From turbulence to trust

The future of Asia-Pacific trade will depend not only on growth or market expansion, but on the ability of regional states to cooperate more effectively

The world is experiencing turbulence as a result of an increasingly unpredictable global political situation. The crisis in the Middle East, which has led to difficulties at the Strait of Hormuz, has further worsened the situation.

Given the scarcity of viable alternative routes, any sustained disruption to this choke point carries profound consequences for global energy markets and, by extension, international economic stability.

Against this complex backdrop, the two-day APEC Ministers Responsible for Trade Meeting in Suzhou, East China's Jiangsu province, on May 22-23 played its role in advancing the realization of "Building an Asia-Pacific Community to Prosper Together" — the theme of the APEC "China Year". The APEC Economic Leaders' Meeting is scheduled to be hosted in Shenzhen, South China's Guangdong province, in November.

A key challenge for Asia-Pacific economies is how to continue upholding openness, strengthening cooperation and maintaining a rules-based international trading system amid the current global fragmentation.

As is widely recognized, contemporary global trade is no longer shaped exclusively by tariff structures and market access arrangements; it is increasingly conditioned by geopolitical competition, national security imperatives, industrial competition and a range of other considerations that, in effect, undermine the integrity of the existing multilateral order.

However, the principles of non-discrimination, transparency, predictability and rules-based dispute settlement remain highly relevant, particularly for developing economies that do not always possess strong bargaining power in bilateral relations. As some countries increasingly resort to unilateral measures to narrow preferential arrangements, the risk of fragmentation continues to grow. If left unaddressed, global trade may shift from being an open space for cooperation into an arena of bloc-based competition.

In the context of the relations between the Association of Southeast Asian Nations and China, this is highly relevant. According to China's General Administration of Customs, trade between China and ASEAN reached 7.55 trillion yuan ($1.12 trillion) last year, surging 8 percent year-on-year.

This growth is being formalized through agreements such as the ASEAN-China Free Trade Area 3.0 Upgrade Protocol. Record GDP and export growth in Malaysia, and successful initiatives such as the China-Indonesia implementation of cross-border QR payments, are, in large part, due to the stability of ASEAN-China relations.

And this year marks the fifth anniversary of the ASEAN-China comprehensive strategic partnership. ASEAN-China relations carry significant political weight, as they involve one of the world's most strategically important regions and one of the leading global powers. The scale and importance of this relationship have been managed on the basis of openness, consultation and balance. For ASEAN, the principal challenge lies in maintaining collective coherence. Therefore, ASEAN needs to strengthen its internal mechanisms to ensure that cooperation with China remains aligned with the broader interests of the region as a whole.

Meanwhile, China's cooperation with ASEAN is genuinely mutual and beneficial. China has also expressed support for ASEAN-led mechanisms, respect for consensus-based processes and a continued commitment to avoiding approaches that could create perceptions of dominance. In the current context of unilateralism pursued by the United States, China continues to serve as a guardian of the multilateral system and defender of institutions such as the World Trade Organization.

In this regard, ASEAN-China relations may serve as an example of how regional cooperation need not undermine multilateralism. This assessment is further substantiated by empirical evidence. The State of Southeast Asia: 2026 Survey Report released by Singapore's ISEAS-Yusof Ishak Institute reveals that 52 percent of ASEAN respondents indicated they would align with China over the US, with the latter preferred by 48 percent. This finding reflects a discernible shift in regional strategic orientations that policymakers cannot afford to overlook. China's contribution to regional development is gradually understood and recognized by more people from ASEAN countries.

ASEAN-China relations set an example for regional cooperation and beyond. Accordingly, all stakeholders should also focus on the Asia-Pacific policy agenda that can be oriented toward strengthening, rather than eroding, the multilateral system. Regionalism remains important, but sound regionalism must be open and inclusive.

Developed countries should not dictate terms to smaller ones or compel them to conform to their preferences. Regional cooperation can serve as a policy laboratory for developing higher standards, enhancing transparency, and facilitating the participation of developing economies. Several policy priorities warrant focused attention in this regard.

First, regulatory transparency should be enhanced. In modern trade, barriers do not always take the form of tariffs. Many obstacles arise through technical standards, customs procedures, certification rules, investment policies, environmental provisions, digital requirements and product safety regulations.

When regulations lack transparency, other countries may perceive them as a form of disguised protectionism. Therefore, Asia-Pacific economies need to strengthen mechanisms for regulatory consultation, information exchange and policy notification before new measures broadly affect trading partners.

Second, digital governance should be established as a central policy priority. Digital trade extends beyond e-commerce to encompass cross-border data flows, consumer protection, cybersecurity, artificial intelligence, electronic signatures and digital trade documentation. Each country has a legitimate interest in safeguarding data security and preserving digital sovereignty.

However, if countries develop closed and mutually incompatible regulatory frameworks, the region's digital economy risks becoming increasingly fragmented. Accordingly, digital policy should seek to strike an appropriate balance: ensuring security without fostering isolation, promoting innovation while maintaining accountability and preserving openness while protecting the public interest.

Third, the green economy agenda can be governed in an equitable manner. Carbon standards, clean energy policies, sustainable supply chains and environmental certification have become increasingly important elements of contemporary trade policy.

Nevertheless, green standards should not be employed as instruments to constrain the development prospects of developing countries, which continue to require time, financing, technological support and sufficient policy space to undertake a just and effective transition.

Regional cooperation must therefore actively promote technology transfer, capacity-building, the mutual recognition of credible environmental standards and targeted support for small- and medium-sized industries to ensure they are not left behind in the green transition.

Ultimately, the future of Asia-Pacific trade will depend not only on growth or market expansion, but on governance, trust and the ability of regional states to cooperate transparently and equitably.

Regional integration must reinforce, rather than weaken, the multilateral system. ASEAN and China can continue to demonstrate that regional cooperation can support global stability and help shape a more stable, just and inclusive international order.

The author is the head of the ASEAN-China Research Center at the University of Indonesia and a Qiushi scholar at the National Institute of Ethics and Moral Practice at Renmin University of China.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.