Europe Seeks Digital Ties With Southeast Asia Amid Strategic Competition

European leaders are actively pursuing deeper ties with Southeast Asia, driven by the region's growing digital economy and the potential for mutual benefits in technology and financial innovation. French President Emmanuel Macron, in his keynote speech at the 2025 Shangri-La Dialogue in Singapore, emphasized the need for a new special relationship between Europe and the Indo-Pacific. He highlighted the potential erosion of long-standing alliances and the rise of force-driven dominance, drawing parallels between China’s actions in the South China Sea and Russia’s invasion of Ukraine. This signals Europe’s desire for closer cooperation in the region, particularly in non-traditional areas such as digital governance and green infrastructure.

Southeast Asia finds itself at the center of strategic competition between major powers, with China maintaining its economic influence in disputed maritime zones and the United States holding a firm trade stance. This backdrop presents Europe with an opportunity to position itself as an alternative partner, focusing on areas where it can offer unique value. However, analysts caution that Europe’s impact may be limited by geographic distance and preestablished economic ties. The EU’s partnerships with Southeast Asia have faced challenges due to differing political views and slow trade talks, with agreements in place with Singapore and Vietnam but broader ASEAN free trade deals faltering. Despite these obstacles, European officials see benefits in deeper cooperation and market diversification, aiming to reduce reliance on any single external power.

Digital cooperation presents fresh opportunities across the region’s tech sector, as Southeast Asia rapidly adopts digital assets. Vietnam, for instance, passed the Law on Digital Technology Industry on June 14, 2025, introducing new digital asset classifications and compliance rules aligned with global standards. This move supports supply chain integration and has garnered strong interest from regional tech startups. The trend of rising crypto adoption is also evident in Hong Kong, which plans to apply a Stablecoin bill by August 1, 2025, under state oversight. Financial Secretary Paul Chan noted the growing demand for stablecoins globally, with rules permitting licensed issuers to peg stablecoins to various fiat currencies beyond the US dollar. South Korea is also drafting legislation for won-pegged stablecoins, reflecting a wider regional trend that may influence nearby Asian financial centers.

Overall, EU trade with Southeast Asia remains smaller than that of China or the United States. However, Europe’s role in digital development is gaining more attention. Opportunities in blockchain governance, crypto regulation, and digital infrastructure are expanding, and the EU and Southeast Asia partnerships could focus on these growing areas. Vietnam’s crypto legalization developments and Hong Kong’s inclusive stablecoin rules highlight this potential cooperation. Such collaboration may boost Europe’s strategic relevance in the global digital economy, with experts expecting digital cooperation topics to shape future economic dialogues between Europe and Asia.