East Asia-ASEAN Partnership Enters New Phase Reflecting Pragmatic Regional Shift - Economist 

By Karina Imran 

KUALA LUMPUR, Oct 22 (Bernama) -- The partnership between the East Asian countries of China, South Korea and Japan and ASEAN is entering a new phase marked by cooperation and shared interests, shaping the next decade of economic growth rather than political alignment, an economist said today.

This is evident as the regions are moving towards greater autonomy built on interdependence, reflecting a pragmatic shift for the region at a time of intensifying great-power rivalry, IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said.

He told Bernama that regional initiatives, such as the ASEAN Power Grid, the regional semiconductor framework and the local currency settlement system, would help close structural gaps across the bloc.

Besides this, the rise of climate finance and emerging artificial intelligence (AI) governance frameworks should strengthen both digital and environmental resilience, he said when asked on the extent of East Asia-ASEAN cooperation ahead of the 47th ASEAN Summit and Related Summits this week.

“East Asia-ASEAN cooperation has entered a more mature and resilient phase, anchored by the ASEAN+3 and the Regional Comprehensive Economic Partnership (RCEP) frameworks. 

“Trade and investment linkages remain strong as ASEAN-China trade stood at US$468.8 billion in 2023, while Japan’s Official Development Assistance (ODA) accounting for 31.4 per cent of ASEAN’s infrastructure financing between 2015 and 2021,” he said. (US$1=RM4.22)

Moreover, South Korea’s role is equally significant, with over US$7.3 billion in foreign direct investment (FDI) spread across more than 5,500 firms, strengthening the region’s industrial and technological connectivity.

Advancing Regional Growth Through the 47th ASEAN Summit

Mohd Sedek said ASEAN’s combined gross domestic product (GDP) is projected to reach US$4.5 trillion by 2030, supported by renewed investment flows, favourable demographics and stronger intra-regional connectivity. 

“East Asian partners remain central to this outlook, with Japan’s US$28.98 billion in trade continuing to underpin infrastructure modernisation. 

“Meanwhile, South Korea’s US$479 million in electric vehicle-related FDI is driving the next phase of green supply chain development,” he said. 

Mohd Sedek said the 47th ASEAN Summit’s economic agenda is to centre on three themes – digital transformation, sustainable growth and high-value industrial integration – which would further support the ASEAN-East Asia collaboration.

Prime Minister Datuk Seri Anwar Ibrahim will chair the summit held during Malaysia’s ASEAN chairmanship themed “Inclusivity and Sustainability”.

The preparatory meetings by senior officials are scheduled to begin on Oct 23, followed by ministerial meetings and thereafter the summit proper from Oct 26-28.

PEDs to Strengthen ASEAN’s Regional Framework

Mohd Sedek said the 47th ASEAN Summit is expected to deliver tangible outcomes that deepen East Asia-ASEAN cooperation under Malaysia’s 18 Priority Economic Deliverables (PEDs). 

“These are organised around four thrusts comprising trade and investment, sustainability, connectivity and digital resilience, reflecting Malaysia’s push for inclusive regional growth,” he said. 

He added that Malaysia is on track to complete 15 of the 18 PEDs, including the ASEAN-GCC Economic Cooperation Declaration and upcoming upgrades to the ASEAN-China Free Trade Area (ACFTA) 3.0 and the ASEAN-India Free Trade Area (AIFTA). 

Together, these initiatives could lift ASEAN’s annual income by about US$19 billion and increase manufacturing exports by nearly US$78 billion by 2030, he said. 

Equally important are the ASEAN Power Grid memorandum of understanding, the Regional Payment Connectivity Initiative and the Digital Economy Framework Agreement (DEFA), which together lay the foundation for a digitally integrated and low-carbon economy worth as much as US$2 trillion by 2030.

“These measures strengthen ASEAN’s economic autonomy at a time of intensifying great-power rivalry. 

“They signal a maturing regional architecture, one capable of sustaining growth that is self-reinforcing, inclusive and less dependent on external fiscal or monetary cycles,” he said. 

Sustaining Growth Amid Global Uncertainty, Shifting Trade Dynamics

With growth of ASEAN+3 projected at 4.0 per cent and ASEAN at 4.3 per cent per cent this year, Mohd Sedek views the region’s economic base as fundamentally stable, driven by domestic demand and deeper supply chain diversification. 

“That resilience stands out amid US tariff uncertainty and China’s industrial overcapacity pressures,” he said, adding that the upcoming ASEAN Summit could mark an inflection point for regional integration. 

He said the planned upgrades to ACFTA 3.0 and ASEAN Trade in Goods Agreement (ATIGA) are expected to unlock RCEP’s full potential, with projected gains of up to 2.5 per cent in real income and a 12.3 per cent rise in trade by 2035. 

“East Asia-ASEAN cooperation is moving beyond dependency toward a mutually reinforcing model, one sustained by investment, technology and tourism flows that benefit both sides. 

“We estimate that the summit outcomes may drive short-term multipliers of 1.2–1.5 times (2025-2026) from trade or digital initiatives, scaling to 1.5–1.8 times by 2030 via infrastructure or sustainability,” he added. 

The Philippines will be the next chair of ASEAN, taking over from Malaysia in 2026.

-- BERNAMA