ASEAN is turning to international cooperation while China and the Gulf States join its summit for the first time.
The participation of China and Gulf Cooperation Council (CCG) at the summit of May 2025 of the Association of Nations of Southeast Asia (Anase) was an important step for the Anase. The event marked the first time that the Middle East and China participated in this high-level meeting of the Anase countries, which include Brunei Darustam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The May summit, held in Kuala Lumpur, aimed to strengthen cooperation in trade, investment, infrastructure, green energy and the digital economy, as well as to raise the global role of Anase and to initiate collaboration in food and energy security, sustainable development and pandemic preparation.
CCG countries include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The combined GDP of the two groups plus China, as well as their heavy populations, constitutes a great proposal: a GDP combined around 25 billions of dollars supported by a total population of more than 2.1 billion people.
Speaking at a meeting in Singapore a few days after the summit, Malaysian Prime Minister Anwar Ibrahim said that the goal was to “connect the energy and the talent of the Anase with the Gulf capital and the China scale”.
Perfect timing
The symbolic milestone of the summit came to the face of the tariff attack – announced as “liberation day” by American president Donald Trump in early April – who targeted China and the Anase countries as the most important targets. The tariff shock then sold by negotiations to considerably reduced samples – to 19% for Cambodia, Indonesia, Malaysia, the Philippines and Thailand; 20% for Vietnam; And 25% for the Brunei Darustalam. Myanmar and Laos are faced with a punitive rate of 40%, the highest in the Anase, while Singapore, which manages a trade deficit with the United States, has to pay 10%, the lowest in the group. On August 12, the prolonged break of its price hike with China by 90 other days.
The real results of the summit do not suggest that a lot of tangible progress has been made, according to John Ashbourne, senior economist in emerging markets at Fitch Solutions in London.
“We have seen many declarations of intention, but not many real and legally binding commitments,” he says. “That said, CCG’s investment in the ANASE has increased in recent years, and we expect this to continue. The sovereign funds of the Gulf countries (SWF) have become more active in the region, and we see significant potential for cooperation in infrastructure, digital and green-economy investment initiatives.”
Ashbourne also notes that Islamic finance has great potential in the region, Malaysia being an important leader in the field, because more and more CCG companies are looking to get involved in the local ecosystem.
One of the tangible results of the summit was the signing of an agreement for China Harbor Engineering Company (Vér), state property on the northeast coast of Malaysia as part of the Belt and Road (BRI) initiative. China Communications Construction Company, the fourth largest construction company in the world by Revenue and Check’s Parent, is the main entrepreneur for the east coast rail link in Malaysia – the largest BRI project in the country – and a large entrepreneur on other Anase infrastructure projects, including the railway China -Laos.
Considerable GCC Swfs represent something of a price – from the point of view of Anase and China, especially since the SWFs went to a much more aggressive investment approach, including outgoing mergers and acquisitions.
Abu Dhabi hosts three swfs; And Kuwait, Saudi Arabia and Qatar each have one, for an assets combined with 4 billions of dollars, that the specialist in the Global Industry SWF plans to reach nearly 18 dollars by 2030. Last year, these six SWF GCCs represented 54% of the funds deployed overall by SWFS.
Banks and export agencies can also play an important role in the conduct of the political will of the governments of the Anase, China and CCG countries to execute the synergistic cooperation envisaged in the summit press release.
This process was already underway before the summit. Last November, the Malaysia Export-Wirelessness Bank signed a framework agreement with the Export-Importation Bank of China, which aims to facilitate trade between their country.
Under the terms of the agreement, China Exim Bank will provide Exim Bank Malaysia with a renminbi credit line for qualified Malaysian companies to carry out business in China. The line will finance the purchase of mechanical and electronic products produced in China, equipment, high -tech products and services and collaboration in natural resources, energy exploration and joint construction projects.
The framework will facilitate the cooperation projects of the third -party market under the ambitious Chinese BI as well as commercial transactions between Malaysia and China. It prioritizes energy and infrastructure projects, in particular the financing of clean energies and green initiatives led by Malaysian and Chinese companies.
China’s investment in the Anase has increased regularly over the past decade. According to a 2023 report from the DBS Bank of Singapore, the Direct Chinese Outdoor Investment has increased at an annual growth rate composed of 13.5% between 2013 and 2018 and an 8% clip between 2018 and 2022, BI projects underlying the dynamics.
But the cumulative bidirectional investment between China and ASEAN adopted $ 380 billion in 2022, according to a 2023 HSBC report while trade between the two reached $ 468.8 billion in 2023, an increase of 10.5% in 2022, while the ASEAN exceeded the EU as the largest negotiation partner in China 2022.
Trump’s prices were used to galvanize a dynamic that was already in place: strengthening intraregional trade in Asia-Pacific, the growing use of regional currencies for the regulations and alignment of cross-border payment systems.
“Although the prices initially caused disturbances and exposed vulnerabilities, they have also involuntarily accelerated the evolution of the Anase to closer intra -gional connections and economic partnerships”, observes Poppy Winanti, professor of international relations on the Faculty of Social Sciences and Politics of Universitas Gadjah Mada, Indonesia.
“In the long term, these strategies underline a more resilient and more interconnected ASEAN which relies less on a single trading partner and plays a more important role in future global trade trends,” she says.
At the same time, Carmelo Ferlito, CEO of the Center for Market Education, a reflection group based in Kuala Lumpur, has mixed feelings concerning the proposal.
“On the one hand, I understand the appropriate need for diversification in terms of trade and [foreign direct investment]”, He said.” On the other hand, it must be recognized that China and the Gulf countries have a very different relative weight in relations with the Anase. Although China is a dominant player in terms of external trade and investment, the Gulf countries are still playing a limited role. »»
Debt collaboration
An area in which the three can cooperate without ambiguity is the debt markets, in the obligation and loan formats. Syndicated loans are from the Anase increasingly set up Chinese and GCC banks at the highest level, and in the sale and market for primary sales and Aseanorigini, road basins visit large Chinese and GCC financial centers as a current practice.
China could soon unleash up to $ 139 billion in the bond markets of the Local currency of the Anase if a proposal made in July by Chinese regulators to extend the “southern leg” of the Bond Connect channel in China – which allows institutions on the Chinese continent to access the Hong Kong bond market – is hit.
“We remain positive on the long -term potential of the Anase for companies, supported by fundamental solids, in particular its young population, an increase in the middle class and strong infrastructures linked to trade,” explains Koh Chin Chin, head of the group, research and customer advocacy, in United Outase Bank (UOB) in Singapore. “There are pockets of opportunities and potential areas of cooperation resulting from several trends, such as the diversification of trade partners and the increase in intra-aseen trade. In terms of UOB financing strategy, we recognized the importance of the panda bond market very early on [issuance by foreign entities in onshore renminbi] While China continues to liberalize the Renminbi and its financial markets. »»
UOB has also experienced an increase in appetite for CCG investors for the issue of conventional bonds, she adds.
In all of this, perhaps optimism is called: “ASEAN is often considered a neutral broker; It can bring together countries or groups that could otherwise have close relations, ”explains Ashbourne of Fitch Solutions. “So, in some respects, it is the perfect partner to bring together the leaders of the CCG and China in the same room. It could, absolutely, be the beginning of something big.”