View of Pudong district in Shanghai Photo: VCG

Asia's economy demonstrated remarkable resilience and dynamism in 2025 despite a complex and challenging external environment. Even in the context of rising protectionism, regional economic integration continued steadily, and trade and investment cooperation expanded further last year. 

Although external uncertainties and challenges remain, the overall outlook for Asian economies remains positive in 2026.

Both ASEAN's development plans and broader regional cooperation frameworks have identified emerging sectors - such as the digital economy, artificial intelligence (AI), and new energy - as key drivers of future economic growth and collaboration. With a solid industrial base, mature cooperation mechanisms, and strong endogenous momentum, Asia is well-positioned to maintain resilience and sustain long-term development.

Zhou Shixin Photo: Courtesy of Zhou Shixin

Over decades of development, Asia has built multiple comparative advantages. The region now possesses complete and well-organized industrial and supply chains, with economies at different stages of development and of varying scales forming highly complementary relationships. 

Under the support of high-standard, multilateral agreements such as the Regional Comprehensive Economic Partnership (RCEP), factors of production are flowing and integrating more efficiently across the region, optimizing the allocation of technology, capital, and labor, and continuously strengthening Asia's overall economic momentum.

Against this backdrop, industrial cooperation among Asian economies has deepened steadily. China's economic collaboration with Southeast Asia, alongside cooperation with Japan, South Korea, Australia, and New Zealand, has become increasingly close, effectively promoting regional economic integration. China-ASEAN cooperation is particularly noteworthy. The China-ASEAN Free Trade Area (CAFTA) 3.0 upgrade in October 2025 has further deepened two-way trade and industrial cooperation, making most member states each other's key trading partners. This reflects the tangible benefits of regional industrial integration.

Asian economies are placing greater emphasis on forward-looking strategies. Development efforts are not limited to emerging industries but also include the modernization and upgrading of traditional sectors such as agriculture, which are increasingly adopting advanced technologies and management practices to increase value-added.

At the same time, Asian countries are prioritizing future-oriented sectors driven by the Fourth and Fifth Industrial Revolutions. Strategic investments in digital technologies, AI, renewable energy and energy storage, biomedicine, and smart cities are driving industrial upgrades and enhancing regional coordination and collaboration.

In this context, regional cooperation has become even more critical. Across Asia, a broad consensus has emerged that "cooperation drives development, and competition strengthens capability." Some Southeast Asian countries, still relatively limited in technology, management, and capital, have implemented preferential policies to attract foreign investment and accelerate domestic growth - a pragmatic and rational strategy.

From an institutional perspective, implementation of the RCEP continues to deepen. Future upgrades to this agreement could boost Asia's economic growth significantly, while also providing reference points for the evolution of global trade rules.

Nonetheless, challenges remain. Some non-regional countries, recognizing Asia's growing advantages in production factor integration and industrial collaboration, have imposed higher tariffs and other restrictive measures. These actions reflect concerns over Asia's rising competitiveness and carry an element of containment.

In practice, however, such external pressures have not fundamentally undermined Asia's growth momentum. On the contrary, regional economies have responded by strengthening internal cooperation, deepening industrial synergies, and enhancing their capacity to manage both internal and external challenges - demonstrating notable economic resilience.

Asia has established complementary industrial and production factor advantages and accumulated substantial experience in risk management through long-term cooperation. Building on existing mechanisms to further enhance resilience will help ensure stability and sustainable growth even in a complex and uncertain global environment.

China in particular plays multiple roles in regional economic development: as a growth engine, a collaborative partner engaging in equitable competition, and a facilitator of capacity building. China and other Asian economies have developed multi-dimensional trade and investment relationships. The long-term trend points toward deeper coordination and higher-quality integration.

Through mutual respect, understanding, and cooperative promotion, China and Southeast Asian countries are well-positioned to address differences arising from their varying development stages and industrial structures, seize opportunities for shared growth, and guide the regional economy toward a more resilient, balanced, and sustainable future.

The author is director of the Center for Southeast Asia Studies, Shanghai Institutes for International Studies. bizopinion@globaltimes.com.cn