Energy resilience

China-ASEAN cooperation can provide firmer support for lasting peace and common development in the region

The China-ASEAN Foreign Ministers’ Meeting was held in Manila on July 22. Marking the fifth anniversary of the comprehensive strategic partnership between China and the Association of Southeast Asian Nations, the meeting adopted the China-ASEAN Foreign Ministers’ Joint Statement on Address-ing the Regional Impacts of Developments in the Middle East and Strengthening Regional Energy Cooperation, which proposes closer collaboration on power interconnectivity, energy supply chains, clean, low-carbon and renewable energy, and energy technological innovation.

For China and ASEAN, energy security and the green transition have become increasingly inseparable. The question is no longer whether to transition, but how to guarantee stable supply, affordable prices and the necessary development space in the process.

The conflict in the Middle East has commanded close attention to the region because fluctuations in oil and gas prices, shipping and insurance costs are quickly transmitted to production and daily life. Conventional energy will remain important for a considerable length of time, yet simply diversifying import sources or expanding reserves cannot eliminate structural risks. Developing domestic renewables reduces dependence on external fuels, but the variability of wind and solar power requires stronger cross-border grids, storage and dispatch capacity. The green transition, in this sense, is not an add-on to energy security but a reshaping of it — toward a regional energy system with more diverse sources, more flexible regulation and the capacity for mutual support when shocks occur.

Cooperation between China and ASEAN already rests on a solid foundation. According to the data released by the National Energy Administration in November 2025, since China and ASEAN began electricity trade, cumulative trading volume has exceeded 75 billion kilowatt-hours, more than 90 percent of it green electricity; by the end of 2024, cumulative investment in their jointly developed hydropower, wind and photovoltaic projects had grown more than fivefold over 2014 and installed capacity more than 15-fold. The China-Laos 500-kilovolt power interconnection project, operational since April, has a two-way transmission capacity of 1.5 million kW and is expected to deliver about 3 billion kWh of clean electricity a year.

Still, measured against the two sides’ growing energy demand, current trading volumes and mutual support capacity leave much room for improvement.

The pressure comes first from the gap between ambition and reality. According to the eighth ASEAN Energy Outlook, renewables accounted for 15.6 percent of ASEAN’s total primary energy supply in 2022. The ASEAN Plan of Action for Energy Cooperation (2026-30) raises the 2030 target for that share to 30 percent, while proposing a share of 45 percent for renewables in installed power capacity and a 40 percent reduction in energy intensity, which is the quantity of energy required per unit output or activity, from the 2005 level. Industrialization and urbanization are still advancing, so new energy demand and emissions cuts must be addressed together. Based on the eighth ASEAN Energy Outlook, the ASEAN Center for Energy has estimated that meeting the region’s transition goals requires about $150 billion in investment annually.

The power grid is one of the most prominent weak links. According to the ASEAN Power Grid Financing Initiative launched by the Asian Development Bank, the World Bank, the ASEAN Secretariat and the ASEAN Center for Energy, cross-border interconnection capacity now stands at about 7.7 gigawatts and needs to be more than doubled by 2040. The existing power trade rests mostly on bilateral arrangements, with dispatch rules, settlement, project access and green power certification not yet fully aligned. A completed transmission line does not mean electricity can flow smoothly over a wider area. Without unified planning and stable rules, clean power from resource-rich areas cannot be transmitted out, load centers may still face tight supply at peak hours and interconnection’s security value cannot be fully unlocked.

Likewise, one cannot simply blame a shortage of capital for the financing difficulties. Clean energy and cross-border grids involve large investments and long payback periods; investors care more about whether power purchase agreements will be honored, whether pricing is stable, and how currency and policy risks are shared. Some projects are technically feasible but temporarily stalled because their revenue structures are unclear. Moreover, member states differ markedly in resources and development stage. For some, the transition must also provide jobs, industrial upgrading and electricity access. If cooperation means only equipment procurement and construction, without generating local technical capacity, jobs and tax revenue, projects will struggle to win lasting public support.

In the next stage, cross-border grids should be built as regional public goods. China-ASEAN cooperation can align more closely with ASEAN grid planning, launch multilateral power trading pilots in subregions where conditions are ripe, and gradually coordinate rules on dispatch, settlement and green electricity certification. The priority is not only building new lines but also raising the utilization of existing ones and improving emergency coordination during extreme weather or supply disruptions. Existing projects such as the China-Laos link can provide experience for broader integration, although specific arrangements should respect ASEAN centrality and each country’s regulatory authority, proceeding step by step.

Project cooperation should also shift from engineering delivery to joint capacity building. China has practical experience in large-scale renewable integration, storage, smart grids and equipment manufacturing, while ASEAN has abundant solar, wind, hydro and geothermal resources and diverse scenarios such as island power supply and cross-border transmission. Combining the two does not mean simple replication; technologies can be adapted to local grid conditions, climate and energy demand, with local procurement, training, operation and maintenance, and joint research built into project design.

More targeted financial arrangements can effectively reduce early-stage risks. As the joint statement notes, the China-ASEAN Investment Cooperation Fund should be used properly, with financial institutions encouraged to join regional energy projects. Policy-based, development and multilateral institutions can lead in supporting feasibility studies, cross-border infrastructure and risk guarantees, thereby attracting long-term private capital. Contract transparency and environmental and social standards can also be improved so that returns, responsibilities and risks are all identifiable. Rather than chasing short-term deal numbers, the two sides should cultivate demonstration projects that are financially sustainable, benefit communities and can withstand economic cycles.

Regional policy communication matters as well. The two sides can use existing platforms such as ministerial meetings and the China-ASEAN Clean Energy Cooperation Center to build regular mechanisms for risk assessment and emergency communication, sharing timely information on markets, major projects and technical standards. For industrial chains, maintaining openness, stability and diversity is a more effective way to enhance security than relying on any single source. On green rules, it is essential to advance the alignment of carbon accounting, green certificates and product standards with respect for each country’s development stage, to lower cross-border business costs and prevent regulatory fragmentation that may slow the transition.

Ultimately, cooperation will be judged by real results: whether residents get more stable and affordable electricity, whether businesses suffer less from price volatility, and whether participating countries can accumulate local technology and jobs. True energy resilience means not isolating oneself from world markets, but having more choices and stronger adaptive capacity through open cooperation. The Manila joint statement has pointed the way. If this consensus is turned into functioning grids, sustainable projects and compatible rules, China-ASEAN energy cooperation will provide firmer support for lasting peace and common development in the region.

The author is an assistant researcher at the Chongyang Institute for Financial Studies 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.