Asian looks forward to international cooperation as China and the Gulf states join its top for the first time.
The participation of China and the Gulf Cooperation Council (GCC) at the May 2025 summit of the Association of Southeast Asian countries (ASEAN) was a milestone for ASEAN. This event represents the first time that the Middle East and China participated in this high -level meeting of the countries of ASEAN, which includes Brunei Daroslum, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
The Maya Summit, which was held in Kuala Lumpur, aims to enhance cooperation in trade, investment, infrastructure, green energy and the digital economy, as well as to raise the role of Asian’s global and cooperation in food and energy security, sustainable development, and alertness of the epidemic.
The Gulf Cooperation Council countries include Bahrain, Kuwait, Amman, Qatar, Saudi Arabia, and the United Arab Emirates. The joint GDP of the two groups in addition to China, along with its huge population, is a huge proposal: the total GDP is about $ 25 trillion backed 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 is to “link the energy of Asyan and their talent with the Gulf capital and the size of China.”
Perfect timing
The symbolic summit came in the face of the introductory attack – announced by “Liberation Day” by US President Donald Trump in early April – which was aimed at China and the Asian League countries as its higher goals. The shock of the tariff later gave the road by negotiating to largely reduce the fees – to 19 % for Kambodia, Indonesia, Malaysia, the Philippines and Thailand; 20 % for Vietnam. And 25 % for Brunay Darosloam. Myanmar and Laus faces a 40 % tariff rate, the highest in ASEAN, while Singapore, which runs a trade deficit with the United States, should pay 10 %, the lowest level in the group. On August 12, stopping the tariff with China for another 90 days.
The actual results of the summit do not indicate that a lot of concrete progress has been made, according to John Ashbourne, chief economist in emerging markets in Fitch, London.
“We have seen a lot of intention ads, but not many real and legally binding obligations,” he says. “However, the investment of the Gulf Cooperation Council countries in Asia has increased in recent years, and we expect this to continue. The sovereign wealth funds for the Gulf countries (SWFS) have become more active in the region, and we see great potential for cooperation in investing the infrastructure, digital and green economic.”
Ashbourne also notes that Islamic financing has great potential in the region, as Malaysia is an important leader in this field, as more companies from the Gulf Cooperation Council countries are looking to participate in the local environmental system.
One of the concrete results of the summit was the signing of an agreement for China, owned by government engineering (CHEC) to develop a port and an industrial center on the northeastern coast in Malaysia as part of the belt and road initiative (BRI). China Communications Construction is the fourth largest building company in the world by parents and Chec, the main contractor of the East Coast Railway in Malaysia-the largest BRI project in the country-and a major contractor in other Asian infrastructure projects, including China Los Railway.
The large SWFS for the countries of the Gulf Cooperation Council countries represents something from the prize – from the viewpoint of ASEAN and China, especially since SWS has moved to an aggressive investment approach, including external integration and purchases.
Abu Dhabi hosts three SWFS; Kuwait, Saudi Arabia and one country must, against a group of 4 trillion dollar assets, which are expected by the global SWF specialist in the industry to reach $ 18 trillion by 2030.
Banks and export agencies and agencies can also play an important role in leading the political will of governments in the Association of Southeast Asian Nations, China and the Gulf Cooperation Council countries to implement the sympathetic cooperation in the summit series.
This process was already ongoing before the summit. Last November, the export and import bank in Malaysia signed a framework agreement with the Export and Import Bank in China, which aims to facilitate trade between their countries.
Under the terms of the agreement, China Bank will provide Malaysia with a Renminbi credit line for Malaysian companies qualifying to conduct business in China. The line will finance the purchase of mechanical and electronic products produced by China, equipment, products and high -tech services, cooperation in natural resources, energy exploration, and joint construction projects.
This framework will facilitate the projects of the third shelves market in the shadow of the ambitious bri in China as well as commercial transactions between Malaysia and China. It gives priority to energy and infrastructure projects, especially clean energy financing and green initiatives led by Malaysian and Chinese companies.
China’s investment in ASEAN has increased steadily over the past decade or so. According to the 2023 report issued by DBS Bank in Singapore, the Chinese external direct investment grew with an annual growth rate of 13.5 % between 2013 and 2018, and in a segment 8 % between 2018 and 2022, with bri dynamic projects.
However, the dual -direction between China and ASEAN achieved 380 billion dollars as of 2022, according to a report issued in 2023 issued by HSBC, while the trade between the two reached $ 468.8 billion in 2023, an increase of 10.5 % in 2022, while Asean exceeded the European Union as the largest commercial partner in China in 2022.
Trump’s tariff has stimulated a dynamic that was already present: strengthening trade within the Asia Pacific region, the increasing use of regional currencies to settle in it, and align the cross -border payment systems.
“Although the customs tariff initially caused disturbances and open weaknesses, it also unintentionally accelerated the ASEAN towards female links in college and economic partnerships,” Bouby Wennant, professor of international relations at the College of Social and Political Sciences at Jada Mada University, Indonesia.
“In the long run, these strategies indicate more flexible and bonding, dependent on one commercial partner and plays a larger role in future global trade trends,” she says.
Meanwhile, Carmelo Verlito, CEO of the Market Education Center, is a research tank based in Kuala Lumpur, has mixed feelings regarding the proposal.
He says: “On the one hand, I understand the appropriate need for diversification in terms of trade and (foreign direct investment).” “On the other hand, it must be recognized that China and the Gulf states have a completely different relative weight in the relationship with ASEAN. While China is a dominant player in terms of foreign trade and investments, the Gulf countries are still playing a limited role.”
Debt
One of the areas where the three can cooperate unambiguously is debt markets, in bond formats and loans. The joint loans that originated in ASEAN are increasingly characterized by Chinese banks and the kings of the Gulf Cooperation Council states at the higher level, and in the initial bond market for sale, Chinese financial centers and large financial centers as a common practice.
China can soon launch up to $ 139 billion on the local bond markets for local scientists in ASEAN if Chinese organizers in July suggest expanding the “leg to the south” to Bond Connect in China-which enables institutions in Chinese to reach the Hong Kong bond market.
“We are still positive on the long -term capabilities of ASEAN Corporate, which are supported by strong basics, including its young residents, and the strong infrastructure associated with trade,” says Koh Chen, head of the Treasury, Research, and Customer Call in Singapore. “There are pockets of opportunities and the areas of potential cooperation arising from several trends, such as diversifying commercial partners and high trading in Asian. With regard to the UOB financing strategy, we realized early on the importance of the panda bond market (the issuance of foreign entities in Renminbi) as China continues to liberalize renewal and the financial brand.
She adds that UOB has also witnessed an increasing appetite for the Gulf Cooperation Council investors to issue traditional bonds.
In all of this, optimism may be called: “ASEAN is often seen as a neutral mediator; it can combine countries or groups that may not have close relations,” says Ashburne. This can be, at all, the beginning of a big thing. “
