China ASEAN push for upgraded free-trade pact amid global shifts

Post by :

Photo:Reuters

China is preparing to strengthen its trade relationship with the Association of Southeast Asian Nations (ASEAN) by upgrading their free-trade deal this year. This step shows Beijing’s focus on expanding exports and securing deeper economic cooperation with its largest trading partner, especially at a time when global supply chains are shifting and competition is growing.

What China Plans with ASEAN

On Monday, Vice-Minister of Commerce Yan Dong confirmed that China and ASEAN will work together to finish all domestic approval procedures and aim to officially sign the China-ASEAN Free Trade Area (CAFTA) 3.0 upgrade protocol by the end of 2025.

The two sides already completed negotiations in May this year. This cleared the way for wider cooperation in agriculture, digital trade, and pharmaceuticals. This means farmers, technology companies, and medicine producers across both regions will have more opportunities to expand their businesses.

New Areas of Cooperation

China and ASEAN have agreed to strengthen their partnership in nine important areas. These include:

* Expanding digital economy projects such as faster mobile payments, better e-commerce systems, and advanced internet services.

* Pushing forward the green economy, with a focus on renewable energy, low-carbon industries, and eco-friendly technologies.

* Using artificial intelligence (AI), big data, and modern technology to upgrade industries and supply chains.

By upgrading CAFTA to version 3.0, China hopes to modernize trade rules so that both sides can benefit from new industries rather than depending only on traditional manufacturing and exports.

Why This Deal Matters Now

The timing of this deal is very important. The world is facing rising US protectionism, with Washington imposing more tariffs on Asian goods. By strengthening ties with ASEAN, China is creating stronger regional trade networks that are less dependent on the US.

China is also looking to secure long-term markets, as demand from the US has slowed down. Recent data highlights ASEAN’s growing importance: in August 2025 alone, China’s exports to ASEAN countries increased by 22.5% compared to the previous year.

A Strong Trade Partnership

The China-ASEAN free-trade area first started in 2010 and was upgraded to version 2.0 in 2019, which included deeper tariff cuts and new rules on investment. Talks on the current 3.0 upgrade began in 2022, focusing on the digital economy, green development, and supply-chain security.

For the last five years, China and ASEAN have been each other’s largest trading partners. In the first eight months of 2025, total bilateral trade reached US$686.8 billion, showing an increase of 8.6% compared to the same period last year. This trade accounted for 16.7% of China’s total foreign trade.

Spotlight on the China-ASEAN Expo

The announcement also comes just ahead of the 22nd China-ASEAN Expo, which will take place from September 17–21 in Nanning, a city in Guangxi province.

The annual event will bring together leaders and companies from 45 countries, with about 3,200 firms expected to participate. This year’s expo will showcase new industries and cooperation projects, reflecting China’s intention to highlight emerging industries.

Special new sections at the expo will focus on:

* Artificial Intelligence (AI) and its applications in business and industry.

* Advanced manufacturing technologies to improve productivity.

* The blue economy, which covers maritime sectors like fisheries, offshore energy, marine tourism, and shipping.

The exhibition space will cover 160,000 square meters (1.7 million sq ft), making it one of the largest trade showcases in the region.

What This Means for the Future

This trade upgrade is not just about goods and tariffs—it represents a shift towards the industries of the future. By working together in green development, digital innovation, and high-tech industries, both China and ASEAN are preparing their economies for long-term growth.

For ASEAN, the deal provides a chance to attract investment, boost e-commerce, and create more opportunities for small businesses. For China, it secures strong regional ties and reduces risks from its ongoing trade tensions with the US.

China-ASEAN free trade