Shared prosperity and high-quality, inclusive growth remain at the core of ASEAN's vision, underpinning the principle of ASEAN Centrality in managing regional geo-economics and geopolitics. These themes were central to discussions at the ASEAN-China Strategic Relationship Forum held at Sunway University in Malaysia on September 17-18, which brought together academics, policymakers and researchers from across the region to assess emerging challenges and opportunities.

ASEAN's Economic Weight and Regional Growth

This focus on common prosperity has delivered substantial results. As a group, ASEAN accounts for about 7.5% of global gross domestic product and has contributed roughly 8 to 9% of worldwide GDP growth between 2015 and 2025. With a combined output of close to $4 trillion, the bloc ranks as the world's fifth-largest economy. The five largest members — Indonesia, Malaysia, the Philippines, Thailand and Vietnam — have recorded average annual growth of between 4% and 5%.

Strengthening ASEAN-China Trade and Investment Ties

Chinese Ambassador to Malaysia Ouyang Yujing described bilateral trade as a powerful engine of growth, pointing to a deepening win-win partnership between ASEAN and China. He emphasized three priorities for building shared resilience: strengthening development through openness and economic integration, advancing cooperation on green energy and innovation, and accelerating negotiations on a Code of Conduct in the South China Sea to ensure lasting peace and stability.

Economic cooperation between the two sides has expanded significantly through the ASEAN-China Free Trade Agreement. Its latest upgrade, ACFTA 3.0, was finalized in Kuala Lumpur under Malaysia's ASEAN Chairmanship in 2025 and focuses on high-quality value chains, the green economy, digital transformation and enhanced regional connectivity.

ASEAN has also helped create the world's largest trading bloc through the Regional Comprehensive Economic Partnership, which includes five external partners — China, Japan, South Korea, Australia and New Zealand. RCEP represents about 30% of global GDP, 28% of global trade, 25% of global foreign direct investment flows and 30% of the world's population.

Merchandise trade between ASEAN and China reached $772.4 billion in 2024, equivalent to 20.1% of ASEAN's total trade. Despite global headwinds, that figure rose to $1 trillion in 2025. Bilateral trade between China and Malaysia alone hit a record high of about $133.2 billion in 2025, up 12% year-on-year, keeping China as Malaysia's largest trading partner for the 17th year in a row. Malaysia's trade with fellow ASEAN members totaled around $211.9 billion, with Singapore as its largest partner within the bloc. Both ASEAN as a whole and China remain Malaysia's key trading partners.

Rising Geopolitical and Geo-Economic Fragmentation

Despite this growth, the region faces heightened uncertainty stemming from US-China trade tensions, US tariff measures, the ongoing conflict involving the US and Iran in the Middle East, the war between Russia and Ukraine in Europe, persistent global inflation and disruptions to global value chains. These factors are weighing heavily on both the global economy and East Asia.

In a keynote address, Kan Channmeta, Secretary of State at Cambodia's Ministry of Industry, Science, Technology and Innovation, examined how emerging technologies are shaping a multipolar global order. He noted that the rise of techno-nationalism is reinforcing fragmentation along geopolitical and geo-economic lines.

These pressures are translating into supply-chain disruptions, sustained oil price shocks, higher inflation and weaker growth. According to the IMF forecast from July 2026, global growth is expected to ease from 3.5% in 2025 to 3% in 2026. Growth in emerging and developing Asia is projected to slow from 5.6% to 5% over the same period. Prolonged oil shocks linked to the US-Iran conflict are contributing to cost-push inflation and raising the risk of stagflation — a combination of elevated inflation and rising unemployment that limits the effectiveness of fiscal and monetary policy in cushioning economic shocks.

Uneven Impacts and the Weaponization of Trade

Participants at the forum stressed that several structural issues require urgent recalibration to ensure sustainable and inclusive growth:

• Growing geo-economic fragmentation: This trend was evident even before the COVID-19 pandemic. While open economies have generally grown faster, openness has also widened inequalities — between skilled and unskilled workers and between rural and urban areas. Disparities are also visible between developed and developing nations, although recent data shows developing economies in the Global South narrowing the gap with the developed economies of the Global North. Rising economic policy uncertainty is reshaping strategic alliances and creating investment uncertainty, as multinationals reconfigure value chains through offshoring, nearshoring and friend-shoring.
• Geopolitics and trade distortions: The increasing use of trade as a geopolitical tool is distorting trade and investment flows. The shift away from rules-based and market-based frameworks is creating imbalances in domestic and regional policies, intensifying economic policy uncertainty and encouraging the formation of competing strategic alliances within a multipolar governance system. The consequences are likely to be most pronounced for the larger and more open economies of Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam.

Policy Priorities for Resilience in a Multipolar System

In light of growing uncertainty, the forum outlined several policy directions for navigating a multipolar environment:

• Make global value chains more resilient to shocks and reinforce rules-based and market-driven trade. Maintaining an open environment for trade and investment and deepening regional economic cooperation will be essential, with ASEAN playing a central role in upholding the arrangements that have supported long-term sustainable development. A renewed framework for shared prosperity may be needed for the multipolar era.
• Prepare for frontier technologies — including artificial intelligence, robotics, electric mobility, autonomous systems and space technology. Firms engaged in global value chains will need to be agile to move into higher value-added activities in both manufacturing and services. This transition will require a skilled and adaptable workforce able to unbundle existing competencies and rebundle them for new roles, a priority for both ASEAN and broader East Asia.
• Address the social consequences of technological change, which could exacerbate fragmentation, widen inequalities and create new social pressures if not managed inclusively.