As tension between the US and China ebbs and flows, most countries are becoming increasingly wary of both, once again putting international banks in an uncomfortable no-man’s land. 

A fresh wave of Russia-related US sanctions hit the wires just in time for this year’s May Day celebrations across the region. This time, however, a significant number of them were aimed at Hong Kong companies ostensibly aiding the war effort against Ukraine.

Although it is no secret that the city doesn’t adhere to specific unilateral sanctions regimes, as a King & Wood Mallesons insight from 2022 indicates, that won’t keep the IT and financial crime departments of the city’s commercial and retail banks from feeding the names of all the parties involved into computer systems.

Cooling Confrontation

As the tech slowly starts to spit out automated alerts intended to kick each institution’s specific processes into action, there is a certain irony in that the confrontation between the US and China seems to have cooled somewhat from the heady days of late 2022 and early 2023, as finews.asia recently commented on.

Indeed, a recent visit by US Secretary of State Anthony Blinken to China didn’t bring too much in the way of excitement, and it certainly didn’t result in the level of sanctions that the Wall Street Journal (paywall) had speculated were in the works, or at least not yet.

Familiar Sentiment

Still, that doesn’t make things any easier behind the scenes, particularly for international banks based in places like Hong Kong that are caught between a rock and a hard place.

But that kind of conflicted, caught-in-the-middle sense of dread is nothing new for much of the region, as a graphic released by digital publisher Visual Capitalist on Thursday shows.

Rising Concern

Based on a 2024 survey conducted by the ASEAN Studies Centre at ISEAS – Yusof Ishak Institute, it shows that most countries in Southeast Asia are concerned about the rising influence of both the US and China.

Although the US had a slight advantage in terms of underlying skepticism, the one thing that does come through is that worry far outdoes welcome almost every time.

Different Interpretation

That, however, was a slightly different take from the study’s authors themselves, who indicated when the report was released about a month back that China, with 50.5 percent, had edged past the US as the «prevailing choice» if the region as a whole was forced to align themselves to either country.

By the same token, the US was the first choice for 49.5 percent, a glaring and steep decline from 61.1 percent a year earlier. Another interesting finding was that 50.1 percent of the survey’s respondents distrusted China, with 45.5 percent fearing the mainland could use economic and military power «to threaten» the individual interests and sovereignty of each member. 

Read the Room

All in all, that casts an entirely different light on the Visual Capitalist graphic, not to mention the actual meaning of what it means to be forced to cast their lot with one of the remaining superpowers.

For the US and China, it is a reminder to do a better job of reading the room, at least when they are jostling for position. But at the end of the day, the only ones who really get the short end of the stick are banks, as they will have to keep feeding their tech with names and entities for the foreseeable future no matter what – notwithstanding who gets the upper hand.