Looking at China through an ASEAN lens

20 Mar 2024
Posted By: ACBC

Looking at China through an ASEAN lens

By David Olsson

Recognising the challenges and grasping new opportunities for the Australia – China relationship has always been a topic at the forefront of our minds. Earlier this month, the ASEAN-Australia Special Summit held in Melbourne provided insights into how Australia’s regional neighbours are framing their engagement with China.

I was fortunate to attend a number of business-related events, and to hear from regional leaders and CEOs from Australian and South East Asian businesses. The discussions were dynamic and filled with promise. The enthusiasm for engagement and the opportunities ahead were reminiscent of the excitement that surrounded the emergence of the China opportunity a decade or more ago.

There is no denying that ASEAN presents Australian business with similar growth opportunities for growth that the now more developed markets of China offered in those earlier years.

The recent announcement by the Australian government of a comprehensive package of initiatives, including financing facilities, new regional landing pads, business champions, and business missions is both exciting and poised to catalyse two-way private sector trade and investment into the region.

However, it’s essential to acknowledge that achieving the ASEAN ambition will require sustained effort.

As mentioned last month in the context of our broader China relationship, seizing this opportunity demands a mindset change among Australian corporates. It is no longer just about exporting more commodities into the region or attracting more tourists or students.

An editorial in the AFR editorial summarised the situation: “With many ASEAN members committed to a net zero emissions target by 2050, there are tremendous opportunities for Australia to assist with the region’s energy transition needs, not only as a source of renewable energy supply but also via technology and financing for the infrastructure to support the transition. There are also opportunities in healthcare and the digital economy.”

These same opportunities have been identified by Chinese companies as well.

ASEAN now stands as China’s largest trading partner, with capital, expertise, and people rapidly moving between them to drive growth and seize new opportunities. Landmark agreements like the ASEAN-China Free Trade Agreement (ACFTA) and the Regional Comprehensive Economic Partnership (RCEP) have accelerated trade growth through tariff cuts and closer supply chain links.

China and ASEAN are reshaping their supply chains, using trade and investment into the region to build new value chains, build economic and trade cooperation zones, and create local jobs.

While discussions around China’s relationship with ASEAN were prevalent at the Melbourne Summit, the broader Australian commentary tended to focus on maritime security issues and ways in which each nation was hedging its China relationship – overlooking the fact that economic cooperation with China is driving economic integration, cooperation, and regional growth.

This presents a new and compelling opportunity for Australian businesses, namely, engaging with China in ASEAN countries.

Deepening engagement with ASEAN and its member states is a priority for Australia. However, let’s explore our strong China business relationships and hard-earned international business capabilities to uncover opportunities in the region.