Recent reports in some Western media have claimed that China’s exports are harming Southeast Asia’s economies, hollowing out manufacturing industries, and causing unemployment. However, these narratives don’t hold water. In reality, trade between China and Southeast Asia is a story of mutual benefit, boosting economies and creating jobs across the region.
Trade Figures Tell a Different Story
According to data from China’s General Administration of Customs and Ministry of Commerce, trade volume between China and the Association of Southeast Asian Nations (ASEAN) reached over $982 billion in 2024, a 7.8% increase from the previous year. For the fifth consecutive year, China and ASEAN have been each other’s largest trading partners.
China exports machinery, electronics, and chemical materials to Southeast Asia, which are essential for upgrading local manufacturing industries. In return, China imports agricultural products, mineral resources, and electronic components from ASEAN countries. For instance, over 60% of Thailand’s rubber exports and more than half of Malaysia’s palm oil exports are destined for China.
Boosting Industrialization and Modernization
China’s high-quality exports and technological investments have accelerated industrialization and modernization in Southeast Asia. Infrastructure projects like Cambodia’s first expressway and Indonesia’s high-speed rail, supported by Chinese investment, have enhanced connectivity and economic growth.
In emerging industries such as renewable energy and electric vehicles, Chinese companies are establishing local manufacturing facilities, fostering technology transfer and skill development. Initiatives like the “Two Countries, Twin Parks” project are promoting industrial cooperation, benefiting Southeast Asian nations in their modernization efforts.
Creating Job Opportunities
Chinese investments have generated significant employment in Southeast Asia. As of July 2023, China has established over 6,500 direct investment enterprises in ASEAN countries. Projects like the East Coast Rail Link in Malaysia created 23,000 jobs, while a BYD factory in Thailand employed over 6,100 local workers within a year of opening. In Vietnam, Chinese-funded industrial parks have created around 300,000 jobs.
The growing digital cooperation between China and Southeast Asia is also driving growth in sectors like e-commerce, digital payments, and artificial intelligence, leading to increased demand for skilled professionals in software development and data analysis.
Elevating ASEAN in the Global Value Chain
By exporting intermediate goods to Southeast Asia, which account for 67% of China’s total exports to the region, China is helping ASEAN countries move up the global value chain. These intermediate goods are processed in Southeast Asia and then exported worldwide with higher added value, transforming the region into a hub for medium to high-end manufacturing.
The Path Forward: Building Bridges, Not Walls
The notion of an “export shock” from China is a misrepresentation aimed at driving a wedge between China and its Southeast Asian neighbors. Embracing protectionism would hinder the historic opportunity for deeper regional integration and shared prosperity.
Instead, recognizing the mutual benefits of cooperation is crucial. By engaging with China’s vast consumer market and advanced technologies, Southeast Asian nations can continue to achieve economic growth and development. Focusing on collaboration, developing high-value industries, and strengthening supply chain resilience will ensure a stable and prosperous future for all.
In our interconnected world, economic success comes from building bridges, not erecting barriers. China and Southeast Asia have much to gain by working together towards common goals.
