Sino-ASEAN trade links seen key

Deeper trade, investment, and financial integration between the Association of Southeast Asian Nations (ASEAN) and China will help Southeast Asian economies stay resilient amid mounting global disruptions, according to Indonesia's special envoy for international trade and multilateral cooperation.

Mari Elka Pangestu said rising protectionist measures worldwide have prompted many Chinese companies to establish secondary production bases in ASEAN countries, enabling economies such as Indonesia and Vietnam to become more integrated into global value chains.

"Hong Kong can play a crucial role in facilitating Chinese firms to invest abroad," Pangestu said on Oct 7. "I actually think we need to have some kind of strategic dialogue with China on how we can have more investment (in ASEAN)", she added.

Greater Chinese investment would help strengthen and deepen regional supply chains, Pangestu said during a lecture titled "Asia in a Changing World Order: Openness, Resilience, and Security" for the Edward KY Chen Distinguished Lecture 2026.

Speaking at the University of Hong Kong, Pangestu outlined four major forces reshaping Asian economies: rising tensions between the US and China, disruptions linked to the Strait of Hormuz crisis, the transition toward greener economies driven by climate concerns, and the rapid rise of artificial intelligence.

Pangestu noted the deepening Hong Kong-ASEAN partnership. She said the Regional Comprehensive Economic Partnership (RCEP) opened an accession working group covering Hong Kong in September, giving Hong Kong a chance to be part of Asia's largest trade agreement.

Bernard Charnwut Chan, chairman and president of Hong Kong-listed Asia Financial Holdings, cited Hong Kong's role as "a super connector" but noted that Hong Kong has to "know who we are connecting to".

"I don't think we understand ASEAN enough. I think we are far from fully appreciating and understanding what the needs are (in ASEAN) and where Hong Kong can come in and fill the gaps," Chan said in a discussion held following Pangestu's lecture.

Chan said the establishment of the ASEAN Chamber of Commerce (Hong Kong) in June is "a good step to further engage" economically, socially, and academically.

In a press briefing held on the sidelines of the lecture, Pangestu noted that for ASEAN, "openness is still the answer to become resilient in this very uncertain world".

"Within ASEAN itself, we need to strengthen, broaden, deepen our regional economic integration as well as lead the way for RCEP, because ASEAN has actually been leading the progress in RCEP," she said.

Pangestu said changing geopolitics also demands establishing a "very diversified regional supply chain".

For example, Pangestu said many Chinese companies invest in electric vehicle manufacturing in ASEAN countries.

"You'd want to have a situation where you would produce different parts of the electric vehicle in different parts of ASEAN or even together with the RCEP countries. And because you have a free trade agreement, you can trade and get the different components from different areas," she said.

With Hong Kong being a major financial center and keen to be Asia's green finance hub, Pangestu said this would accelerate ASEAN's energy transition.

She said this is crucial for ASEAN countries as they face rising energy prices because of escalating tensions in the Middle East. Climate concerns are also spurring ASEAN companies to join the sustainable supply chain.

Pangestu said "there are a lot of opportunities" in terms of green finance. These include investing in electric vehicles, decarbonizing industries, and renewable energy, and developing a carbon market.

Pangestu said Muslim-majority Indonesia has issued sovereign green sukuk — Sharia-compliant finance certificates — since 2018, while Hong Kong has the ambition to be Asia's green finance hub.

"This is very complementary. What we need to do is align the green bond standards and taxonomies and mobilize private capital for Southeast Asia's energy transition," she said.

For Edward Chen Kwan-yiu, honorary professor of HKU Business School, Hong Kong can play a role in developing ASEAN's carbon market.

"Hong Kong, with all its financial infrastructure, would be a suitable hub for cross-border carbon markets, maybe even linking all the ASEAN countries," Chen said.