In which sectors do the interests of ASEAN and the BRICS countries align sufficiently to form sustainable production and investment links? Under what conditions could a fully-fledged economic network between the two groups take shape by 2035? Read the TV BRICS article

The economic foundation for convergence

The economic convergence between ASEAN and the BRICS countries is already taking shape in specific supply chains, investment projects and transport routes. Chinese companies are expanding production in Southeast Asia, India is increasing its presence in the pharmaceutical and technology services sectors, the Gulf states are investing in infrastructure, whilst the resource base of Russia and Brazil is creating opportunities to link up with regional production chains.

However, cooperation remains fragmented. Its development is determined not by the creation of a new integration bloc but by how rapidly the costs of trade, logistics, cross-border payments and regulation will fall. It is precisely these factors that will determine whether existing links can evolve into a sustainable system of cooperation by 2035.

The institutional link between the two regions is also strengthening. Indonesia has been a member of BRICS since January 2025, whilst Malaysia, Thailand, and Vietnam have been granted partner status within the group. This creates direct points of entry between the economies of South-East Asia and BRICS, although no formal ASEAN–BRICS framework exists.

This configuration is no coincidence. Since the early 2010s, the BRICS countries have consistently expanded their cooperation with external partners – both individual states and regional organisations. As early as the 2011 summit declaration, a willingness to cooperate with non-member states was enshrined. Later, this approach took on a practical dimension: the chairing countries began systematically involving neighbouring states and leading regional organisations in the dialogue.

The convergence of interests is most clearly evident in five sectors. The first is food. Russia, Brazil and India are among the largest producers and exporters of food and agricultural resources. ASEAN countries – Indonesia, Vietnam, the Philippines, and Thailand – have a steady and growing demand for cereals, oilseeds and fertilisers. Rice, palm oil, rubber and aquaculture products form the counter-flow. A relationship of mutual complementarity is emerging, whereby the food needs of some countries are met by the resource base of others. This is not about a single food security system for the groupings but rather about the convergence of interests between specific producers and consumers. Fertilisers play a particular role: their supply from BRICS countries supports the intensification of agriculture in ASEAN, creating a sustainable interdependence.

The establishment of a BRICS grain exchange could broaden food exporters’ access to buyers, make price indicators more transparent and lead to more predictable pricing. For ASEAN countries dependent on grain imports, the introduction of such a mechanism would mean greater access to stable supplies. At the same time, a grain exchange would stimulate the development of supporting infrastructure – logistics hubs, port facilities, storage systems and financial instruments – which would serve to further deepen the interconnection between the two regions.

The second area is energy. The energy nexus centres on ASEAN countries’ demand for oil, gas and coal, and the resource base of the largest BRICS economies. Indonesia is a major supplier of coal to China and India. An additional factor accelerating energy convergence is the desire of ASEAN countries to diversify their supply sources. Disruptions in traditional supply channels are prompting governments in the region to seek alternative partners capable of ensuring stable and predictable energy supplies. In this context, the resource base of the BRICS countries takes on not only commercial but also strategic significance for Southeast Asia: this involves the formation of a long-term foundation for energy interdependence.

An additional advantage of BRICS is the combination, within the group, of major exporters and importers of energy resources. Some members produce oil and gas in volumes that significantly exceed their domestic needs, whilst others can meet only part of their demand from their own resources. This complementarity fosters sustainable partnerships: exporters redirect supplies to their partners’ markets, whilst importers gain access to stable energy sources. For ASEAN, this means the opportunity to connect to existing energy routes and partnerships. There is no need to build relationships with each supplier individually. At the same time, it is not a single institutional system that is being established, but rather a network of existing bilateral and multilateral ties that is already in operation.

Besides traditional energy sources, this collaboration also extends to the field of renewable energy. ASEAN countries possess significant potential in solar, geothermal and hydropower, but the realisation of this potential is hampered by the high cost of geological exploration, weak grid infrastructure and a lack of funding. Research centres and technology companies in the BRICS countries can contribute to the development of geothermal, solar and wind energy technologies, whilst the New Development Bank (NDB) can finance the relevant infrastructure projects. Such cooperation broadens the agenda for closer ties beyond the exchange of raw materials, adding a technological dimension to it.

