The United States’ move to ban Chinese technology from undersea communications cables is an important moment in global tech governance with potentially significant implications for Southeast Asia. The Federal Communications Commission (FCC) announced on July 16 its intention to bar companies from connecting submarine cables to the United States if any Chinese technology or equipment is involved, marking another significant escalation in China-U.S. technological competition. The rules will apply to companies on the FCC’s existing list of entities that pose “an unacceptable risk to the national security of the United States,” including Huawei, China Telecom, and China Mobile.
This development complicates the strategic balancing act that Southeast Asian countries must navigate, as they work to preserve their autonomy while managing competing pressures from both Washington’s “clean network” initiatives and Beijing’s digital ecosystem investments.
The Strategic Context and Security Rationale
Undersea cables carry approximately 99 percent of all international internet traffic, making them the backbone of the global digital economy. For Southeast Asia, these cables are particularly vital in supporting the region’s ambitious goal of becoming a central digital hub and its projected digital economy growth to $1 trillion by 2030.
Recent incidents have made security concerns increasingly urgent. The cutting of critical fiber cables in the Baltic Sea in late 2024 prompted sabotage investigations. Prior to that, in 2023, Taiwan accused Chinese vessels of severing its internet connections to the Matsu Islands in what was widely viewed as an exercise in gray zone coercion – the use of tactics below the threshold of armed conflict to achieve strategic objectives. Furthermore, earlier this year, China unveiled a new deep-sea cable-cutting device that could disrupt critical infrastructure and “shake up global maritime power dynamics.”
While the sector has always been vulnerable to both accidental damage from shipping and fishing activities, these incidents and the rise of China-U.S. technological competition have led to the securitization of undersea cables. Policy discourse has shifted from focusing primarily on commercial interests and accidental damage to addressing concerns about deliberate, state-backed interference and strategic competition.
Southeast Asia’s Strategic Balancing Act
Previous U.S. interventions, such as the successful pressure campaign to exclude Chinese contractor HMN Technologies from the SEA-ME-WE 6 project despite its competitive pricing, demonstrate Washington’s willingness to leverage diplomatic and economic pressure to achieve strategic objectives. The new ban will likely accelerate ongoing efforts to develop alternative routes that bypass geopolitically sensitive areas, particularly the South China Sea. Projects like Bifrost and Echo cables represent this trend toward route diversification and the practical emergence of bifurcated technological ecosystems.
On the other hand, rerouting undersea cables often leads to higher costs and increased risk of service disruptions due to longer distances and more complex pathways. It can also result in higher latencies that undermine performance. The abrupt cancellation of the Bay-to-Bay Express Cable System due to U.S. restrictions on Hong Kong exemplifies how geopolitical constraints can incur significant additional costs and waste resources. Strict supplier limitations can slow rollouts and raise costs, especially where domestic alternatives are limited and Western vendors command premium pricing. These constraints create operational risks in Southeast Asia, where redundancy and rapid repair capabilities are critical for maintaining connectivity.
However, rather than simply yielding to great power pressure or being constrained by it, Southeast Asian countries are demonstrating strategic agency through diversification and regulatory innovation. This approach reflects their recognition that maintaining autonomy requires active management of competing pressures.
Southeast Asian countries have pursued diversified supplier portfolios rather than aligning exclusively with either U.S. or Chinese technological ecosystems. Singapore exemplifies this approach by utilizing technology from a range of global partners including Japan, the United States, China, and European countries. This diversified strategy has positioned the city-state to connect to more than 40 subsea cables by 2028 while simultaneously doubling its landing sites within the next decade.
Singapore’s regulatory regime demonstrates controlled openness, requiring all new cables to land at government-designated sites while maintaining a supplier mix that insulates the network from unilateral coercion. This supplier diversification strategy across Southeast Asia enables regional countries to enhance network resilience, preserve leverage to negotiate terms, and secure continuous access to cutting-edge technologies regardless of shifting geopolitical alignments.
Likewise, Southeast Asian countries have developed regulatory frameworks that balance foreign investment attraction with sovereignty protection, using law as a tool of strategic assertion. Indonesia employs the most assertive approach, as our interviewees confirmed that cable installation and repairs in Indonesian waters must be carried out by ships with Indonesian crews, even if vessels are foreign owned. While these strict requirements can create delays, they represent necessary trade-offs for sovereignty and security.
Other regional countries have pursued more flexible approaches that maintain sovereignty while optimizing operational efficiency. Malaysia’s 2024 reinstatement of cabotage exemptions for foreign cable repair vessels demonstrates adaptive regulatory pragmatism – maintaining sovereignty while addressing operational needs and attracting “more foreign investments to the data center industry to boost the growth of the digital economy.”
