ASEAN-China trade: a recipe for mutual benefits and a side of prosperity

Do you believe that God created the world, and everything else is made in China? What makes a country the ultimate trading partner, and how has China consistently remained Southeast Asia’s largest since 2009?

The non-stop US-China trade war and shifting global policies have pushed businesses—large and small—to rethink strategies. For Filipinos and Southeast Asians, this highlights China's vital role in regional commerce.

E-commerce giants like Lazada, Shopee, and Alibaba have further strengthened this bond, delivering quality Chinese products directly to local businesses and end-users at competitive prices. These platforms connect manufacturers and consumers, solidifying China's contribution to both virtual and physical markets.

As trade relationships deepen, the mutual benefits of collaboration shine through. Here are five reasons why China remains a cornerstone of Southeast Asia’s economic growth.

Strong ASEAN China trade relations

China’s partnership with ASEAN began in 1991 and matured into a full Dialogue Partnership by 1996. Since then, trade volumes have quadrupled, underpinned by agreements like the ASEAN-China Trade in Goods Agreement. These sustained efforts have built a foundation of trust and cooperation. China’s predictable trade policies provide stability and confidence for businesses, enabling both large corporations and Micro, Small, and Medium Enterprises (MSMEs) to thrive, while consumers benefit from affordable goods across various sectors that meet their everyday needs.

Competitive pricing and diverse supply chains

China’s unmatched manufacturing scale keeps production costs low, creating a vast and diverse supply chain that feeds into Southeast Asia’s growing markets. This cost efficiency enables businesses to achieve higher profit margins, empowering MSMEs and major enterprises to remain competitive in their respective industries. At the same time, consumers enjoy affordable products that dominate local markets, making Chinese goods an attractive and accessible option for personal use.

China Foreign Direct Investments and opportunities

China plays a dual role as both a trading partner and a significant investor. In 2019, Foreign Direct Investment (FDI) flows from China to ASEAN reached $9.1 billion, strengthening local economies and driving integration. These investments bring infrastructure development and joint ventures, making the region more attractive for business expansion. As a result, consumers benefit from the job creation and increased economic activity that elevate living standards and offer new opportunities.

Reliability amid global trade tensions

Uncertainty surrounding US trade policies, which shift with each new administration, has led many to seek more stable alternatives. In contrast, China has consistently provided a reliable trading framework, offering reassurance to businesses and consumers alike. For businesses, this stability reduces risks in sourcing materials and exporting goods, while consumers enjoy a steady flow of imported products, even during global disruptions, fostering confidence in supply chains.

Strategic proximity and cost-effectiveness

China’s geographical proximity to Southeast Asia offers logistical advantages, including lower shipping costs and shorter delivery times compared to trading with the US or Europe. These factors reduce shipping costs, enabling businesses to turn over inventory faster and cut operational expenses. Consumers benefit from faster delivery, which ensures markets remain consistently stocked with fresh, affordable, and innovative products without inflated prices.

China’s economic influence in Southeast Asia is built on decades of cooperation, strategic alignment, and reliability. For centuries, China has been a partner in the trade of ancient goods and porcelain with Southeast Asian nations. In the Philippines, trade ties with China date back to the pre-Spanish colonial period, laying the foundation for enduring partnerships. These deep cultural connections foster mutual understanding and collaboration on both personal and large-scale levels.

With this rich history of exchange, ASEAN and China have fostered a bond stickier than rice and noodles, allowing them to prosper side by side—sharing a meal that symbolizes the unity and growth of a relationship stronger than any other region. As the trade dynamic continues to evolve, Southeast Asia’s thriving trade partnership with China stands as a testament to the power of collaboration over confrontation, grounded in trust and shared goals. In navigating today’s complex trade landscape, these five reasons highlight why China is not just a trading partner, but a cornerstone of Southeast Asia’s economic growth.