The third area concerns critical minerals and industrial raw materials. Individual ASEAN economies supply BRICS countries with nickel, tin, bauxite and other industrial resources. Indonesia occupies a key position in the global nickel supply chain, making it a critical link for battery production and the development of electric transport in China and India.

At the same time, countries in the region are increasingly focusing on deepening the processing of resources within their own territories. Indonesia is consistently restricting exports of unprocessed raw materials while encouraging the establishment of processing facilities within the country. This opens up opportunities for companies from the BRICS countries not merely to purchase raw materials but to participate in creating added value – through joint projects to build smelters and production facilities for the battery industry. This model of interaction transforms resource complementarity into industrial cooperation, cementing the convergence of these two spheres at the level of long-term investment projects.

The fourth area is electronics and industrial cooperation. Malaysia, Vietnam, and Thailand produce semiconductors, printed circuit boards and electronic components, which are integrated into the production chains of Chinese companies. In return, industrial equipment and electrical engineering products flow in from China. India is strengthening its presence in certain segments of industrial cooperation, primarily in mechanical engineering and component manufacturing. A distributed production system is taking shape, in which the manufacturing and technological expertise of the BRICS countries is combined with the industrial capacity of ASEAN.

The fifth sector is pharmaceuticals. Indian generic medicines account for a significant share of the markets in Indonesia, Vietnam, and the Philippines. Medical products and equipment from China are also expanding their presence. For India, the ASEAN market is important both as an export destination and for the localisation of production. For ASEAN countries, the Indian pharmaceutical sector is a source of affordable medicines and technological expertise. Expanding cooperation in the fields of medical equipment, the localisation of pharmaceutical production and the exchange of healthcare technologies remains a promising area.

Assessing where robust supply chains have already been established and where there is potential for further development, Irina Rusak, an expert in the competitiveness and innovative attractiveness of the economy, public administration, sustainable development and the regional financial system, notes: Trade between ASEAN and China reached approximately US$982.3 billion in 2024. Chinese investment in ASEAN totalled US$19.3 billion, concentrated primarily in the automotive sector (particularly electric vehicles), renewable energy and digital infrastructure. A significant proportion of bilateral trade relates to electrical engineering products.

At the same time, the expert emphasises that there is a clear convergence of interests in the areas of food, energy and strategic minerals (namely nickel, cobalt, lithium and rare-earth elements). At present, this is primarily an area for joint projects and long-term contracts, rather than established, unified and sustainable production chains. In the pharmaceutical sector, integration remains fairly limited and uneven.

An important structural factor reinforcing mutual interest is ASEAN’s demographic profile. Almost half of the region’s population is under 30, and the size of the potential labour force is forecast to continue growing until 2038. This creates sustained domestic demand for food, energy, housing and consumer goods, whilst also forming the region’s significant labour pool. For the BRICS countries, this demographic structure represents an expanding market and a base for locating production facilities, whilst for ASEAN it provides a further argument in favour of attracting capital and technology from abroad.

Mechanisms of economic convergence

The convergence of the two groups is concentrated in specific countries, ports, industrial clusters and financial centres. The China–ASEAN corridor remains a key production and trade hub between ASEAN and the BRICS economies. Chinese companies are establishing assembly plants and electronics manufacturing facilities in ASEAN. Intermediate goods and equipment flow in the opposite direction. This corridor creates an infrastructural foundation to which suppliers of raw materials from Russia and Brazil, as well as capital from the Gulf states, can connect.

As Irina Rusak emphasises, investment has the potential to reshape the manufacturing landscape of Southeast Asia, and this is already evident from the statistics. For instance, foreign direct investment (FDI) inflows into ASEAN in 2025 reached US$243.9 billion, exceeding the all-time high of US$230 billion recorded in 2023.

“Singapore led the way in terms of investment – US$150.9 billion, Indonesia – US$21.4 billion, Vietnam – US$20.4 billion and Thailand – US$19.1 billion. China is the third-largest source of FDI for ASEAN and can facilitate the relocation of production in the electronics, electric vehicles, metalworking, energy and digital infrastructure sectors,” said Irina Rusak.

