As ASEAN’s oldest dialogue partner, China has long been a central figure within the architecture of security and prosperity in Southeast Asia. But this relationship has never been easy.
Close economic cooperation comes amid ongoing geopolitical tensions, which have only intensified as maritime disputes within the South China Sea and strategic competition between the U.S. and China intensify. Below is the present state of those relations and what either side are doing to keep up regional stability.
Economic basis and the issue of the South China Sea
When it involves economics, it’s hard to argue with the numbers. China has been ASEAN’s largest trading partner for over a decade, and bilateral trade continues to set recent records.
The full implementation of the Regional Comprehensive Economic Partnership (RCEP), which entered into force in 2022, has further accelerated this process by reducing tariffs, easing non-tariff barriers and creating more flexible rules of origin that more closely knit regional supply chains.
Chinese investment in ASEAN countries has also increased, especially in infrastructure, green energy and the digital economy. The Jakarta-Bandung Railway, which began business operations in 2023, is probably the most visible symbol of this infrastructure cooperation.
However, the South China Sea stays a significant obstacle. China’s nine-dash claim overlaps with the exclusive economic zones of 5 ASEAN members: Vietnam, the Philippines, Malaysia, Brunei and Indonesia.
The Declaration on the Conduct of Parties within the South China Sea (DOC), jointly adopted in 2002, was not enough to stem friction. Negotiations on a more binding Code of Conduct (COC) have dragged on for years and have stalled attributable to fundamental disagreements over the geographic scope of the COC, its legal status and the way disputes will actually be resolved.
In early 2024, tensions rose sharply after incidents between Chinese and Filipino ships near Scarborough Shoal and Second Thomas Shoal. Philippines under President Ferdinand Marcos Jr. responded by adopting a more assertive posture by deepening their defense alliance with the United States under the Enhanced Defense Cooperation Agreement (EDCA).
Beijing interpreted this as using ASEAN as a substitute platform for US-China rivalry. Meanwhile, China continued to construct military infrastructure on artificial islands inside its territory, a move seen by several ASEAN members as provocative and damaging to regional trust.
ASEAN’s collective response was to keep up the lines of centrality and neutrality. High-level meetings, including the forty third ASEAN Summit in Jakarta in September 2023 and a series of foreign ministerial meetings in Vientiane in 2024, reflect ongoing efforts to stop escalation.
In these fora, ASEAN countries have consistently called on Beijing to speed up the conclusion of an efficient and legally binding COC and to refrain from actions that would further complicate the situation.
Indonesia holds a special place in all this. As the most important maritime country in Southeast Asia and residential to the Natuna Islands bordering China’s claims, Indonesia has a direct stake in managing the South China Sea issue.
Using the “one ASEAN family” approach, the Indonesian government is actively facilitating dialogue between China and the claimant countries. Indonesian diplomacy on this front has never been interventionist. It emphasizes mutual trust, respect for international maritime law in accordance with UNCLOS 1982 and avoidance of military confrontation.
At the forty eighth ASEAN Summit in Cebu in 2026, Indonesia reaffirmed this position, insisting that discussions on the South China Sea remain constructive and don’t crowd out progress in economic cooperation.
Beyond disputes: where cooperation began
ASEAN-China relations go far beyond maritime hotspots, and in several areas cooperation has been truly substantive.
The 2020–2022 Covid-19 pandemic has modified the way in which either side take into consideration common vulnerabilities. During this era, China provided vaccines, medical equipment and digital tracking technology, while ASEAN developed rapid response mechanisms for public health emergencies. Experience has shown that non-traditional security threats require collective responses.
On climate and energy, China and ASEAN are cooperating on the energy transition through initiatives comparable to the ASEAN Energy Network, which incorporates Chinese investments in solar and wind projects in Laos, Cambodia and Vietnam.
Human resources development is one other pillar. China recurrently provides scholarships and training to civil servants, academics and journalists from ASEAN countries.
The Lancang-Mekong Cooperation Program, which brings together China, Cambodia, Laos, Myanmar, Thailand and Vietnam, has made tangible progress on sustainable development within the Mekong sub-region, including managing transboundary water resources, combating illicit trade and developing tourism.
What else must occur
The foremost unresolved problem is COC. Until the project is accomplished, the chance of misunderstandings and unplanned incidents at sea stays high. ASEAN leaders must proceed to strengthen domestic solidarity to avoid being torn apart by bilateral pressure from Beijing.
At the identical time, China must reveal real flexibility and a substantive commitment to international law, including a willingness to take arbitration outcomes seriously, even when it rejects them in principle.
Track II and Track I.5 dialogues conducted through institutions comparable to CSCAP and the ISEAS-Yusof Ishak Institute offer an area to explore creative solutions beyond the constraints of formal diplomacy.
The greater picture is that this: ASEAN countries cannot and is not going to make a choice from China and the United States. ASEAN’s central location means ensuring that the region doesn’t change into a battleground for excellent power competition.
China, as an emerging regional power, has a corresponding responsibility to reveal that its rise doesn’t threaten the sovereignty of its neighbors and that it’s investing in protecting the regional order, not in unilaterally transforming it.
Peace in Southeast Asia will ultimately rely on differences being resolved on the negotiating table fairly than at sea.
