China's relations with Southeast Asia have undergone many changes since the founding of the People's Republic of China (PRC) in 1949. In 2007, China has good relations with all of the Southeast Asian countries, following active efforts to promote a “good neighbour” policy since 1997. This is a far cry from the situation in the early 1950s, when Beijing had good relations with few of its Southeast Asian neighbours and was supporting communist movements and insurgencies in the region. In between, there were many twists and turns — and major tectonic shifts — in Sino-Southeast Asia relations. Friendly relationships turned hostile, and hostile relationships became friendly. The PRC morphed from a revisionist power in the region during the 1950s and 1960s into a defender of the (post-Vietnam War) status quo by the end of the 1970s.

Nevertheless, the biggest change in the relationship is the one which is still underway, and is the one that the Southeast Asians will have the largest challenge adjusting to: the emergence of China as a regional and global great power. While the PRC has had influence in Southeast Asia over the last five decades, its growing economic prowess and military capabilities will provide it with political influence in ways it has lacked in the past. In addition to this fundamental change in the structure of power in the Asia Pacific, there is the question of what type of foreign policy China will follow once it achieves this great power status. Will it be a relatively satisfied power that accepts the regional status quo, or will it be a revisionist power that seeks to restructure the region? Will China emerge as a giant panda, or as a fire-breathing dragon?

In the short- to medium-term, Southeast Asian countries are — for the most part — following a hedge strategy vis-à-vis China as a way to manage its rise. They are seeking to benefit from China's rise (especially economically) and to accommodate it, while at the same time seeking to maintain strong economic and political (and for some, security) relations with other major powers, including the United States (U.S.), Japan, and India, in the event that relations with the PRC turn acrimonious. Fortunately, the Chinese are also seeking to manage their rise in a manner that dampens fears of a “China threat” and spreads the economic benefits of its emergence with its southern neighbours.