May 27, the first ASEAN-China-GCC Summit was held in Kuala Lumpur, the capital of Malaysia. The summit adopted the "Joint Statement", showing the strong willingness of all parties to actively participate in the construction of the "Belt and Road".
It is worth mentioning that overseas media such as the United States and the West closely followed the progress of the summit. Relevant reports pointed out that given the threat to ASEAN's exports to the US and the uncertainty about its future relations with the US, ASEAN countries are actively adjusting their diplomatic strategies, shifting from passive response to proactive action. Will Trump's tariff stick work again? What is the trade prospect between China and ASEAN? Observer Network had a dialogue with Southeast Asia expert and associate professor Feng Chao from the College of Oriental Languages at Shanghai International Studies University on this issue.
Scene of the ASEAN-China-GCC Summit Video screenshot
The Trump Tariff Stick Aims to Force ASEAN Countries to Take Sides
"The Trump administration's move to increase tariffs is essentially a probing strategy. This reflects the US's passive response against the backdrop of global hegemony strategic contraction and also reveals its deep anxiety over China's rise," said Feng Chao. As China continues to advance in the industrial chain and value chain, the US side has clearly felt the competitive pressure from China.
It is noteworthy that although this round of tariff policies appear to target multiple countries, their core target remains China. Whether it is multiple countries in Southeast Asia or traditional allies like the EU, Japan, and South Korea, the US's real intention is to force these countries to choose sides between China and the US, thereby building an economic encirclement against China. Despite the current phased compromise reached by China and the US on the tariff issue, we still need to remain highly vigilant and closely observe the possibility of policy reversals or a second round of tariff wars.
On April 21, the US Department of Commerce announced the final ruling results of the anti-dumping and countervailing duty investigation on photovoltaic modules from Cambodia, Malaysia, Thailand, and Vietnam. According to the ruling document, these four countries' photovoltaic products will be subject to high tariffs, with Cambodia's product tax rate as high as 3521%, Vietnam's 396%, Thailand's 375%, and Malaysia's 34%. This tariff policy will officially take effect in June this year.
Feng Chao analyzed that ASEAN usually adopts a flexible pragmatic attitude in dealing with issues like the Trump tariff policy, basically not choosing any countermeasures to confront the US directly. Unlike ASEAN's soft response, China's countermeasures this time are an inevitable choice based on the special situation. Faced with the US government's deliberate implementation of the trade big stick "open strategy," if no firm countermeasures are taken, China will fall into a strategically passive position in the global trade pattern.
"Community diplomacy" and "Belt and Road" diplomacy are playing their important roles." Feng Chao believes that this mutually beneficial and win-win cooperation model not only breaks the geopolitical narrative dominated by the West but also reshapes the international community's perception of China in practice. This new type of diplomacy is helping countries along the "Belt and Road" realize that China's rise brings development opportunities rather than threats.
Vietnam, Malaysia, Singapore, and other ASEAN member states have all stated they do not want to take sides, but in fact, they are deepening economic and trade cooperation with China. Whether it is actively participating in the "Belt and Road" initiative or jointly building the China-ASEAN community of shared destiny, etc.
There are landmark events proving this point recently. On the morning of May 26, the first international passenger train T8701 of the China-Vietnam international joint operation successfully arrived at Jialin Station in Hanoi, Vietnam, marking the official resumption of cross-border railway passenger services from Nanning to Hanoi after five years.
Feng Chao also emphasized that the first linkage between China, ASEAN, and the GCC is worth special attention. ASEAN, as the economic center of Southeast Asia, forms a trilateral linkage with the energy market of the Middle East and the manufacturing market of China, which helps dissolve tariff barriers and promote regional economic integration. This collaborative relationship has strong flexibility and inclusiveness, adapting to different countries' stages of development and industrial needs.
In addition, China's continuous cooperation with ASEAN can be seen as an important part of "Belt and Road" diplomacy, especially under the background of the 21st Century Maritime Silk Road. ASEAN, as a hub node of emerging economies, is becoming an important platform for the global reorganization of industrial chains. China's industrial transfer and cooperation with ASEAN not only help ASEAN countries' industrialization process but also provide opportunities for China's manufacturing transformation and upgrading.
Manufacturing, energy, and financial cooperation are the core topics of this summit.
