The dominant event in Southeast Asia during the 8th century was the rise of the Sailendra (Shailendra) dynasty, based in Srivijaya (Shrivijaya). From the area of Palembang in southern Sumatra, Srivijaya gradually extended its control to western Java and parts of the Malay peninsula. Some scholars believe that the Sailendras were a Javanese dynasty, whose role in Srivijaya cannot be dated to earlier than the 9th century.
In central Java the early 8th century saw the founding of the kingdom of Mataram, which expanded during the reign of the Javanese hero Sanjaya. He and most of his descendants were patrons of the cult of Shiva. After the Sailendras conquered Java in 742-755, the capital of Mataram was moved to eastern Java where it remained until the 9th century. The germinal period of Javanese literature is traced back to the 8th century as is also the foundation of the Borobudur, one of the great monuments of Buddhist architecture.
The prosperity of the kingdoms of Sumatra and Java increased gradually during this period. The area was an entrepot between China on one side and South and West Asia on the other. Command of the Strait of Malacca and the Sunda Strait was crucial to the control of trade, and Palembang was ideally situated to exercise it. Indonesia maintained close ties with India, as is evidenced by the adoption of an Indian alphabet, the use of Sanskrit at court, and the common use of Indian place-names. There were religious links with Brahmanism in India and with Indian Mahâyâna Buddhism as well. The Borobudur represents a meaningful amalgamation of Indian ideas and Javanese traditions.
In mainland Southeast Asia, Kambuja (Cambodia), called Chenla by the Chinese, had entered a period of political decline after the reign of Jayavarman I in the late 600’s. its relations with China vacillated between friendship and hostility. According to a Chinese account, it was split in two in the early 700’s, and the southern part was attacked by the Javanese.
Champa, to the east, survived Javanese attacks in 744 and 787. its Hinduized dynasty patronized, the newly introduced cult of Vishnu. The rest of what is now Vietnam remained under Chinese influence, which increased after China defended the area from a Malay attack in 767. However, in 780, Champa annexed the Hue area.
During the 8th century, Burma was under the rule of the Pyu. Their capital was at Srikşetra (Shrikshetra), the site of which (modern Prome) provides evidence of both Hindu and Buddhist culture. Local Hinduized dynasties in Arakan and elsewhere were less important. The Thai kingdom of Nan Chao, in what is now south-western China, penetrated northern Burma in the second half of the 8th century. Eventually both the Pyu and Nan Chao kingdoms sent embassies to China, which played a dominant role in the politics of this region, possibly because of the area’s commercial importance to the Chinese. Contact with India was established via the Chindwin Valley of northwestern Burma to Manipur, a route that was to be used frequently in the future.