As the U.S.-China trade war heats up, Southeast Asian nations are feeling the pinch. With the U.S. imposing new tariffs to reduce its trade deficit, countries in the Association of Southeast Asian Nations (ASEAN) are facing uncertainty and economic pressure.
These export-driven economies rely heavily on the U.S. market for their goods. But with rising tensions, they’re urgently seeking new strategies to diversify trade and strengthen regional integration. Enter China—their largest trading partner.
At the recent 46th ASEAN Summit in Kuala Lumpur, leaders emphasized the importance of deepening ties with China. ASEAN Secretary-General Kao Kim Hourn highlighted the bloc’s commitment to multilateralism and free trade, stating their goal to keep the global economic system “open, free, and rule-based.”
China and ASEAN have been boosting their economic partnership over the years. Trade between them rose from 11.6% of ASEAN’s total foreign trade in 2009 to nearly 20% in 2023. By 2024, they had become each other’s largest trading partners for five consecutive years.
The momentum continues. In the first quarter of 2025, total trade reached 1.71 trillion yuan ($234.17 billion), marking a 7.1% increase from the previous year. Investments are also growing, with China becoming ASEAN’s second-largest source of foreign investment in 2023.
What’s next? The upcoming Version 3.0 of the China-ASEAN Free Trade Area (CAFTA) promises to open new doors. Both sides have agreed to collaborate in emerging fields like the digital economy, green technology, and supply chain connectivity. This move demonstrates their dedication to a multilateral trading system and inclusive globalization.
Chinese President Xi Jinping’s visits to Vietnam, Malaysia, and Cambodia in April further solidified these commitments. Joint statements emphasized strengthening economic cooperation and building stable industrial and supply chains.
While some ASEAN countries express concerns about competition from Chinese goods, many see the benefits of closer ties. By working together, they hope to bolster regional growth and navigate the challenges posed by global trade tensions.
In a rapidly changing economic landscape, ASEAN and China are choosing collaboration over confrontation, aiming for a future of shared prosperity.
