The 32nd APEC Ministers Responsible for Trade Meeting showed that Asia-Pacific economies are able to work together to build a regional community that prospers together

Geopolitical factors, including the Ukraine crisis and the situation in the Middle East, are impacting economic development in the Asia-Pacific region. The overall effects manifest in issues such as energy-driven inflation, trade disruptions, financial tightening, slowing growth and supply chain restructuring.

According to the United States’ Energy Information Administration, about 20 percent of the global liquefied natural gas trade transited the Strait of Hormuz in 2024, and the agency estimates that 80 percent to 90 percent of that LNG goes to Asian markets. The Middle East conflict has not only increased shipping risks in the Red Sea, leading to higher freight costs and longer voyages, but also pushed international oil prices from around $70 per barrel to over $100. Meanwhile, the Ukraine crisis has disrupted export routes for Russian crude oil and natural gas, as well as Black Sea grain and fertilizers. The spillover effects of Europe’s energy crisis have driven up natural gas, fertilizer and electricity prices in the Asia-Pacific region, raising costs for agriculture and manufacturing. Imported inflation remains high, while export-oriented economies face weakening orders and shrinking profit margins.

While the Ukraine crisis and the deteriorating situation in the Middle East continue to unfold, trade protectionism is also spreading unabated across the globe. Unilateral tariffs and sanctions bypass multilateral dispute settlement mechanisms, pushing global trade into a fragmented phase characterized by slowing growth and a “disorderly” governance landscape. Against this backdrop, short-term growing pains, long-term transformation, supply chain restructuring and accelerated regional cooperation have become realistic challenges that all members of the Asia-Pacific Economic Cooperation mechanism confront.

Nevertheless, it is widely recognized that the Asia-Pacific region remains a key engine of global economic growth, showing positive signs of development, particularly in the trade and economic sphere. Look at first-quarter export data and year-on-year growth rates: China reached 6.85 trillion yuan ($1 trillion), an increase of 11.9 percent; the Republic of Korea posted $219.9 billion, up 37.8 percent; and Vietnam recorded $122.93 billion, a rise of 19.1 percent. In addition, emerging economies such as Indonesia, Malaysia and Thailand also posted varied growth momentum. Led by the strong performance of these emerging economies, the Asia-Pacific region is demonstrating robust internal driving forces.

Digital services such as telemedicine, online education and fintech have emerged as new growth drivers in the digital economy. The Boao Forum for Asia Annual Conference released the Sustainable Development: Asia and the World Annual Report 2026 on March 24. It noted that the value of Asia’s digital economy reached $27 trillion in 2025, accounting for 46 percent of the region’s GDP. As of June 2025, China’s digital economy exceeded 50 trillion yuan, and its scale is projected to surpass 80 trillion yuan by 2030. Members of the Association of Southeast Asian Nations including Singapore, Malaysia and Indonesia have seen robust growth in their digital economies. Their combined volume topped $300 billion in 2025, 1.5 times the figure recorded a decade earlier.

According to HSBC research, trade related to artificial intelligence surged year-on-year in the first half of 2025. The Asia-Pacific region contributed nearly two-thirds of the global growth in that period. Widespread use of mobile payments and e-commerce has laid a solid foundation for digital trade across the region.

The rapid expansion of the Asia-Pacific digital economy is driving the accelerated development of regulatory frameworks. Progress continues in aligning cross-border e-commerce rules, promoting paperless trade and electronic bills of lading, and building a network of demonstration e-ports.

Meanwhile, the region is making coordinated progress in its green economic transformation. China’s exports of new energy products have driven regional green development, becoming a new growth engine. The completion of projects such as the Cirata floating solar power plant in Indonesia, built by a Chinese company, represents a landmark achievement of the China-Indonesia Belt and Road cooperation and will also promote Indonesia’s energy transition. Correspondingly, issues related to regional coordinated development and sustainable investment growth, including green standards, green minerals and carbon emissions standards, have drawn significant attention. The share of environmental, social and governance investment is gradually rising and the scale of green bond issuance is steadily expanding, providing financial support for the low-carbon transition.

Based on the above understanding, at the 32nd APEC Ministers Responsible for Trade Meeting held in Suzhou, Jiangsu province, representatives from 21 economies closely followed the APEC “China Year” theme of “Building an Asia-Pacific Community to Prosper Together”. Centered on openness, innovation and cooperation, they promoted stronger cooperation in areas such as regional economic integration, the construction of the Free Trade Area of the Asia-Pacific, support for the multilateral trading system, enhanced digital cooperation and development of the green economy. These efforts resulted in core outcomes including the Suzhou Statement that jointly foster an open regional economic environment, laying the groundwork for the APEC Economic Leaders’ Meeting in November.

The meeting also approved the updated APEC Roadmap for Innovative, Competitive and Resilient Services. All parties expressed support for the implementation of the outcomes of the 14th World Trade Organization Ministerial Conference and the advancing of the Free Trade Area of the Asia-Pacific. New consensus was reached on strengthening digital trade cooperation, particularly in areas such as cross-border data flows, digital trust and AI governance.

The current economic and trade landscape in the Asia-Pacific region is characterized by resilience, innovation-driven growth and deepening cooperation. Despite multiple challenges, the region is expected to maintain relatively stable momentum, driven by the strong performance of the digital and green economies, as well as continued regional collaboration.

The region is also a vital engine for global growth. APEC economies need to work together and respond calmly to the challenges. On the one hand, they can leverage regional collaboration to build consensus through multilateralism, thereby countering the impact of unilateralism and trade protectionism. On the other hand, they can promote a new pattern of regional economic integration and confidence-building measures, foster an inclusive Asia-Pacific partnership framework under the new circumstances, and establish a mutually beneficial and win-win collaborative mechanism within APEC, providing regional solutions for global governance.

The author is an associate research fellow at the Institute of World Economics and Politics and the National Institute for Global Strategy at the Chinese Academy of Social Sciences.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.