ASEAN meets Gulf nations, China to cushion US tariffs

ASEAN, the regional association of Southeast Asian nations, held a three-way summit on Tuesday with China and six Gulf countries in efforts to expand economic engagement and bolster resilience as they grapple with a volatile global trading system due to US tariff hikes.

The 10-member bloc, the GCC and China collectively has a combined GDP of nearly $25 billion and a market of over 2 billion people.

“I am confident we can draw upon our unique attributes and shape a future that is more connected, more resilient, and more prosperous,” he told the summit, attended by Chinese Premier Li Qiang.

Li said the three-way cooperation would benefit all sides, contributing to economic development and peace in the region. China is ASEAN’s top trading partner, and has sought to present itself as a reliable ally to the region amid its rivalry with the US. The GCC supplies over a third of China’s crude oil imports.

Malaysia is the current chair of ASEAN, which also includes Brunei, Cambodia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Earlier Tuesday, Anwar told a separate ASEAN-GCC forum that partnership between the two blocs would be key to navigate an increasingly complex world due to economic uncertainty and geopolitical challenges.

Kuwait’s Crown Prince Sheikh Sabah Khalid Al Sabah said the two blocs, which held their first summit in Riyadh in 2023, would build on their momentum to deepen cooperation and “improve our ability to face crisis.” He said the GCC is ASEAN’s seventh largest trade partner, with total trade reaching $130.7 billion in 2023.

ASEAN has maintained a policy of neutrality, engaging both Beijing and the United States, but US President Donald Trump’s threats of sweeping tariffs came as a blow. Six of the bloc’s members were among the worst hit, with tariffs between 32% and 49%.

ASEAN is seen as tilting towards China, an international affairs analyst said.

Later in the day, ASEAN reached an understanding that any bilateral agreements they might strike with the United States on trade tariffs would not harm the economies of fellow members, Malaysia’s premier Anwar Ibrahim said.

“While proceeding with bilateral negotiations ..., the consensus rose to have some sort of understanding with ASEAN that decisions should not be at the expense of any other country,” said Anwar, who on Monday said he had written to Trump requesting an ASEAN-US meeting on the tariffs.

“So we will have to protect the turf of 650 or 660 million people,” he said of ASEAN.

The 10-member bloc on Tuesday released a five-year strategic plan to better integrate its economies, citing challenges that meant “carrying on business as usual will not suffice”.

At a dinner event late on Tuesday, China’s Li urged Gulf and ASEAN countries to remove trade barriers and expand liberalisation in the face of rising protectionism and unilateralism.

“We all need to firmly maintain the multilateral trading system with the World Trade Organisation as the core, and promote the creation of a stable and orderly international market environment,” he said.

ASEAN leaders also called for a temporary ceasefire in army-ruled Myanmar to be expanded nationwide, to enable warring sides to build trust and work towards convening dialogue.

Myanmar has been in crisis since its military overthrew an elected civilian government in 2021, triggering pro-democracy protests that morphed into a widening rebellion, with more than 3.5 million people displaced.

A devastating earthquake in March that killed more than 3,800 people led to a series of temporary ceasefires in affected areas of Myanmar, but the military government has continued air strikes and artillery attacks.

“We further called for the sustained extension and nationwide expansion of the ceasefire in Myanmar,” ASEAN leaders said in a statement.

Beijing to collect $22 billion debt from 75 countries

China will turn from a capital provider to a debt collector of 75 developing countries, including the world’s poorest and most vulnerable, this year as they are due to pay back a record USD 22 billion loans owed to Beijing, according to data released by an Australian think tank. Bills coming due from its Belt and Road lending surge in the 2010s now far outstrip new loan disbursements, it added. How China’s shift to chief debt collector will impact its reputation as a development partner remains to be seen.