ASEAN-China-GCC Summit charts new blueprint for Asian cooperation

Editor's note: Ge Lin is a CGTN economic commentator. This article reflects the author's opinions and not necessarily the views of CGTN.

At the inaugural Association of Southeast Asian Nations (ASEAN)-Gulf Cooperation Council (GCC)-China Summit, Chinese Premier Li Qiang urged the three parties to explore new models of international industrial and economic cooperation. He also articulated China's readiness to deepen strategic alignment with both ASEAN and the GCC, enhance macroeconomic policy coordination, and foster a partnership grounded in mutual respect and equal treatment.

This initiative offers a timely and constructive response to the escalating tide of protectionism and unilateral trade measures seen in parts of the world.

ASEAN and the GCC are both influential economic blocs with global significance. ASEAN is a regional grouping of 10 Southeast Asian countries: Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Myanmar, Cambodia, Laos, and Brunei. It also includes one candidate country, Timor-Leste, and one observer, Papua New Guinea. Taken together, the 10 member states of ASEAN represent the world's fifth-largest economy — behind the United States, China, the European Union, and Japan.

The GCC comprises of six Arab states bordering the Gulf: Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain. GCC countries possess the world's largest combined reserves of crude oil and natural gas. Their per capita GDP is about three times the global average, making the bloc not only energy-rich but also one of the world's wealthiest.

Premier Li's proposal is both pragmatic and visionary. At its core lies a simple truth: a stable and prosperous Asia is a stabilizer for the world.

I. A new vision of regional cooperation

1.1. A regional network resilient to external shocks

Premier Li's initiative should be understood not merely as a diplomatic overture but as a theoretical innovation in regional governance. It envisions Asia not as a loose collection of economies reacting to external volatility, but as a resilient, interdependent, and self-reinforcing ecosystem — a model in which cooperation reduces vulnerability to external shocks.

The trilateral summit itself — bringing together ASEAN, China, and the GCC for the first time — embodies this concept in practice. It represents a unified response to global fragmentation. China's decision to extend visa-free travel to all GCC countries underscores a strong commitment in long-term alignment.

While growing trust lays important groundwork, economic cooperation stands as the summit's focal point. As Malaysian Prime Minister Anwar Ibrahim noted in an interview with TV BRICS, "Our focus is back on the economic fundamentals," reaffirming that economic cooperation, not geopolitics, remains the summit's core.

"We're privileged to host the ASEAN meeting at the end of May, which will focus primarily on economic matters. It will also include participation from the Gulf Cooperation Council, with all six Arab states attending, and which then follows up with China as an economic summit to focus on the economy. That shows that our focus is back on the economic fundamentals,"said Malaysian Prime Minister Anwar Ibrahim in an interview with TV BRICS.

1.2. Economic cooperation as the "greatest common denominator"

Asia's diversity is unmatched — across religions, political systems, economic structures, and cultural traditions. In such a pluralistic landscape, identifying the unifying factor rather than a dividing one is essential. The answer, as this summit illustrates, is economic cooperation as the "greatest common denominator."

China's historic and contemporary willingness to engage in diplomacy offers a conceptual lens here. As early as 1955, Premier Zhou Enlai articulated the principle of "seeking common ground while reserving differences" at the Bandung Conference. It was a philosophy of pragmatism over dogma — focusing on shared interests, while respectfully managing differences.

The roots run even deeper. In the Analects of Confucius, a timeless precept holds: "Harmony without uniformity." This classical idea resonates with Asia's contemporary reality. Shared progress does not require sameness — it only requires some common ground.

Economic cooperation as the "greatest common denominator" translates this philosophy into concrete action. Energy stands out as a key area of progress, encompassing both traditional energy resources and the transition toward renewables and clean energy. Technology offers another vital front. Shared investments in research collaboration and talent development enable economies to combine their strengths and drive collective innovation. The joint development of digital infrastructure —including smart logistics and e-commerce platforms — further facilitates cross-border trade.Together, these domains form a practical roadmap toward region-wide prosperity.

