As ASEAN's oldest dialogue partner, China has long been a central figure in the security and prosperity architecture of Southeast Asia. But the relationship has never been simple.
Close economic cooperation sits alongside persistent geopolitical tensions, and that tension has only grown sharper as maritime disputes in the South China Sea and US-China strategic competition continue to intensify. What follows is an account of where that relationship stands today and what both sides are doing to keep the region stable.
The Economic Foundation and the South China Sea Problem
On the economic side, the numbers are hard to argue with. China has been ASEAN's largest trading partner for over a decade and bilateral trade continues to set new records.
The full implementation of the Regional Comprehensive Economic Partnership (RCEP), which came into effect in 2022, has accelerated this further by reducing tariffs, easing non-tariff barriers, and creating more flexible rules of origin that bind regional supply chains more tightly together.
Chinese investment in ASEAN countries has also surged, particularly in infrastructure, green energy, and the digital economy. The Jakarta-Bandung Railway, which began commercial operations in 2023, stands as the most visible symbol of that infrastructure collaboration.
But the South China Sea remains a serious stumbling block. China's nine-dash line claim overlaps the Exclusive Economic Zones of five ASEAN members: Vietnam, the Philippines, Malaysia, Brunei, and Indonesia.
The Declaration on the Conduct of Parties in the South China Sea (DOC), jointly adopted in 2002, has not been enough to contain the friction. Negotiations toward a more binding Code of Conduct (COC) have dragged on for years, stalled by fundamental disagreements over the COC's geographic scope, its legal status, and how disputes would actually be resolved.
In early 2024, tensions escalated sharply following incidents between Chinese and Philippine vessels near Scarborough Shoal and Second Thomas Shoal. The Philippines under President Ferdinand Marcos Jr. responded by taking a more assertive posture, deepening its defense alliance with the United States through the Enhanced Defense Cooperation Agreement (EDCA).
Beijing interpreted this as ASEAN being used as a proxy platform for US-China rivalry. Meanwhile China continued building military infrastructure on artificial islands within its claimed territory, a move that several ASEAN members view as both provocative and corrosive to regional trust.
ASEAN's collective response has been to hold the line on centrality and neutrality. High-level meetings, including the 43rd ASEAN Summit in Jakarta in September 2023 and a series of foreign ministers' meetings in Vientiane in 2024, reflect a sustained effort to prevent escalation.
Across these forums, ASEAN countries have consistently urged Beijing to accelerate the conclusion of an effective and legally binding COC and to refrain from actions that could further complicate the situation.
Indonesia occupies a particular position in all of this. As the largest maritime nation in Southeast Asia and home to the Natuna Islands which border China's claims, Indonesia has a direct stake in how the South China Sea question is managed.
Through its "one ASEAN family" approach, the Indonesian government has actively facilitated dialogue between China and the claimant states. Indonesian diplomacy on this front has never been interventionist. It emphasizes mutual trust, respect for international maritime law under UNCLOS 1982, and the avoidance of military confrontation.
At the 48th ASEAN Summit in Cebu in 2026, Indonesia reaffirmed that position, pushing to ensure that South China Sea discussions remain constructive and do not crowd out progress on economic cooperation.
Beyond the Disputes: Where Cooperation Has Taken Hold
The ASEAN-China relationship extends well beyond the maritime flashpoints, and in several areas cooperation has been genuinely substantive.
The COVID-19 pandemic between 2020 and 2022 reframed how both sides thought about shared vulnerabilities. During that period China contributed vaccines, medical equipment, and digital tracking technology while ASEAN developed rapid response mechanisms for public health emergencies. The experience demonstrated that non-traditional security threats require collective answers.
On climate and energy, China and ASEAN are collaborating on the energy transition through initiatives like the ASEAN Power Grid, which includes Chinese investment in solar and wind energy projects in Laos, Cambodia, and Vietnam.
Human resource development is another pillar. China regularly provides scholarships and training for civil servants, academics, and journalists from ASEAN countries.
The Lancang-Mekong Cooperation program, which brings together China, Cambodia, Laos, Myanmar, Thailand, and Vietnam, has made tangible progress on sustainable development in the Mekong subregion, covering transboundary water resource management, combating illicit trade, and developing tourism.
What Still Needs to Happen
The central unresolved problem is the COC. As long as it remains unfinished, the risk of misunderstandings and unplanned incidents at sea stays high. ASEAN leaders need to keep strengthening internal solidarity to avoid being pulled apart by bilateral pressure from Beijing.
At the same time, China needs to demonstrate genuine flexibility and a concrete commitment to international law, including a willingness to engage seriously with arbitral outcomes even where it rejects them in principle.
Track II and Track I.5 dialogues through institutions like CSCAP and the ISEAS-Yusof Ishak Institute offer space to explore creative solutions outside the constraints of formal diplomacy.
The broader picture is this: ASEAN countries cannot and will not choose between China and the United States. ASEAN centrality means ensuring the region does not become a battleground for great power competition.
China, as a rising regional power, carries a corresponding responsibility to show that its growth does not threaten the sovereignty of its neighbors and that it is invested in protecting the regional order rather than reshaping it unilaterally.
Peace in Southeast Asia will ultimately depend on whether differences get resolved at the negotiating table rather than at sea.
