Despite simmering tensions between China and its Southeast Asian neighbors, trade between them has risen significantly in recent years and the financial ties will only deepen, HSBC said.
"Despite the geopolitical complexities, trade and particularly investment between China and Asean [Association of Southeast Asian Nations] have a lot of room to deepen further, given their growing economic importance as global producers of goods, rising domestic demand and efforts to integrate economically through regional trade pacts," HSBC said in a report this week.
China has been involved in a recent series of spats with Vietnam, Japan and the Philippines over disputed areas of both the South and East China Seas, spurring concerns that the friction could lead to military conflict
But HSBC expects that while the tensions may put a few potholes in the road to trade growth, the path is already set.
"If recent history is any guide, then politicians and business leaders of Asean and China will pragmatically choose what is best for their economies and the welfare of their populations," HSBC said.
Trade between Southeast Asia and China has already grown.
It noted that China has been Asean's largest trading partner since 2009, overtaking Japan and the U.S., while Asean has been China's third-largest partner after the European Union and the U.S. since 2010.
But while two-way trade surged to $358 billion in 2013 from only $37 billion in 2000, foreign direct investment (FDI) has lagged and will likely drive the next leg of growth, HSBC said. China's FDI into the eight-nation Asean region only totaled $23 billion from 2003-2012, it noted. Going the other way, Thailand, Indonesia and the Philippines invested a combined $7 billion into China over the same period, HSBC said.
The region's demographics are likely to be a key driver of two-way investment, while Asean's population is relatively young, China's population is aging at a faster rate, with its labor force on track to shrink in 2019, HSBC said.
China has around 200 million people over the age of 60 and the number set to rise to over 400 million over the next 20 years -- higher than the population of the U.S. China's total population is estimated at around 1.39 billion.
"Labor intensive firms are increasingly diversifying out of China, favoring Asean's relatively less advanced economies such as Vietnam, Myanmar and Cambodia," HSBC said.
Others also believe trade within Asia is set for long-term growth.
"As it has for the past six years, Asia continues to drive Asia," David Carbon, chief economist at DBS, said in a recent note. "Asia is still managing to grow its exports at a 5 percent rate, thanks mainly to trade within the region itself," he said, noting that while exports to the U.S. have risen by around 3-4 percent, that's mainly due to the region's companies penetrating U.S. markets rather than U.S. import growth.
"It's intra-regional exports and domestic demand growth that drives the cycle today, not demand from the G3 [the U.S., the EU and Japan]. The shift in economic gravity from West to East is accelerating," Carbon said.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1