased its operations across various states. On September 16, Chinese Minister of Public Security Wang Xiaohong hosted Myanmar Home Affairs Minister Tun Tun Naung, who chaired the eighth China-Myanmar ministerial meeting on security cooperation in Beijing. Both sides pledged to cooperate to boost safety for Chinese personnel and projects inside Myanmar, carry out joint law-enforcement training exercises, and combat transnational crimes, including telecom fraud and narcotics trafficking.

The bilateral meeting occurred amid a month-long uptick in junta visits to China. The military’s defense minister, home affairs minister, and navy chief each traveled to Beijing in mid-September to strengthen military coordination, including in drone and electronic warfare systems, arms manufacturing, and maritime collaboration. Meanwhile, according to a September 10 report, Chinese firm Geedge Networks is providing software, hardware, and training to Myanmar’s military, enabling real-time surveillance of more than thirty-three million internet users. Rights groups argue that those tools facilitate arbitrary persecution by allowing the junta to identify dissidents, though Beijing denies complicity.

Malaysia-China Economic Ties: On September 2, Malaysian Prime Minister Anwar Ibrahim announced that Chinese leader Xi Jinping supported expediting Malaysia’s bid for full membership in BRICS, a group of emerging economies that aims to challenge Western-led global institutions. That day, Malaysian officials also revealed that China was willing to share rare-earth processing capabilities, although only through partnerships with Malaysian state-linked firms to protect proprietary technology. The agreement is part of Malaysia’s broader efforts to position itself as a rare-earth processing hub.

In addition to rare-earth cooperation, Malaysian automaker Proton, backed by China’s Geely through financial investments, opened the country’s first electric-vehicle assembly plant in Tanjung Malim on September 4, aiming to build twenty thousand cars a year and eventually scale up to forty-five thousand. Ibrahim said the facility showed the strength of Malaysia-China cooperation and encouraged Geely to establish a training and education center at the site.

In the aviation sector, the parent company of AirAsia, a private Malaysian airline, suggested it is in active negotiations to buy an unspecified number of China’s C919 passenger jet, which would make the airline the first overseas customer for Commercial Aircraft Corporation of China’s C919. Malaysian Transport Minister Anthony Loke urged the Chinese firm to market the aircraft more forcefully to foreign airlines while also promoting the planned Air Silk Road link between Kuala Lumpur, Malaysia, and Zhengzhou, China.

Last, bilateral ties expanded through smart-city cooperation. On September 15, Malaysia agreed to collaborate on smart-city pilot projects in Ipoh and Seberang Perai, adopting Chinese digital infrastructure, energy-efficient systems, and artificial intelligence–based building management tools. Malaysian officials pointed to the City Brain platform of Hangzhou, China, as a model. Although framed as sustainability initiatives, those governance structures often depend on Chinese data frameworks, raising concerns about vendor lock-in and policy diffusion. China also signaled interest in supporting UN-Habitat, a program focused on pushing sustainable urban development, boosting the country's efforts to help shape global urban policy.

Financial Collaboration With Indonesia: On September 10, China and Indonesia expanded bilateral financial connections by launching a local currency-settlement framework covering all balance-of-payments transactions. Central bank governors simultaneously initiated trials for cross-border quick-response (QR) code connection, enabling retail payments in local currencies. Those initiatives reduce reliance on the U.S. dollar and complement Beijing’s broader push for yuan internationalization. Officials announced plans to continue deepening cooperation across payment systems and digital currency development.

Parallel trends reinforced China’s role in Indonesia’s energy transition. As Indonesia faces a slowdown in the U.S.-backed Just Energy Transition Partnership, which aims to facilitate a transition away from fossil fuels, Chinese firms are rapidly expanding exports of solar panels, electric vehicles, and battery components while maintaining various on-the-ground projects employing tens of thousands of Indonesian workers. Chinese companies have also invested heavily in Indonesian nickel mining, but captive coal-fired power plants supporting smelters have imposed local health and economic costs. Southeast Asian energy analysts have warned that deepening dependence on coal and liquefied natural gas agreements risks tying Indonesia closer to fossil fuel infrastructure even as global energy markets shift.