According to the expert, the most complex technologies are not being relocated automatically, as this process must be legally clear and legitimate for all participants. Furthermore, it is noted that in ASEAN in 2025, greenfield investments (or investments from scratch) fell by 10.1 per cent to US$105.6 billion, which raises questions about the presence of certain constraints.

In terms of trade volume and the depth of industrial cooperation, India’s engagement with ASEAN still lags behind that of China–ASEAN but is expanding in several areas simultaneously – pharmaceuticals, IT services and industrial cooperation. Indian companies are increasing their supplies of medicines to Indonesia and Vietnam and are opening technology centres in Malaysia and Thailand. For ASEAN, India is of interest as a growing sales market and a source of expertise. For BRICS, the Indian dimension is important as an alternative centre of gravity, enabling ASEAN countries not to rely solely on a single major partner.

Capital from the Gulf states, primarily the UAE and Saudi Arabia, plays a special role. Its significance is determined not so much by trade as by investment. The sovereign wealth funds of these states are showing growing interest in port infrastructure, logistics centres and energy projects in Southeast Asia. For ASEAN countries, this represents an additional source of long-term financing for infrastructure projects. For the Gulf states, it is a means of diversifying their investment portfolios and expanding their presence in one of Asia’s most dynamic regions.

The four ASEAN states that currently serve as the most prominent hubs for cooperation with BRICS are Indonesia, Malaysia, Thailand, and Vietnam. Indonesia – a member of BRICS – is the region’s largest economy, with reserves of nickel, coal and bauxite, as well as a policy of accelerated industrialisation. Malaysia, Thailand, and Vietnam are BRICS partners with a well-developed industrial base. Malaysia is a hub for the electronics industry and Islamic finance. Thailand boasts automotive and food industries, coupled with a favourable logistical location. Vietnam is a rapidly growing manufacturing centre with deep integration into regional supply chains.

Logistics is the most important connecting mechanism. The bulk of trade passes through the maritime hubs of South-East Asia. The Straits of Malacca and Singapore are among the busiest shipping routes in the world. The ports of Klang, Laem Chabang, Cai Mep-Thi Vai and Tanjung Perak handle the transhipment of containerised cargo, bulk goods and energy resources. The throughput capacity of these ports is becoming a critical factor. Consequently, capital from China and the Gulf states is showing increasing interest in terminal expansion and the modernisation of port infrastructure.

India occupies a strategic position between West and Southeast Asia. The development of ports on the east coast and coastal shipping could strengthen its role as a transit hub for cargo travelling from the Gulf states to ASEAN. For the region, this would mean the emergence of an alternative route, reducing dependence on a limited number of sea lanes. This is a promising area, the realisation of which will depend on the pace of development of the relevant infrastructure.

The expansion of energy trade is creating additional demand for Liquefied Natural Gas (LNG) terminals, storage facilities and other infrastructure. At the same time, the importance of overland routes is growing. The development of China’s rail links with mainland ASEAN countries is expanding opportunities for the transport of medium- and high-value goods. Road corridors ensure the rapid delivery of time-sensitive goods.

In the long term, logistical cooperation could progress to the point of establishing a compatible transport and logistics infrastructure with uniform rules for carriage, cargo insurance and a shipment tracking system. This involves standardising procedures that reduce the costs of cooperation. Such standardisation would simplify customs procedures, make pricing more transparent and enhance the reliability of supply chains between BRICS and ASEAN countries. For exporters of fertilisers, food and industrial raw materials, this would mean lower logistics costs and faster turnover of goods, whilst for importers it would mean greater predictability in delivery times and costs.

Paulo Nogueira Batista Jr, an economist, former vice-president of the New Development Bank (NBD), and an expert in macroeconomics and international financial and monetary management, does not believe that the financial infrastructure can be confidently described as the weakest link between ASEAN and BRICS.

