China Seeks to Fill Trade Gap with Southeast Asia and Gulf States

Chinese Premier Li Qiang's message to South-east Asian and Middle Eastern leaders in Kuala Lumpur was clear: at a time of rising protectionism and uncertainty in global trade, Beijing wants to deepen its trade ties with the two regions. The gathering of 10 Asean countries and 6 Gulf nations, joined by a Chinese premier for the first time, aims to strengthen trade ties and create new market opportunities. But with the US imposing tariffs on key trading partners and exerting pressure on countries to pick sides, the region is facing an inflection point in global trade.

Key Takeaways:

• Chinese Premier Li Qiang emphasized the importance of deepening mutual trust and opening wider markets to create long-term strategic opportunities, at a time of heightened geopolitical conflict and rising protectionism.
• The gathering in Kuala Lumpur was only the second time heads of state and government from Asean and Gulf nations met to strengthen trade ties, with a combined GDP of $25tn and a population of 2bn.
• The summit highlighted China's willingness to engage with Gulf states with or without South-east Asian countries, as Chinese trade minister said in talks last week that countries must "make sure we are part of those conversations" on major trade deals.
• South-east Asia is among the regions hardest hit by Trump's tariffs, with Vietnam and Cambodia facing levies of more than 40% and Washington setting a deadline for implementation by July.
• Li Qiang pointed out that trade between Asean and Gulf nations accounted for just 5% of the global total, compared to their combined 25% of the world's economy and population.

Statistics:

• The 10 Asean countries and 6 Gulf nations have a combined GDP of $25tn (Source: Asean Secretariat)
• The population of the participating countries is over 2 billion (Sources: World Bank, International Monetary Fund)
• The global trade between the blocs accounts for just 5% of the total (Source: Li Qiang, Chinese Premier)
• The US has imposed tariffs on Vietnam and Cambodia of over 40% (Source: Trump administration)
• The deadline for implementation of the US tariffs is July (Source: Trump administration)

Sources:

• Liew Chin Tong, Malaysia's deputy trade minister, as quoted in the Financial Times
• Chinese Premier Li Qiang's remarks at the Asean-Gulf Co-operation Council summit
• Asean Secretariat
• World Bank
• International Monetary Fund
• Trump administration trade policies
• Financial Times article, "Kuala Lumpur Summit - China seeks to woo Asean and Gulf states", dated June 20, 2023.