Asean countries are facing their own ‘China shock’

As the United States and Europe have sought to loosen their economic ties with China in recent years, Beijing has focused on expanding its export markets across the “Global South”, particularly in Southeast Asia.

- Manishi Raychaudhuri

But this could create significant economic risks as the region's manufacturers struggle to compete. Regardless of the contours of any eventual US-China trade deal, Beijing's exports to America seem destined to continue falling, as do those to the European Union. The bloc has been seeking to “de-risk” from Chinese imports and supply chains, particularly when it comes to electric vehicles, batteries and solar power equipment.

China's exports to the US and the EU have already been declining steadily for years. In 2018, almost 20% of China's exports were to the United States. By 2024, this was down to 14.7%. The proportion of exports to the EU also declined, though less dramatically, from 17.0% to 14.4% during this period.

China has actually been reducing its export dependence on all developed economies, including Japan, South Korea and Taiwan. Instead, the manufacturing powerhouse has been expanding ties with the “Global South”, particularly Southeast Asian nations (Asean).

In fact, 16.4% of China's exports went to Asean in 2024. That's more than the shares claimed by the US or the EU.

WANING TRANSSHIPMENT

China's focus on Asean accelerated after the 2018 trade war that started during US President Donald Trump's first term, as exports bound for America appeared to be re-routed through Southeast Asian countries.