“Cross-border transactions are increasingly being conducted in the national currencies of the participating countries. Furthermore, the People’s Bank of China has a network of bilateral renminbi swap lines with a number of central banks in the Global South, including some central banks in ASEAN countries. These swap lines can provide liquidity, which may prove useful in times of financial crisis,” said Paulo Nogueira Batista Jr.

Financial infrastructure remains the least developed, yet one of the most promising mechanisms for convergence. Growing trade volumes require settlement, lending and insurance. Direct transactions between a number of national currencies remain less liquid than those conducted via leading reserve currencies, which increases transaction costs. A solution could lie in establishing mechanisms for direct exchange between central banks and concluding bilateral swap agreements.

Some central banks in ASEAN and BRICS countries are already developing mechanisms for local currency settlements and currency swaps. Clearing centres, which facilitate the netting of obligations, are becoming a sought-after tool.

In addition to settlements, insurance for foreign trade operations is an important element of the financial framework. For BRICS and ASEAN countries, where a significant proportion of trade is carried out by sea, having their own mechanisms for insuring cargo and transit risks directly affects the cost and stability of trade flows.

The development of their own insurance instruments – ranging from export and import insurance to cover for transcontinental transport – could significantly reduce the transaction costs of trade. A similar logic applies to the settlement of commercial disputes: mutual recognition of arbitral awards and the harmonisation of dispute resolution procedures would enable economic operators to avoid having to resort to external jurisdictions.

The NBD’s potential as a source of project finance in ASEAN countries will depend on two conditions. Firstly, on the expansion of membership or the creation of lending mechanisms for countries that are not shareholders of the bank. Secondly, on the bank’s willingness to finance projects outside the founding member countries on market terms. As these mechanisms are still in the process of being established, the NBD should be regarded as a prospective rather than an operational instrument for financing ASEAN.

Constraints

Despite its significant potential, the development of economic cooperation between BRICS and ASEAN requires consideration of a number of specific factors. One of these is the difference in the scale of the economies. The economies of China and India are substantially larger than those of a number of ASEAN states. In these circumstances, it is important to identify mutually beneficial forms of cooperation that will expand market access, support local producers and ensure the sustainability of investment projects, including infrastructure projects.

The second area relates to geography and infrastructure. The considerable distance between a number of BRICS economies, both from one another and from the countries of Southeast Asia, affects the cost and duration of trade operations. Therefore, further convergence depends largely on the development of transport and logistics projects, which enhance regional connectivity and open up additional supply routes. The expansion of maritime, rail and port infrastructure has the potential to gradually reduce costs and create conditions for the growth of mutual trade.

Thirdly, there is regulatory incompatibility. Customs procedures, certification standards and sanitary regulations vary significantly. Harmonisation takes years and requires administrative resources. For companies, this entails additional costs and legal risks.

The fourth factor relates to the specific features of the BRICS institutional framework. The group is not a supranational economic entity with a unified regulatory system, and cooperation amongst its members develops in line with national priorities. BRICS documents largely define the general directions of cooperation, whilst leaving scope for specific bilateral and multilateral initiatives. Therefore, the development of relations with ASEAN depends, amongst other things, on how effectively the countries are able to align their priorities and pool their efforts in specific areas.

The development of transport and logistics links between BRICS and ASEAN deserves particular attention, as the expansion of mutual trade and the formation of new production chains depend largely on these links.

According to an expert on the economies of the BRICS and SCO countries, ASEAN, Associate Professor in the Department of Strategic and Innovative Development at the Financial University under the Government of the Russian Federation, Mikhail Khachaturyan, there are indeed constraints on the expansion of trade between BRICS and ASEAN, and they are significant, but they cannot be described as insurmountable – rather, they are bottlenecks that are gradually being overcome through joint projects. A key factor here is the development of transport and logistics chains, which are coming under increasing strain as trade volumes grow, and this is becoming a truly significant barrier.

Ports, rail and road corridors, and border crossings are operating at full capacity. To meet growing demand, capacity needs to be increased by at least 50 per cent in the coming years.

BRICS and ASEAN do not share a common territory. Some routes (for example, between Brazil or South Africa and the countries of Southeast Asia) inherently require long and complex journeys, which increases costs and delivery times, notes Khachaturyan.