II. The economic logic of cooperative efficiency and layered regional integration

2.1. Introducing "cross-border friction costs" into regional value chain analysis

In today's world economy, the architecture of production has long transcended national boundaries. A global value chain refers to a transnational network of economic activities. From raw material extraction to final assembly, and from marketing to after-sales services, these activities are often dispersed across multiple countries. The underlying logic is efficiency: each function is located where it can be performed most productively and at lowest cost.

Amid shifting global dynamics, greater attention is now being paid to regional value chains — networks that remain globally connected but are more geographically concentrated. When a significant portion of trade, investment, and industrial cooperation can be effectively completed within a regional grouping, that region begins to function as a self-reinforcing economic ecosystem. The ASEAN–China–GCC corridor is now emerging as such a region.

Yet the operation of global and regional value chains is far from frictionless. To understand this, it is worth revisiting a foundational idea in the economics of organization. In his 1937 paper The Nature of the Firm, Nobel laureate Ronald Coase argued that economic activity is shaped not only by price signals, but also by the costs of using the market — such as searching for information, negotiating contracts, and ensuring compliance. These transaction costs help determine whether a task is carried out within a firm or through market exchange.

When economic decisions involve crossing borders, these costs take on new and more complex forms. This article introduces the term cross-border friction costs to capture these burdens: customs inefficiencies, divergent regulatory systems, unpredictable policy shifts, and broader geopolitical risks.While less visible than tariffs, they can be far more destructive to the seamless flow of goods, capital, services, and data.

2.2. Shared efficiency gains within cooperative framework

One immediate consequence of cross-border friction costs is a loss of efficiency. Capital and labor that would otherwise support productive activity are diverted toward navigating procedural hurdles, regulatory inconsistencies, and institutional uncertainty.Instead of creating value, a nontrivial share of resources is consumed in managing complexity.

Cross-border friction costs do not just sap efficiency — they distort the structure of economic activity. They reshape how supply chains are configured, influence whether cross-border initiatives are even attempted, and often prevent viable projects from moving forward. Many efforts are shelved not because of insufficient demand or technical constraints, but because the transactional burden of operating across borders proves too heavy to bear.

It is in this context that the value of the ASEAN–China–GCC trilateral framework becomes clear. By fostering policy coordination, regulatory compatibility, and institutional trust, this regional mechanism has the potential to substantially lower cross-border friction costs. What is being offered is a more efficient operating environment — one in which firms, governments, and communities can cooperate with fewer invisible burdens.

When barriers fall, resources are better able to flow to their most productive uses. This allows for Pareto improvements —efficiency gains that benefit all participating economies. Naturally, these gains are shaped by the scope of the framework itself: the closer and deeper the cooperation, the broader the room for mutual benefit. While those outside the arrangement may not experience these direct gains, the framework nonetheless serves as a model that can inspire broader alignment.

2.3. Why overlapping frameworks matter: ASEAN's strategic wisdom

As more countries join a cooperation framework, two opposing effects emerge simultaneously — what may be called the scale–coordination dilemma. On one hand, if coordination can be effectively achieved across a broader membership, the potential efficiency gains grow considerably, as a wider scope means that more resources and more parts of the value chain are involved, opening up greater possibilities for broader economic gains.

On the other hand, increasing the number of participants also raises the difficulty of coordination. Diverse interests, policy differences, and institutional gaps make consensus harder to reach, which can prevent the reduction of friction costs and weaken the overall integration effect.This scale–coordination dilemma reflects a core tension in regional integration: broader inclusion brings more potential, but also more complexity.

Given these opposing dynamics, it is unsurprising that multiple overlapping cooperation frameworks have emerged. Regional arrangements such as ASEAN+1, ASEAN+3, RCEP, and now the ASEAN–GCC-China framework coexist within the region. While this might seem redundant at first glance, these overlapping frameworks showcase ASEAN's institutional ingenuity in balancing inclusiveness with flexibility, allowing for progress even when broader consensus proves challenging.

When broad consensus becomes difficult to reach, smaller cooperation frameworks serve as a safeguard against backsliding. Today, the ASEAN+8 arrangement has seen limited progress, driven in part by the rise of protectionism in the United States.

