Accelerating the China-Asean Green Corridor: A pathway to sustainable prosperity?

AS GLOBAL leaders increasingly prioritise sustainable growth and economic resilience, South-East Asia is uniquely positioned to capitalise on strategic international partnerships to advance its development agenda.

Central to this vision is the ambitious China-Asean Green Corridor initiative, aimed at integrating economic prosperity with environmental sustainability. This transformative framework holds immense potential to reshape the region’s economic trajectory and solidify Asean’s position as a global leader in sustainability.

The Green Corridor seeks to enhance collaboration in sustainable infrastructure, renewable energy, green technology and innovative financing mechanisms. Asean and China represent a vast market of nearly two billion people, with a combined gross domestic product exceeding US$23 trillion (RM98.43 trillion).

This immense economic landscape underscores the strategic significance and potential gains from collaborative sustainability initiatives.

Unlocking renewable energy potential in China and Asean

In 2024, China achieved significant milestones in renewable energy development. The country added 277 gigawatts (GW) of solar capacity, a 45.2% increase from 2023, bringing its total solar capacity to 887 GW.

Wind power capacity also grew by 18%, reaching nearly 521 GW.

Notably, China’s combined wind and solar capacity surpassed its thermal power capacity for the first time, highlighting a pivotal shift in its energy landscape.

Asean member states have also set ambitious renewable energy targets, such as Indonesia aiming for 23% renewable energy by 2025, and Vietnam targeting up to 20% by 2030.

Thus, Asean states are well-positioned to benefit from China's technological expertise, substantial financial resources and proven success in scaling renewable energy projects.

Economic gains and green investment opportunities

The economic benefits of the corridor are substantial. The International Renewable Energy Agency (Irena) estimates that renewable energy could generate approximately US$2.4 trillion (RM10.27 trillion) in investment opportunities in South-East Asia by 2030.

Furthermore, the United Nations projects that transitioning towards a green economy in the region could create over 30 million new jobs by 2030, significantly addressing unemployment and economic stagnation resulting from the Covid-19 pandemic.

Malaysia’s leadership in regional energy transition

Malaysia continues to strengthen its position within the Green Corridor framework through several recent initiatives. A notable development is the launch of the National Energy Transition Roadmap (NETR) Phase 2 in August 2024, which outlines a comprehensive strategy for achieving net-zero emissions by 2050.

Under this roadmap, Malaysia has announced large-scale renewable energy projects, including the Hydrogen Valley Project in Sarawak and the expansion of floating solar farms in several states.

The Hydrogen Valley initiative aims to transform Sarawak into South-East Asia’s leading producer of green hydrogen, leveraging Malaysia’s abundant renewable energy resources.

This project not only supports the domestic energy transition but also positions Malaysia as a key exporter of clean energy to the broader Asean region and beyond.

Emerging green infrastructure across Asean

Through these forward-looking projects, Malaysia demonstrates its commitment to sustainable energy leadership, setting new benchmarks for green innovation, regional collaboration, and energy security within the Green Corridor.

Other Asean countries are similarly advancing sustainable initiatives. For instance, Thailand’s collaboration with China continues with the development of the Ubol Ratana Dam 45-megawatt solar farm, exemplifying successful bilateral cooperation in renewable energy.

Furthermore, in 2024, Thailand and China jointly launched the Thai–China High-Speed Railway Phase 1, connecting Bangkok to Nakhon Ratchasima, with a strong emphasis on efficient, low-carbon transport systems.

Laos and China have expanded their cooperation by initiating the Vientiane Logistics Park (VLP) project in early 2024, complementing the China–Laos railway by promoting sustainable logistics, regional connectivity and green transport solutions.

These initiatives reflect the growing momentum of infrastructure connectivity across Asean, underpinned by a commitment to reducing carbon footprints and enhancing economic integration through sustainable means.

Overcoming structural challenges and disparities

Nevertheless, challenges persist in actualising this vision. Asean nations exhibit significant economic disparities, regulatory differences and varied capacities for technological adoption.

Wealthier states such as Singapore and Malaysia benefit from mature regulatory environments conducive to the rapid integration of green technologies.

In contrast, countries such as Myanmar, Cambodia and Laos face constraints, including limited financial resources, weaker governance frameworks and lower technological readiness.

Addressing these gaps necessitates targeted capacity-building programmes, robust technology transfer mechanisms and equitable financing solutions to ensure inclusivity and balanced regional growth.

Financing sustainability: Managing opportunities and risks

Financing green infrastructure remains another critical consideration. While China’s Belt and Road Initiative (BRI), particularly through institutions such as the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund, provides accessible financing vehicles, Asean nations must strategically manage debt sustainability.

Establishing transparent, accountable and equitable financing arrangements will be vital to ensuring long-term viability and mitigating potential debt trap scenarios, thereby reinforcing trust and cooperative stability.

The imperative of strong environmental governance

Strong environmental governance is equally crucial for the corridor’s success. Historically, large-scale development projects have sometimes undermined local ecosystems and community livelihoods because of inadequate environmental oversight.

Robust governance frameworks, rigorous environmental impact assessments, transparent stakeholder engagement processes and stringent adherence to international sustainability standards will be essential to prevent potential ecological and social harms.

Empowering communities through education and awareness

Finally, education and public awareness play an integral role in sustaining the corridor’s success.

Increased investment in sustainability education, public-private partnerships in research and development, and community-driven environmental initiatives can foster grassroots support and active participation across the region.

Encouraging local communities to engage in sustainable practices will ensure the long-term effectiveness and social acceptance of the Green Corridor.

Ultimately, the Green Corridor symbolises more than an economic opportunity – it represents a critical pivot towards sustainable prosperity and regional stability. Achieving this vision requires concerted, coordinated efforts among Asean member states and China, integrating economic development goals with robust environmental and social governance frameworks.

By navigating these complexities effectively, Asean could emerge as a global leader in sustainable development, demonstrating that international cooperation anchored in sustainability can yield substantial economic, environmental and diplomatic dividends.

Dr Lin Woon Leong is an Associate Professor at Taylor’s University, Taylor’s Business School. The views expressed here are entirely the writer’s own.

The SEARCH Scholar Series is a social responsibility programme jointly organised by the South-East Asia Research Centre for Humanities (SEARCH) and Tunku Abdul Rahman University of Management and Technology (TAR UMT).