Continuing on the subject of physical barriers, the expert also highlights administrative complexities.

“Different countries have varying railway track gauges, rolling stock specifications and containerisation requirements. This necessitates additional transhipments, which slows down the flow of goods through transport and logistics chains and leads to increased costs for shippers and consignees. Among the most significant factors are the lengthy customs clearance times at the borders of certain countries and the lack of uniform digital standards (such as electronic document management and real-time cargo tracking systems). These factors result in additional time losses and risks of trade deals falling through,” emphasised expert Mikhail Khachaturyan.

Despite the challenges, the process of convergence is already underway, and countries are actively seeking solutions.

“The BRICS and ASEAN countries are actively working to remove these and other barriers to mutual trade. The ‘North–South’ route is being developed, as are initiatives within the framework of China’s Belt and Road initiative. A striking example of local success is the commissioning of the Pinglu Canal in China: it has created a new river-sea route that has significantly shortened the journey for goods from China’s south-western provinces to ASEAN countries,” the expert noted.

Khachaturyan says that the BRICS and ASEAN countries are involved in the process of creating common digital platforms in areas such as the coordination of logistics processes, the exchange of data on trade and taxation, and the simplification and harmonisation of customs procedures. The New Development Bank serves as a tool for attracting investment in infrastructure projects. Efforts are underway to harmonise customs, sanitary and phytosanitary standards in order to reduce non-tariff barriers. The main challenge today lies in coordinating actions.

The most realistic scenarios for cooperation

Three development models are on the horizon up to 2035. The first is the inertial model. Trade volumes are growing, but institutional mechanisms remain weak, and investment cooperation is limited in scope. This is a scenario with minimal institutional burden, requiring no significant political effort, but one that does not create qualitatively new opportunities.

The second is the baseline scenario. Investors from China, India and the Gulf states are increasing their investment in ASEAN’s port, rail and energy infrastructure. A unified logistics framework is taking shape. The share of high value-added products is growing, and joint production ventures are developing. This scenario requires substantial investment with a long payback period but creates a long-term foundation for reducing the costs of cooperation.

The third scenario is the accelerated one. In addition to the baseline scenario, mechanisms for direct settlements in national currencies are introduced, swap lines are expanded and technological exchange is developed. ASEAN becomes not merely a consumer but a co-developer of technologies. This is the most far-reaching and institutionally complex scenario, and one that is sensitive to the quality of the regulatory environment.

The scenarios described are not merely theoretical. There are already concrete examples of how the model of networked interaction works at the level of individual economies. As Irina Rusak notes, what is of practical interest to Belarus is not simply the convergence of BRICS and ASEAN, but the formation of specific areas of cooperation – primarily in the fields of industry, food security, energy and logistics.

“Belarus’s recent high-level contacts with China, Indonesia and Myanmar confirm precisely this shift towards a practical focus: from the supply and servicing of equipment to local assembly, the training of specialists, the establishment of joint production facilities, and the development of the services sector (primarily tourism),” said expert Irina Rusak.

The most promising niche for Belarus is agro-industrial and engineering cooperation, involving local servicing, staff training and retraining, and the subsequent assembly of machinery in ASEAN countries. This was recently discussed during official high-level talks focusing on Indonesia. For example, Belarus and Myanmar signed a framework loan agreement, a contract for the supply of tractor kits, as well as agreements in the legal and economic spheres during the Myanmar President’s visit to Minsk in August this year.

ASEAN and BRICS are not moving towards a merger or the formation of a single institutional bloc. Their interaction is fundamentally different in nature: it involves the formation of a network in which economic interests, resource flows, production chains and financial infrastructure are intertwined without the creation of a rigid supranational structure.

It is precisely for this reason that the main outcome of this convergence may not be the emergence of a new integration group but rather a gradual reduction in the costs of interaction between existing economic systems. Cheaper logistics, more direct settlements, stable supply chains and more compatible regulatory procedures have the potential to gradually transform disparate projects into a sustainable economic network.

The article was prepared by Vakhit Niyazov.

African Times published this article in partnership with International Media Network TV BRICS