Economic Outlook of Australia-ASEAN Relations under the Warming Geopolitical Landscape in 2025
The geopolitical landscape in the Indo-Pacific region is expected to remain turbulent in 2025, with intensifying great power competition exerting a complex and dynamic influence on Australia-ASEAN economic relations. This paper analyzes the potential impacts of these factors on the economic ties between Australia and ASEAN, considering aspects such as great power competition, regional economic integration, supply chain restructuring, and climate change.
In 2025, the intensifying great power competition in the Indo-Pacific region will continue to shape the geopolitical landscape, exerting a profound impact on the economic relations between Australia and ASEAN.
1. The Impact of Intensifying Great Power Competition on Australia-ASEAN Economic Relations
The lingering effects of the US-China trade war will continue to influence the regional economy, with Australia and ASEAN countries facing pressure from both economic giants to seek a balance. Regional economic integration will accelerate in response to great power competition. The full implementation of the Regional Comprehensive Economic Partnership (RCEP) will present new opportunities for Australia-ASEAN trade but also introduce new competition. Geopolitical risks arising from great power competition could increase uncertainty in investment and trade, thereby affecting Australia-ASEAN economic cooperation.
2. The Impact of Supply Chain Restructuring on Australia-ASEAN Economic Relations
To reduce reliance on single markets, companies will accelerate supply chain diversification, creating new opportunities for Australia and ASEAN countries to participate in global supply chain restructuring. ASEAN countries are poised to become emerging manufacturing bases, attracting investment from Australian businesses. The rapid development of the digital economy will provide new growth points for Australia-ASEAN trade cooperation, such as e-commerce and digital services trade.
3. The Impact of Climate Change on Australia-ASEAN Economic Relations
Climate change will drive the development of a green economy, leading to increased cooperation between Australia and ASEAN countries in renewable energy and green technologies. Traditional industries will face pressure to transform, and Australia and ASEAN countries will need to adjust their industrial structures to adapt to the trend of green economic development. Extreme weather events caused by climate change will increase uncertainty in economic activities and impact infrastructure and trade.
Australia and ASEAN countries should seize the following opportunities:
- Deepen regional economic cooperation by actively participating in the implementation of the RCEP and promoting the integration of regional industrial chains.
- Promote the development of the digital economy by strengthening digital infrastructure and developing the digital economy to enhance regional competitiveness.
- Promote the transition to a green economy by strengthening cooperation in renewable energy and green technologies and achieving sustainable development.
At the same time, Australia and ASEAN countries should also be aware of the following challenges:
- Geopolitical risks: Strengthen risk prevention and reduce the impact of geopolitical risks on economic cooperation.
- Industrial transformation: Accelerate industrial transformation and upgrading to enhance industrial competitiveness.
- Climate change: Strengthen cooperation on climate change and jointly address climate challenges.
A time full of challenges and opportunities, Australia and ASEAN countries can only achieve mutual benefits through strengthened cooperation and joint efforts to address challenges.
In 2025, Australia-ASEAN economic relations will face a complex and dynamic situation. On the one hand, geopolitical competition, supply chain restructuring, and climate change will bring new challenges; on the other hand, regional economic integration, the development of the digital economy, and the transition to a green economy will also present new opportunities for Australia-ASEAN cooperation.
Notes: This is a preliminary analysis, and the specific situation may vary depending on changes in the international situation.
Disclaimer: This analysis is based on the information available up to the time of writing and is intended for general informational purposes only. It does not constitute professional advice and should not be relied upon as such. For specific advice, please consult with a qualified professional.