China pushes trade ties with ASEAN as South China Sea tensions simmer

In Vientiane, Laos, Chinese Premier Li Qiang stood before the ten-member Association of Southeast Asian Nations and spoke about markets, not militaries. The timing was deliberate. Just days before the summit, Chinese and Philippine vessels had collided at sea again. Vietnam had reported that Chinese forces had assaulted its fishermen in contested waters. Yet Li's opening remarks steered toward economics: the benefits of deeper trade integration, the need for market coordination in an uncertain world, the promise of an expanded free trade pact that could reshape the region's commercial landscape.

The contrast was not accidental. China's economic weight in Southeast Asia has become almost impossible to ignore. Since 2010, when Beijing and ASEAN first signed a free trade agreement, bilateral trade has surged from $235.5 billion to $696.7 billion last year. China is now ASEAN's largest trading partner and its third-biggest source of foreign investment. That gravitational pull shapes everything that happens in these summit rooms—including what does not get said.

The two sides announced progress on upgrading their trade pact, with negotiations expected to conclude by next year. The expanded agreement would cover supply chain connectivity, digital economy development, and green energy initiatives. For ASEAN's 672 million people, the economic case is straightforward. For Beijing, the timing sends a message: even as tensions simmer in the South China Sea, the relationship's commercial foundation remains solid and deepening.

Yet the disputes are real and worsening. Vietnam, the Philippines, Malaysia, and Brunei all have overlapping territorial claims with China in the South China Sea. China claims sovereignty over virtually all of it and has grown more aggressive in enforcing those claims. This year alone brought repeated clashes between Chinese and Philippine vessels. Last week, Vietnam accused Chinese forces of assaulting its fishermen in a disputed area. Beijing's response has been consistent: it was defending its offshore territories. China has also sent patrol boats into waters that Indonesia and Malaysia consider their exclusive economic zones.

For years, ASEAN and China have negotiated a code of conduct to govern behavior in these strategic waters, but progress has stalled. The core disagreement remains unresolved: whether the code should be legally binding. ASEAN's muted response to Chinese aggression reflects an uncomfortable reality. The bloc depends on Beijing economically and has been reluctant to push back hard. ASEAN leaders have called only for restraint and respect for international law—language that carries little weight without enforcement. The Philippines, a longtime U.S. ally, has grown frustrated with other ASEAN members for not doing more to pressure China to step back.

The United States, which has no territorial claims in the South China Sea, has responded by deploying Navy ships and fighter jets to patrol the waterway and assert freedom of navigation rights. U.S. Secretary of State Antony Blinken arrived in Vientiane on Thursday to raise the issue of Chinese aggression directly. China has warned Washington not to meddle in regional disputes. The dynamic is familiar: economic integration pulling one direction, geopolitical tension pulling another, with ASEAN caught between.

Beyond the South China Sea, the summit also addressed Myanmar's unraveling. Since the military ousted an elected government in 2021, fighting has killed nearly 6,000 people and displaced more than 3 million. The army controls less than half the country's territory and has abandoned an ASEAN peace plan it agreed to just three years ago. Myanmar's top generals have been barred from ASEAN summits since the coup. Thailand will host an informal ministerial consultation on Myanmar in mid-December as frustration grows over the prolonged conflict.

Meanwhile, Japan and South Korea have been working to deepen their own ties with ASEAN. South Korea elevated its relationship with the bloc to a comprehensive strategic partnership. Japan's new Prime Minister Shigeru Ishiba pledged to provide patrol vessels, maritime law enforcement training, and cybersecurity support. Both countries framed their engagement around shared principles—freedom, democracy, the rule of law—a subtle counterweight to Beijing's economic-first approach.

Former ASEAN Secretary-General Ong Keng Yong offered a measured assessment: despite the challenges, ASEAN's diplomatic role remains central to regional stability. "Big powers cannot do what they wish in the region," he said. Whether that holds true may depend on whether ASEAN can convert its economic leverage into political will—or whether the weight of trade will continue to silence harder questions.