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China-US relations: will spy balloon fallout bring ‘instability’ to Southeast Asia?

  • Many Southeast Asian states receive investment from the US and also trade in American services, which enables them to produce items they sell to China
  • Disruption to this system could hurt Southeast Asia at a time when the region is grappling with inflation and economic contractions, an analyst said

Southeast Asian countries are wary that the US-China fallout over the spy balloon saga could inject instability in the region at a time it faces inflation and economic slowdown, analysts said, as distrust widens between the world’s two largest economies.

The US military on Saturday shot down what it said was a Chinese surveillance balloon that last week crossed into North American airspace, including over sensitive military sites. China insisted it was an accident involving a civilian aircraft and threatened repercussions for Washington’s “overreaction”.

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