Meanwhile, Indonesia sought to renegotiate debt associated with Whoosh, Southeast Asia’s first high-speed railway. The China-backed project, costing $7.27 billion and largely financed by a loan from China Development Bank, has struggled with low ridership and large cost overruns, saddling state-owned railway operator PT Kereta Api Indonesia with tens of millions of dollars in losses. Jakarta is exploring restructuring options, including shifting infrastructure debt to the sovereign level, before extending the railway line.

Environmental Fallout From China-Linked Rare-Earth Mining: On September 17, environmental nongovernmental organizations warned that arsenic levels near the Kok River, flowing from Myanmar into Thailand, were as much as four times higher than World Health Organization limits. Most production occurs in conflict-affected Shan State, where China runs rare-earth extraction operations reportedly under armed protection from the United Wa State Army. As rebel groups maintain control over large parts of Myanmar’s mining regions, extraction proliferated in semiautonomous regions where neither the junta nor international monitors could intervene.

Environmental analysts have raised fears that arsenic and other toxic metals could reach Cambodia, Laos, and Vietnam, threatening drinking water and riverine fisheries that constitute key protein sources. Cambodia relies on the Mekong River for roughly 60 percent of its wild-caught fish consumption. Although local communities petitioned Thailand to install barriers blocking the outflow of toxic material, environmental groups suggest that such infrastructure cannot keep up with toxic runoff. Beijing’s refusal to restrict imports from unregulated mines contradicts its claims on leading “ecological civilization,” as many of those mines often violate Chinese environmental laws. Without region-wide monitoring, downstream states could face long-term agricultural and health consequences.

China Expands Diplomatic and Humanitarian Engagement With Afghanistan: China sustained low-profile contact with Taliban authorities. After an August 31 earthquake in Herat Province, China dispatched Y-20 transport aircraft carrying emergency tents, blankets, and other supplies, and announced approximately $6.9 million in humanitarian assistance. Meanwhile, on September 14, a delegation of Afghan border and migration officers met Chinese counterparts to discuss cooperation against drug trafficking, illegal crossings, and training for Afghan border personnel. China has long cited the presence of Uyghur militants, including members of the East Turkestan Islamic Movement (ETIM), as a major concern in Afghanistan’s northeast, as instability could spill over Chinese borders. The talks build on an earlier visit to Kabul from Chinese Foreign Minister Wang Yi on August 19, in which he likewise expressed concerns over ETIM militants.

At the UN Security Council, China subtly criticized the United States for refusing to issue travel exemptions for Taliban officials, claiming the refusal impedes Afghan integration into the international order. It also urged Western governments to consider mechanisms for limited access to Afghan central-bank assets and criticized the declining humanitarian funding. Chinese officials nonetheless raised the importance of stronger counterterrorism efforts as well as women’s access to education, employment, health services, and public participation, implicitly criticizing the Taliban government.

On September 26, on the sidelines of the UN General Assembly, China joined Iran, Pakistan, and Russia, in opposing any U.S. efforts to retake control of military bases in Afghanistan, also citing the geostrategic location of former U.S.-run facilities relative to Xinjiang. The four governments framed such a return as destabilizing, following remarks from U.S. President Donald Trump contemplating a U.S. takeover of Bagram Air Base. The Taliban government had already rebuffed the U.S. proposal.

Chinese Support for Sri Lanka: Sri Lanka announced the resumption of construction on the Colombo-Kandy Central Expressway after securing a $500 million concessional loan from the Export-Import Bank of China. The financing cited engineering, procurement, and construction costs for approximately thirty-eight kilometers (twenty-four miles) of roadway, one-third of which was previously completed before funding difficulties forced the project’s suspension. Colombo stated that it aims to complete the segment by April 2028.

In parallel, China defended Sri Lanka’s human-rights record during proceedings at the UN Human Rights Council, urging states to respect Colombo’s sovereign approach to accountability and oppose “politicization.” China praised recent reforms, including anticorruption initiatives and the establishment of an independent prosecutor’s office, and warned that external intervention would destabilize the Sri Lankan economy. Experts interpreted the diplomatic posture as a defense of the Sri Lankan government amid austerity measures linked to obligations from the International Monetary Fund.