The Philippines has taken a similarly balanced approach through recent amendments to its Public Service Act, which eliminated the 40 percent foreign ownership cap on telecommunications infrastructure while preserving government oversight mechanisms for national security review. These approaches demonstrate how countries employ law as an instrument of strategic sovereignty, adapting frameworks to balance investment attraction with protection of national interests in critical infrastructure sectors.
Emerging Regional Cooperation
The U.S. ban may paradoxically strengthen intra-regional cooperation as Southeast Asian states seek alternatives to exclusive dependence on either U.S. or Chinese systems. ASEAN’s February 2024 Digital Ministers’ Meeting commitment to “build a secure, diverse and resilient submarine cable network” between member states represents this emerging trend.
Already, the Asia United Gateway East project demonstrates increased regional coordination, with Singapore’s Singtel leading a consortium that includes telecommunications companies from Brunei, Indonesia, Malaysia, the Philippines, South Korea, and Taiwan to build a submarine cable system connecting Singapore and Japan. This project, contracted to Japan’s NEC Corporation, showcases how regional operators can collaborate on critical infrastructure while utilizing neutral suppliers, reducing dependence on approval processes controlled by competing major powers.
Through Singtel, Singapore also chaired other major cable consortia including SJC2 and SEA-ME-WE 6. It also played a founding role in the Southeast Asia and Indian Ocean Cable Maintenance Agreement. Singapore’s example shows how regional states can project influence beyond their geographic size.
Among Southeast Asian countries, Vietnam faces significant pressure from both U.S. policies and China’s activities in the South China Sea due to its heavy dependence on undersea cables traversing contested waters. In response, Vietnam has adopted a strategic approach of partnering with regional intermediaries – especially Singtel – to co-develop new cable infrastructure and reduce exclusive reliance on either Chinese or Western suppliers. This includes joint ownership of new systems, such as the Vietnam-Singapore Cable System, co-developed by Viettel and Singtel, with branches to Cambodia, Thailand, and Malaysia. This approach enables Vietnam to strengthen its digital infrastructure and connectivity, maintain information security, and avoid becoming dependent on any single major power.
Remaining Constraints on Strategic Autonomy
Despite these strategic responses, Southeast Asian countries face genuine constraints on their autonomy as the intensifying China-U.S. competition narrows the space for neutral positioning. The challenge lies not in choosing sides, but in maintaining sufficient flexibility to pursue optimal outcomes across multiple relationships simultaneously. U.S. pressure will increasingly align regulatory and procurement decisions with Washington’s interests, especially for countries reliant on direct U.S. data flows or security assistance. Simultaneously, China’s market power and investment flows remain critical for infrastructure financing and local digital economy expansion, making sharp decoupling economically and politically challenging.
The fundamental trade-off facing Southeast Asian countries lies between robust sovereignty and maximum connectivity growth. Expertise gaps, capacity constraints, and fragmented oversight in some Southeast Asian bureaucracies can undermine bargaining power and project outcomes, limiting the effectiveness of strategic diversification efforts.
To respond to these challenges, Southeast Asian countries should strengthen regional coordination mechanisms through enhanced implementation of the 2019 ASEAN Guidelines on Undersea Cables, which have seen limited practical application. Singapore’s emerging leadership role in international submarine cable discussions provides a foundation for more coordinated regional approaches.
Second, countries should accelerate institutional innovation by adapting regulatory frameworks to address both sovereignty and efficiency concerns while maintaining agility in rapidly evolving conditions.
Third, the pursuit of strategic neutrality through technological diversification remains essential. The continued presence of Japanese, European, and other suppliers in regional markets provides alternatives to binary choices between China and the United States. Maintaining and expanding these relationships creates additional strategic options and preserves flexibility against future constraints.
Fourth, enhanced maritime domain awareness and protection capabilities are increasingly necessary given recent cable incidents across the region. Improved protection and rapid repair capabilities are indispensable for promoting digital resilience in an era of heightened infrastructure vulnerability.
Conclusion
Southeast Asian countries are actively navigating the evolving landscape of digital infrastructure to maintain flexibility amid external pressure. While the FCC’s planned ban on Chinese technology in undersea cables introduces new constraints, the region’s record demonstrates a consistent capacity to manage and adapt to shifting geopolitical and technological environments. The approach Southeast Asian states take now will shape the region’s digital trajectory within the emerging contours of global competition. The path forward demands enhanced regional coordination, continued supplier diversification, and regulatory frameworks that balance sovereignty with operational efficiency.