From the "Joint Statement" jointly issued by the three parties, it can be seen that this summit focuses on six major cooperation fields: economic integration, connectivity, energy security and sustainability, digital transformation and innovation, food and agriculture, and cultural exchanges. Among them, the most urgent and valuable topic is to summarize, promote, and upgrade the complementary and non-exclusive Silk Road cooperation新模式, integrating China's manufacturing advantages, financial strength, and technological capabilities, combining ASEAN's vast market potential, manufacturing foundation, and industrial chain integration advantages, while coordinating the advantages of GCC member states in energy pricing and raw material supply. The aim is to build a highly resilient trade and manufacturing embedded system, contributing diverse wisdom to construct the Silk Road Five Connects pattern and solve the global Silk Road governance problems.
The traditional Southeast Asian geopolitical boundary restrictions have been broken, effectively resolving the dilemma of regional fragmentation. This is the core significance of this summit. This arrangement highlights the strategic considerations of global energy structure reconstruction, especially by incorporating resource-type countries into the cooperative system, strengthening ASEAN's regional energy security.
At the same time, to cope with the risk of the dollar system, RMB local currency settlement and currency swaps can be breakthroughs for deepening regional financial cooperation, providing security guarantees for funds.
"Industrial cooperation, energy trade, and financial synergy, these three topics actually constitute the practical path of China's 'Silk Road' trade."
Feng Chao believes that this new type of cooperative model with three-ring advances and retreats differs from the exclusive alliances favored by Western groups like G7. It aims to strengthen coordination and cooperation among Silk Road countries including China, ASEAN, and GCC member states, effectively buffering direct counter risks caused by international trade frictions.
ASEAN-GCC is a trade buffer zone between China and the West
Different from Europe and America, ASEAN countries tend to avoid ideological disputes, providing development space for Chinese enterprises. Under this background, reconstructing the industrial chain through third-party markets and building a new manufacturing ecosystem of the "Belt and Road" may become a feasible path for ASEAN countries to respond to current challenges.
Feng Chao said that there exists a structural mismatch between the commercial field and the political field in the current international landscape. This mismatch allows multinational corporations to avoid political suppression to some extent and seek development space through academic and production cooperation channels.
According to reports by Singapore's Lianhe Zaobao, Vietnam and other ASEAN countries are actively exploring innovative cooperation mechanisms for the "joint research Silk Road," promoting regional industrial chain depth integration and transformation through building a collaborative innovation system involving industry, academia, and research. Among them, the Vietnam-Singapore Industrial Park (VSIP) as a hallmark project has formed significant cluster effects. Latest data shows that by the end of 2024, this cooperation project has built 20 modern industrial parks across Vietnam, attracting cumulative investment exceeding $20 billion and creating over 300,000 jobs.
Chinese companies can also actively integrate into this trend, but Feng Chao pointed out that China has yet to establish a discourse system that can effectively support Chinese companies going abroad, especially in interpreting industrial cooperation under the Belt and Road Initiative and the globalization practices of Chinese enterprises, where there are theoretical shortcomings. The lack of this discourse system makes it difficult for China to effectively respond to the colonialist heritage and financial monopoly capitalism system led by the West in the international public opinion arena. These systems maintain an unjust international political and economic order through intellectual property hegemony, tariff barriers, and other asymmetric mechanisms.
As an important representative of the Global South, China, based on the historical experience of the Shanghai Cooperation Organization, is actively building a new regional cooperation paradigm centered on Southeast Asia as an economic strategic fulcrum. Southeast Asia is not only an excellent test field for Chinese enterprises' internationalization but also a key buffer zone to alleviate the pressure of the Sino-US strategic game. In responding to the trade war and financial war initiated by the US, China has always adhered to the strategic determination to avoid a "new Cold War," diluting the intensity of confrontation through deepening regional economic integration. This strategy of promoting stability through development has built a strategic depth for China's manufacturing sector to resist external shocks.
Chinese enterprises face the risk of legal weaponization when going abroad.
Particular attention should be paid to the fact that Chinese enterprises going abroad are not fully prepared to deal with trade frictions in the international competitive environment, and domestically, there lacks a more professional and practical enterprise outbound guide covering multiple national legal systems. Therefore, there is huge legal risk hidden here.
