Is China's surging economic influence really flooding Southeast Asian markets with cheap goods, threatening local industries—or could it actually be a game-changer for growth? Let's unpack this hot-button topic and why those concerns might just be missing the bigger picture.
For years, the intense rivalry and commercial tensions between China and the United States have been redrawing the world's economic landscape and manufacturing hubs. But with their recent preliminary trade deal in the works, a few nations in Southeast Asia are bracing for change: Chinese products could soon face fewer barriers from US tariffs, potentially ramping up the pressure on homegrown businesses in ASEAN and similar emerging economies. But hold on—here's where it gets controversial: a deep dive into the intricate web of China-ASEAN supply networks and China's internal shake-up suggests these anxieties are largely unfounded.
Picture this: China and ASEAN aren't just neighbors; they're partners in a long-haul relationship built on shared benefits and intertwined destinies. For 16 straight years, China has topped the charts as ASEAN's biggest trading buddy, while ASEAN has claimed that title for China over the last five. Their trade isn't just growing—it's evolving, with a richer variety of goods passing back and forth.
As their collaboration grows stronger, the industrial and supply chains of both sides have locked into a perfect synergy, creating what experts call 'being in each other's chains.' Think of it like puzzle pieces fitting seamlessly: in areas like semiconductors, flat-panel displays, lithium batteries, auto components, and computer parts, this integration is driving impressive progress. By bringing in high-tech components and advanced intermediates from China, ASEAN countries are leveling up their own industries, climbing higher on the value ladder, and bolstering the region's overall supply web. This opens up doors for even more advanced partnerships down the line.
And this is the part most people miss: China's cutting-edge sectors are evolving beyond just exporting finished goods to overseas markets. Instead, they're focusing on 'ecosystem co-building'—fostering international production setups and supply systems that help Southeast Asia speed up its own modernization and innovation. The future looks expansive, and frankly, more promising than ever.
Fast-forward to 2024: China's GDP per person has crossed the $13,000 mark, and retail sales are climbing steadily, solidifying its status as the planet's second-biggest consumer powerhouse. With cities expanding and wages rising, the middle class is poised to balloon from about 400 million today to roughly 700 million by 2035—a massive pool of shoppers with serious spending power waiting to be tapped.
For China's economy, this booming home market acts as a safety net against worldwide ups and downs, serving as a cornerstone for steady progress. In a world full of geopolitical strains, growing trade barriers, and unpredictable demand from abroad, strong local consumption offers real strategic advantages. Companies can test new products, refine tech, and establish brands right here at home. Plus, this consumer boom helps absorb excess production, keeps jobs and salaries stable, and cuts down on over-dependence on foreign buyers.
Looking ahead, this focus on homegrown demand will take center stage in China's 15th Five-Year Plan from 2026 to 2030. Imagine policies that spread wealth more evenly, beef up social protections, and tweak spending habits to ignite more buying power—making the domestic market even larger and more robust. This isn't just fueling China's own vitality and bounce-back ability; it's creating a ripple effect of stable demand that benefits nearby partners, like ASEAN. In this scenario, China steps up as a 'stabilizer'—a force for calm—rather than a 'shock source' that disrupts the status quo.
ASEAN sits high on China's diplomatic priority list as a neighbor, and it's a cornerstone for top-tier Belt and Road initiatives. This year marks the 15th anniversary of the China-ASEAN Free Trade Area, along with the rollout of its upgraded version 3.0. Faced with a shifting global trade scene, China is doubling down on mutually beneficial ties with ASEAN. Why? Because they share deep-rooted industrial strengths that complement each other, powerful supply chain connections, and aligned goals for progress. Their partnership is branching out from basic trade into joint ventures in digital tech, eco-friendly development, electric vehicles, and other frontier areas. By tapping into agreements like the Regional Comprehensive Economic Partnership, they can slash trade hurdles and supercharge regional supply chain unity and productivity.
Peering into the future, China won't resort to cutthroat tactics that hurt its neighbors. It plans to stick to all-encompassing strategic teamwork with ASEAN: jointly pioneering fresh industries, scouting untapped markets, and crafting a regional economy that's tougher, more inventive, and self-reliant. This strategy counteracts global instability and nurtures a more independent, secure industrial base in the region. It also fits right into the wider wave of economic globalization and the dream of a shared human community.
Peng Bo is a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, and Wang Dongman is a research associate at the same institution.
The opinions expressed here do not necessarily reflect those of China Daily.
But here's the real kicker: is China's approach truly a win-win, or are there hidden risks we haven't considered? For instance, some critics argue that even with strong partnerships, China's massive domestic market might still draw talent and resources away from ASEAN, potentially slowing local innovation. Others wonder if this 'stabilizer' role could mask underlying imbalances in trade, favoring China in the long run. What do you think—does this paint a rosy picture of collaboration, or is there a darker side to China's economic rise in Southeast Asia? Share your take in the comments: do you agree these fears are overstated, or do you see real threats ahead? Drop us a line at opinion@chinadaily.com.cn or comment@chinadaily.com.cn if you'd like to contribute your expertise or thoughts on this story!
