Asean-China-GCC ties seen to inject certainty into global economy

The Star

25-05-2025

KUALA LUMPUR: Cooperation between the Association of Southeast Asian Nations (Asean), China and the Gulf Cooperation Council (GCC) countries will unlock immense potential for multilateral cooperation across sectors and inject stability into the world economy, analysts said ahead of an inaugural joint summit for the three parties.
At the Asean-China-GCC Summit, to be held in the Malaysian capital next week, the three parties are expected to deepen practical cooperation in various fields, such as trade, investment and supply chain, creating new opportunities in clean and renewable energy, digital economy, electric vehicles, financial markets and infrastructure development among other areas.
The trilateral gathering of the leaders of 17 countries also marks an innovative step in cross-regional South-South cooperation among complementary economies to ride out trade disruptions caused by US tariffs.
'Golden triangle'
Asean, a group of 10 Southeast Asian countries - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, is the fifth-largest economy after the United States, China, the EU and Japan.
With a large, youthful population driving digital transformation, abundant natural resources, and a skilled labor force, Asean has positioned itself as a major engine powering the global supply chain and industrial development.
The GCC economies, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), are expected to double its economic growth rate from 2.1 percent in 2024 to 4.2 percent in 2025, the First Abu Dhabi Bank, the largest bank in the UAE, said in a report released in February.
According to the report, the GCC's economic resilience will be supported by strategic investments, diversification and robust expansion in the non-oil sector, as the Middle East undergoes a shift from a major oil exporter to a global green energy hub.
Julia Roknifard, a senior lecturer at Taylor's University in Malaysia, said China is an anchor for Asean-GCC cooperation.
"China has already had a transformative effect on Asean and the wider Middle East, including GCC states, through its various infrastructure, trade and development initiatives, particularly through the Belt and Road Initiative guided by the Global Development Initiative," she said.
"But the relationship goes deeper than that, as China is increasingly engaged in technology sharing and shared industrialization, besides tourism, cultural exchange and longstanding people-to-people relationships," Roknifard added.
The expert called the trilateral cooperation platform a "Golden Triangle" of resources, manufacturing and consumers, which will continue to power the global economy despite severe trade disruptions due to recent US tariff policy.
Visitors attend the 21st China-ASEAN Expo at Nanning International Convention and Exhibition Center in Nanning, South China's Guangxi Zhuang autonomous region, Sept 24, 2024. - Photo: Xinhua file
Protecting global trade
The trilateral event comes amid heightened uncertainty in world economy.
In its April World Economic Outlook (WEO), the IMF downgraded its global growth forecast for 2025 to 2.8 percent, a hefty 0.5 percentage points decrease from its January estimate.
"Since the release of the January WEO Update, a series of new tariff measures by the United States and countermeasures by trading partners have been announced and implemented," the report said, calling the US reciprocal tariffs "near-universal" and "not seen in a century".
"The unprecedented imposition of tariffs by the US will disrupt regional and global trade and investment flows, as well as supply chains, affecting businesses and consumers worldwide, including those of the US," Asean economic ministers said in a joint statement issued following a special virtual meeting held on April 10.
US tariffs are also endangering $22 billion worth of non-oil exports of GCC economies, according to a recent policy brief by the Economic and Social Commission for Western Asia.
The UN agency said Bahrain is flagged due to its heavy dependence on aluminum and chemical exports to the US market, while the UAE could see disruptions to roughly $10 billion in US-bound re-exports, a result of US tariffs on goods originally produced in third countries.
Facing trade disruption, China, Asean and GCC members - as part of the Global South, can jointly catalyse more cooperation across other Global South countries by inspiring similar initiatives, said Bunn Nagara, director and senior fellow at the Belt and Road Initiative Caucus for Asia-Pacific (BRICAP), an independent non-governmental think tank based in Kuala Lumpur.
"Our success in cooperation is also a success for the Global South," the expert said. "Countries in Africa and Latin America share our aspirations."
"Part of our interests lies in protecting global trade, on which our respective national development programmes depend. This will also benefit other countries and regions around the world," he added.
Solid foundation
Cooperation among China, Asean and GCC countries has witnessed fruitful results in recent years.
In October 2023, the first Asean-GCC summit was held in the Saudi capital of Riyadh, marking a significant milestone in the relations between the two regional organisations, which forged ties in 1990.
The Asean-GCC Framework of Cooperation (2024-2028) was presented at the conclusion of the summit, which outlines measures and cooperation activities in such sectors as security, trade and investment, cultural exchanges and tourism.
In December 2022, the first China-GCC summit was held in Riyadh. China pledged to work with GCC countries to prioritise cooperation in energy, finance and investment, innovation, science and technology, aerospace, as well as language and cultural fields.
China and GCC countries are natural partners of cooperation with strong economic complementarities, Chinese leaders have said, as China has a vast consumer market and a complete industrial system, while the GCC, with rich energy resources, is embracing diversified economic development.
Meanwhile, China and Asean countries have fully completed negotiations on the Version 3.0 China-Asean Free Trade Area (Cafta), and will strive to formally sign the Cafta 3.0 upgrade protocol before the end of this year, economic and trade ministers from China and Asean said at a special online meeting on Tuesday.
"Over the past decade, economic ties between Asean and China have strengthened significantly, bolstered by shared participation in regional production networks and the rapid economic growth of both sides," Abdul Mui'zz Morhalim, chief economist at MIDF Amanah Investment Bank, told Xinhua.
The upcoming Asean-China-GCC summit is expected to establish an important mechanism for trilateral cooperation across the board.
The three sides will be able to synergize their economic and industrial policies, and have the potential to upgrade their cooperation in many fields, including clean energy and the digital economy, analysts said. - Xinhua