Under the impact of the current Trump administration's tariff policy, some Chinese enterprises going abroad are facing realistic challenges such as origin certification. The so-called "wash origin" model, which used to involve simple processing through third-party countries and then exporting, is no longer viable. Furthermore, many outbound enterprises still follow the business thinking of ten years ago and fail to fully recognize the profound changes in the Southeast Asian market environment and international trade rules.
Trump's current weaponization of tariffs basically foretells the possibility that legal tools may also be used as strategic weapons in the future, which has become an unavoidable trend. For Vietnam, Malaysia, Indonesia, and other ASEAN countries, they actually do not have the conditions to take sides. They are likely to adopt a superficially compliant strategy, responding to the US market with a relatively moderate posture, as they still maintain a high degree of economic dependence on the US market.
"We need to thoroughly understand the local institutional arrangements to avoid taking detours," said Feng Chao. Currently, some enterprises simply include informal payments like tips in historical costs or operating costs, which is far from being a long-term solution. Vietnam is currently advancing its anti-corruption process with a more complete regulatory system, and such gray operations will certainly become key targets for rectification.
"Unfortunately, there is a severe shortage of talents with language skills who can keep up with and interpret policies. Relying solely on English-speaking talent to obtain information through secondary English materials has obvious lag. When we learn about relevant policies, we often miss the optimal response time," Feng Chao added.
In this context, the road for Chinese enterprises to expand overseas markets still faces challenges. Regarding the Southeast Asian market, the growth rate of the middle class has not yet reached expectations, and the market capacity and purchasing power temporarily cannot accommodate the advantageous capacities of some industries in our country.
The top priority lies in improving overall trade quality.
Reportedly, in the first quarter of 2024, China's cumulative investment projects in Indonesia reached 21,022, with the number of Chinese-funded enterprises increasing to 255, covering multiple fields such as infrastructure, new energy, manufacturing, and digital economy, further consolidating China's position as the second-largest foreign investor in Indonesia.
Currently, China and Southeast Asia have formed a deeply coupled supply chain cooperation system. While continuing to expand in scale, Chinese enterprises should focus on improving trade quality to ensure substantial benefits. Feng Chao believes that although Chinese enterprises can suppress competitors like the US and Japan in price wars, the strategy of thin profits and large sales is not a long-term solution.
To achieve this goal, the key lies in building an efficient and smooth two-way circulation system. For example, in the garment industry, many multinational enterprises still rely on China's high-end fabrics and quality materials, setting up only processing stages in Vietnam. Reforming this industrial division model requires each enterprise to thoroughly study and optimize origin rules and establish more完善的 cooperation mechanisms through institutionalized consultations between the two countries' business departments. This not only helps avoid trade barriers on Vietnam's exports to the US but also enhances the competitiveness of the entire regional supply chain.
Feng Chao particularly emphasized that exports, as one of the three main drivers of China's economic growth, are of great importance. Faced with the complex external environment, we must enhance export competitiveness with greater efforts. This includes optimizing regional industrial chain layouts and improving bilateral trade system arrangements. Although the challenges are enormous, through deepening regional cooperation, Chinese enterprises are fully capable of achieving breakthroughs under pressure.
The intense confrontation between deglobalization and reglobalization.
A paradox in current global economic governance is that Western countries find it difficult to fundamentally deny the globalization process they once vigorously promoted. This set of globalization discourse system was built through their long-term efforts and indeed contains many positive meanings. However, when they discover that China has become the biggest beneficiary of globalization while they themselves are陷入 relative disadvantage, these countries begin to experience strategic regret. Thus, we see a bizarre phenomenon where they are attempting to deconstruct their own established globalization system and even demonize it as a monster.
However, the development model of developed Western countries has formed a path dependency, and their room for adjustment of industrial policies is limited. These countries, to delay their own industrial decline, prefer to transfer manufacturing to ASEAN, Latin America, or the Middle East rather than to countries with complete industrial chains, i.e., China. Their fundamental purpose is to avoid excessive concentration of manufacturing pricing power and supply chain security in a single economy.
Feng Chao believes that Trump's "deglobalization" policy may form a reverse driving force for us, pushing China to accelerate the establishment and construction of coordination mechanisms and mediation mechanisms with ASEAN and the GCC. Through the in-depth advancement of the tripartite framework, many Southern countries voluntarily draw on China's development experience, which also reflects China's soft power output.
This article is an exclusive article of the Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7509466104889213466/
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