At the same time, smaller frameworks may act as testing grounds. When alignment is achieved in smaller circles, it can be scaled outward. The growing momentum of the ASEAN–China–GCC trilateral framework exemplifies this approach and stands as a hallmark of ASEAN diplomacy.

III. China opportunity narrative: unlocking the China dividend for global growth

3.1. Building on the idea of "China dividend" against "China threat"

In recent years, global discourse — especially in Western countries — has often been dominated by the notion of a so-called "China Threat" — a narrative portraying China's rise as a source of geopolitical rivalry, economic disruption, and systemic challenge to the existing international order. This perception, largely shaped by Western political and media narratives, has fueled tensions, increased protectionism, and cast a shadow over the potential for cooperation.

However, this "China Threat" narrative overlooks critical realities. It tends to exaggerate conflict while ignoring the enormous opportunities generated by China's continued growth and openness. It reduces a complex, multifaceted process of global interdependence and mutual benefit into a zero-sum competition, disregarding how China's advancement can contribute to shared prosperity and global stability.

Building on the established concept of the "China Dividend," which highlights the positive spillover effects of China's economic expansion, the China opportunity narrative emerges. This narrative re-centers the discussion around how China's sustained growth, policy stability, and active engagement in multilateral cooperation translate into tangible benefits — not only for China but for the global community.

3.2. Free flow of economic factors as a pathway to development rights

At the heart of global development lies the principle that all countries, regardless of size or stage, deserve the opportunity to participate meaningfully in the international economy. Efforts led by China, together with partner countries across the world, aim to foster the free flow of economic factors — capital, labor, technology, and knowledge — across borders.

Historically, the global economic order has often confined developing nations to fixed roles dictated by a static interpretation of comparative advantage, relegating many to suppliers of raw materials or low-end manufacturing hubs. Yet comparative advantage is not a permanent assignment but an evolving dynamic. Just as today's advanced economies started from more basic stages of industrial development, latecomers deserve the chance to ascend the value chain.

Connectivity initiatives, including the Belt and Road Initiative and the ASEAN-GCC-China cooperation framework, address the critical gaps that prevent many countries from realizing this potential. This connectivity enabling smaller economies to become evolving nodes in the world's economic fabric rather than permanent peripheries.

3.3. A stable China is a global public good

As a systemically important country, China's consistency in governance and long-term growth trajectory contributes to global resilience across at least three critical dimensions.

Firstly, China has demonstrated strong counter-cyclical capacity during major global downturns. In both the 2008 global financial crisis and the COVID-19 pandemic of 2020, China's rapid and robust economic recovery helped sustain global demand, offering a crucial anchor as other major economies contracted.

Secondly, the predictability embedded in China's institutional framework — particularly its Five-Year Plans — provides rare policy certainty in a world where short-termism increasingly dominates decision-making. For global businesses and investors navigating turbulent capital markets and volatile regulatory environments, China's planning system facilitates long-term capital allocation and supply chain continuity.

Thirdly, China's non-interventionist development financing — versus political conditionalities — offers countries greater flexibility to engage economically without compromising their broader geopolitical considerations. This approach enables partners to pursue development strategies on their own terms.

Taken together, China's 45-year track record of uninterrupted growth, policy continuity, and international pragmatism constitutes a rare global public good. As the world searches for anchors amid uncertainty, a stable and forward-looking China remains an indispensable pillar of global economic governance.

Conclusion: Forging Asia's path forward

The inaugural ASEAN–GCC-China Summit marks more than a symbolic gathering — it signals the emergence of a new architecture for interregional cooperation. In the face of escalating US-led protectionism and unilateral tariff measures, Asia is responding not by retreating inward, but by reaching outward with a pragmatic and principled vision rooted in economic interdependence, mutual respect, and shared opportunity.

The ASEAN–GCC-China framework does not seek to replace existing institutions, but to complement them — grounded in a deep respect for difference and diversity. Though still in its early stages, the framework holds profound promise. It may not only chart a new course for Asia, but also offer a fresh reference point for cross-regional collaboration.