Sri Lanka did not attend the Shanghai Cooperation Organization Summit or China’s World War II anniversary commemorations in early September, a decision that prompted criticism from former Sri Lankan officials who argued that summit attendance enables bilateral deals on climate finance, logistics, and fintech projects. Officials in Colombo offered conflicting explanations, ranging from schedule conflicts to the absence of an invitation, while some South Asia analysts emphasized Sri Lanka’s dependence on the U.S. export market as another potential cause.

Maldives Accelerates China Cooperation: On September 2, China and the Maldives signed eleven agreements covering infrastructure, renewable energy, agriculture and fisheries programs, construction, and education. Maldivian President Mohamed Muizzu positioned the agreements within the wider Maldives 2.0 digitalization agenda. The deals built on ongoing Chinese grant-financed plans, such as the China-Maldives Friendship Hospital.

Maldivian authorities also announced that debt-relief arrangements with China had been finalized on flexible, lasting terms that officials said would not intensify fiscal pressure. The Chinese ambassador to the Maldives, Kong Xianhua, suggested the arrangements reflect China’s confidence in Maldivian government reforms and economic progress. The Bank of Maldives also introduced yuan-denominated accounts to facilitate broader Chinese financial cooperation.

During bilateral meetings, the Maldives endorsed China’s recently unveiled Global Governance Initiative (GGI), reflecting language on sovereign equality and a “people-centered” approach to development. Maldivian leaders also cited GGI’s emphasis on tangible public benefits, such as reliable infrastructure and safe drinking water, as being aligned with domestic priorities. The endorsement followed strong Maldivian participation in China’s earlier Global Development and Global Security initiatives. Bangladesh also endorsed the GGI during a bilateral meeting that covered cooperation in various fields.

India Maintains Gradual Normalization Steps Following August Talks: On September 8, China seemed to back India in its tariff challenges with the United States, with Chinese Ambassador to India Xu Feihong depicting the recent 50 percent U.S. tariff on Indian goods, placed in response to India’s continued consumption of Russian oil, as “unfair and unreasonable.” Analysts had suggested that the U.S. tariffs would create space for China to present itself as an alternative economic partner for India. Earlier, Xu had called for “big business, big investment, and big commitment” between China and India and cited Indian Prime Minister Narendra Modi’s public claim that China-India cooperation would make the twenty-first century “a genuine Asian century.” Still, Indian Finance Minister Nirmala Sitharaman suggested that further bilateral talks were necessary to achieve tangible changes.

In an interview with a news outlet, Indian Commerce Minister Piyush Goyal encapsulated September’s China-India thaw, suggesting relations were improving to reach “pre-Galwan levels,” referring to the deadly June 2020 skirmishes between Chinese and Indian troops in the Ladakh region in the Himalayas. Notably, tensions accelerated in that region during late September, as protesters angry with intrusion from the Indian central government clashed with security forces, leading to multiple casualties.

New Chinese-Pakistani Agreements: Chinese counterterrorism concerns were central during a ten-day visit by Pakistani President Asif Ali Zardari to China from September 12 to 21, reflecting militants’ targeting of Chinese works associated with the China-Pakistan Economic Corridor. Pakistani officials reiterated commitments to expand counterterrorism cooperation with China to address that challenge, while also signing numerous memoranda of understanding covering ties in agriculture, manufacturing, and technology.

Zardani’s visit followed Pakistani Prime Minister Shehbaz Sharif’s attendance at the Shanghai Cooperation Organization summit in late August, where China and Pakistan signed approximately $8.5 billion worth of deals across various sectors, including $7 billion in memoranda of understanding and $1.5 billion in joint ventures. In conjunction with those deals, Pakistani officials called for increased cooperation in biomedicine, pharmaceuticals, and finance in China’s Tianjin municipality, following a meeting between Sharif and the regional Communist Party secretary, Lian Maojun. Pakistani delegations also toured Tianjin’s ports, which they view as models for Pakistan’s own ports.