Why ASEAN must transform global tensions into regional opportunities

Having operated businesses across ASEAN for over two decades, I’ve observed firsthand how the region leverages global uncertainty into strategic advantage. Kuala Lumpur's recent hosting of the ASEAN-Gulf Cooperation Council (GCC) Summit and the inaugural ASEAN-GCC-China Summit illustrates the bloc's multi-vector diplomacy in action.

Unlike Cold War-era non-alignment, which was often reactive and avoidance-based, ASEAN’s approach today is proactive. Strategic multi-alignment involves cultivating multiple partnerships, not out of necessity, but as a deliberate effort to maximize economic and geopolitical leverage.

The numbers tell the story: ASEAN’s trade with China rose approximately 15% in 2024, while trade with the United States (US) increased 12% and with the European Union (EU) remained stable at a substantial €258.7 billion, making ASEAN the EU’s third-largest trading partner outside Europe. These figures reflect ASEAN’s ability to diversify its partnerships without compromising its autonomy.

Crucially, this is not diplomatic hedging. It is deliberate diversification. Singapore exemplifies this with $8.2 billion worth of new agreements with China in 2024, alongside deeper defence cooperation with the US and expanded trade ties with the EU.

Bilateral deals signed by Malaysia, Vietnam, Cambodia and Thailand with China are not signs of geopolitical allegiance. They represent calculated moves to drive economic benefit while preserving independence through ASEAN’s collective mechanisms. It must be said, however, these bilateral arrangements sometimes create tensions within ASEAN, particularly when member states' individual interests conflict with collective regional positions, as seen in differing approaches to South China Sea disputes.

In a time of global fragmentation, ASEAN stands out as an economic bright spot. The region is projected to grow by 4.6% in 2024, significantly outpacing the US (≈ 1.7–1.8%) and the EU (1.1%). While this growth partly reflects ASEAN's deliberate engagement strategy, it also benefits from structural advantages, including demographics, natural resources and positioning in global supply chains that existed before the current multi-alignment approach.

The ASEAN-GCC partnership alone is expected to generate $50 billion in new trade flows by 2027. The region’s digital economy is on track to hit $1 trillion by 2030. According to ASEAN Investment Reports, over the past two years, the region has attracted more than $400 billion in foreign direct investment, including a record $230 billion in 2023 alone.

While traditional partners, such as China, Japan and the US, remain major contributors, a growing share of capital is now coming from non-traditional sources — particularly sovereign wealth funds in the Gulf region. Middle Eastern investors are increasingly drawn to Southeast Asia’s infrastructure, energy and digital sectors, as evidenced by recent multi-billion-dollar joint funds and investment deals between ASEAN member states and Gulf sovereign entities

ASEAN economies are not being fragmented by great power rivalries; they are actively leveraging them. The Philippines, for example, has attracted $12 billion in manufacturing relocations from China since 2023, cementing its position as a competitive global outsourcing hub.

Beyond manufacturing, ASEAN aims to become a hub for the blue economy, with maritime industries already adding $2.4 trillion each year to regional GDP. From Singapore’s maritime technology to Indonesia’s sustainable fisheries, ASEAN is setting global benchmarks in ocean-based development.

In boardrooms across Southeast Asia, the strategic question has evolved. It is no longer 'How do we avoid taking sides?' but 'How do we benefit from all sides?'

Over the past three years, ASEAN member states have significantly broadened their strategic portfolio by signing comprehensive partnerships with Japan, Australia, India and South Korea. These efforts have delivered tangible returns, generating over $200 billion in new investment commitments.

Global partners are adapting to ASEAN’s terms too. China’s $15 billion infrastructure fund for ASEAN includes local content requirements and environmental safeguards, indicative of ASEAN’s stronger negotiating position.

During Malaysia’s high-level engagements with Russia in mid-2025, officials announced strengthened cooperation on nuclear energy, technology transfer and energy infrastructure, reflected in a nearly 63% surge in trade year-on-year in Q1 2025. Meanwhile, Malaysia’s US–Malaysia trade totalled $80.2 billion in 2024, underscoring its robust engagement across geopolitical divides.

This is not fence-sitting, it is strategic portfolio management.

The outcomes are obvious. ASEAN's multi-alignment approach has enhanced its collective bargaining power, thereby improving its leverage in comparison to traditional, bilateral diplomatic methods.

Institutionalizing a new regional order What ASEAN has demonstrated is that smaller and middle powers can shape — not just respond to — the evolving global architecture. But to sustain and scale this approach, institutional mechanisms must evolve accordingly.

Regional leaders should focus on codifying multi-alignment strategies through permanent secretariats, standardized trade protocols and integrated supply chain frameworks. Initiatives like the Regional Comprehensive Economic Partnership (RCEP), which reduced tariffs on 65% of goods within its first 18 months, offer a blueprint.

Having witnessed ASEAN’s evolution, I believe its model of strategic multi-alignment will increasingly be adopted by other middle powers. By 2030, I expect ASEAN to broker multilateral agreements that bypass traditional power centres entirely, redefining diplomacy for a multipolar world, if it can overcome internal divisions and maintain relevance as the power competition intensifies.

A pragmatic path forward What we are seeing in ASEAN is a shift away from ideological alignment towards pragmatic, interest-based engagement. In a world marked by fragmentation and polarization, this may be one of the most viable strategies for ensuring regional stability and global resilience.

The success of strategic multi-alignment depends on maintaining the delicate balance between competing interests while preserving internal cohesion. As great power competition intensifies, ASEAN will face increasing pressure to take sides on issues where neutrality becomes impossible. The bloc's ability to navigate these pressures while maintaining its strategic autonomy will ultimately determine whether multi-alignment remains a viable model for other middle powers to follow.

The world is not just watching ASEAN. It may soon be following its lead, but only if ASEAN can demonstrate that its approach remains sustainable under mounting geopolitical pressures.