China, ASEAN can build bridges

China and member states of the Association of Southeast Asian Nations have a long history of cultural and economic ties. As a Chinese saying puts it, they are “connected by mountains and seas”. This vividly describes the close links that bind China and ASEAN, both physically and metaphorically.

Strategically positioned, the ASEAN region serves as a key node of global shipping and geopolitics, and is one of the world’s most dynamic economic regions. With economies that are open and trade-oriented, ASEAN nations recognize that their relatively small domestic markets cannot sustain long-term economic growth.

Therefore, they need access to regional and global markets, foreign investment and participation in international production networks for growth and development. It is thus in the interests of ASEAN countries to keep markets open and strengthen global connectivity. This imperative has led ASEAN to champion regional economic integration and multilateralism.

A key aspect of China-ASEAN economic relations is the complementarity in regional production networks. ASEAN countries produce raw materials, components and intermediate goods, which are then exported to China for further processing into finished products. China and ASEAN are therefore not just trading with each other but are part of the same interconnected global production and supply chains.

Economic cooperation is the strongest bond between China and ASEAN. China has been ASEAN’s largest trading partner since 2009, while ASEAN has held the same status for China since 2020. In 2024, bilateral merchandise trade reached $772.4 billion, which was about 20.1 percent of ASEAN’s total trade.

Though these figures are impressive, the real importance of the relationship cannot be understood simply by looking at the size of trade. The true significance of the relationship between China and ASEAN is their deeply integrated industry, supply and value chains.

ASEAN benefits significantly from China’s vast market due to its geographical proximity. China’s expanding middle-income population also generates strong demand for ASEAN goods and services, including agricultural products and electronics.

Landmark projects such as the Jakarta-Bandung High-Speed Rail and the China-Laos Railway have further bolstered regional connectivity. China’s contributions in financing, technology and industrial capacity are helping ASEAN upgrade its infrastructure and industrial ecosystems.

The Regional Comprehensive Economic Partnership, the world’s largest free-trade agreement, further enhances the stability and resilience of regional supply chains. At a time when global economic fragmentation risks are rising due to major-power geostrategic competition, the stability and predictability of China-ASEAN cooperation have become increasingly valuable, serving as the ballast of regional stability and prosperity.

China has built one of the world’s most comprehensive and extensive manufacturing and industrial ecosystems, while ASEAN offers natural resources, agricultural products, competitive manufacturing bases, growing consumer markets and an increasingly important position in global supply and value chains. These complementary strengths underscore the potential for collaboration rather than competition.

This complementarity is visible in regional production networks. A product may involve raw materials from one country, components from another, processing may occur in a third and final assembly somewhere else before reaching consumers.

This is why the China-ASEAN dynamic goes beyond a simple relationship between an exporter and an importer. It has become a much deeper economic partnership in which production, investment and supply chains are increasingly interconnected and interdependent.

This partnership is also expanding into new areas such as investment, infrastructure, logistics, technology, digitalization and the green economy. The China-ASEAN Free Trade Area 3.0 is an important development in this regard, reflecting that China-ASEAN economic relations now extend far beyond the traditional exchange of goods and services.

The broader point is that when two economies have different but complementary strengths, a larger market can unlock opportunities for both. China does not have to replace ASEAN, nor do ASEAN countries need to replace China. The greater opportunity lies in leveraging each other’s competitive strengths.

For China and ASEAN, the challenge is therefore not how to build higher walls, but how to build more bridges. CAFTA 3.0 reflects this broader trend, with greater emphasis on market access, supply-chain connectivity and emerging areas such as the digital and green economies.

The author is the president of the Centre for New Inclusive Asia.

The views don’t necessarily represent those of China Daily.