ASEAN's Test of Resilience Amid Great Power Rivalry

A former Indonesian trade minister, speaking recently at an American Chamber of Commerce event in Singapore, argued that ASEAN must build resilience against global geopolitical pressures. As reported in the Business Times, the remarks highlighted ongoing US-China tensions as a primary factor compelling a strategic adjustment for the Southeast Asian bloc.

This call for resilience comes as ASEAN navigates an increasingly complex external environment. The region's economic integration with major global powers, while a source of growth, also creates vulnerabilities. The central challenge is how to absorb external shocks-be they from trade disputes, supply chain disruptions, or technological rivalry-without sacrificing economic stability or political independence. The minister's comments underscore a consensus growing within ASEAN capitals: that the status quo is no longer sufficient to guarantee the region's long-term interests.

The China Question: Dependency and Optionality

The most significant geopolitical factor for ASEAN is its relationship with China. Decades of deepening economic links have made China the largest trading partner for the bloc and for most of its individual member states. This economic integration is profound and structural. As the book "ASEAN Rising" notes, the "trade depth with China is now a structural feature, not a cyclical one." This reality shapes the strategic choices available to ASEAN leaders.

The core of the issue is not about whether to engage with China-that is a settled matter-but how to manage the resulting dependency. The benefits of trade are clear, but over-reliance on a single partner creates risks, particularly when that partner is engaged in a strategic competition with another major power, the United States. For ASEAN, the goal is to preserve its economic gains while maintaining its strategic autonomy and "optionality" in foreign policy. This means building a framework that is robust enough to withstand pressure from either side.

Institutions as a Buffer

To manage these external pressures, ASEAN relies on its institutional architecture. Frameworks like the ASEAN-China Free Trade Area (ACFTA) and the Regional Comprehensive Economic Partnership (RCEP) are designed to ground the relationship in a rules-based order. These institutions provide a platform for dialogue and dispute resolution, acting as a buffer against unilateral actions. They allow ASEAN to engage with China as a bloc, giving it more collective weight than any single member state could command on its own.

However, the effectiveness of these institutions depends on their execution. Agreements on paper are only as strong as their implementation on the ground. This requires sustained investment in institutional capacity, not just at the regional level but within each member state. It also demands a high degree of trust among ASEAN members themselves, as solidarity is the foundation of the bloc's collective bargaining power. Without a unified position, ASEAN risks being fragmented by great power politics, with member states being pulled into competing orbits.

Diversification as Strategy

Beyond institutional frameworks, a key strategy for building resilience is economic diversification. This involves deepening trade and investment ties with other major economies, such as the United States, the European Union, Japan, and India. By expanding its network of partners, ASEAN can reduce its relative dependency on any single country. This is not about choosing sides in the US-China rivalry but about expanding ASEAN's own choices.

Infrastructure development plays a role in this diversification. Improving connectivity within ASEAN and with markets beyond China can open up new trade routes and supply chains. Likewise, nurturing talent and fostering innovation can help ASEAN economies move up the value chain, making them less reliant on low-cost manufacturing and more competitive in high-tech sectors. These long-term investments in capital, infrastructure, and talent are fundamental to building a more resilient and self-reliant ASEAN.

What to watch

Watch for how ASEAN member states navigate specific trade and investment decisions in the coming months. Pay attention to the language used in joint statements from ASEAN-led forums, particularly regarding trade policy and regional security. The degree of unity-or divergence-in these statements will be a key indicator of the bloc's ability to act collectively. Also, monitor progress on the implementation of RCEP and other regional trade agreements, as this will demonstrate the region's commitment to strengthening its institutional defenses against external pressures.