On October 28th 2025, China and ASEAN joined together to sign an upgraded version of their free trade agreement – ASEAN-China Free Trade Area 3.0. This signing took place during the 47th ASEAN Summit held in Kuala Lumpur Malaysia; Chinese Premier Li Qiang and Malaysian Prime Minister Anwar Ibrahim attended to witness this historic occasion (Al Jazeera).
Background and Context
The ACFTA 3.0 builds upon the original agreement first signed in 2002 and implemented in 2010. Negotiations began for its current upgrade in November 2022 and concluded five years later in May 2025.
This enhanced Pact seeks to deepen economic integration between China and ASEAN, including new areas such as digital economy, green economy, supply chain connectivity and support for small and medium-sized enterprises (SMEs) mes euronews. Key Provisions of ACFTA 3.0
Digital Economy: This agreement includes provisions to promote digital trade, such as integrating digital infrastructure and electronic payment systems for increased e-commerce and connectivity throughout the region. gemeinschaft. europanews
Green Economy: It promotes cooperation in green energy, sustainability and environmental protection to combat climate change and promote sustainable development, aligning with global efforts against it and to support sustainable development.. Euronews/Worldnews
Connectivity of Supply Chains: This pact seeks to strengthen supply chain resilience through improved trade facilitation measures and reduction of non-tariff barriers, in turn increasing efficiency of regional supply chains, according to euronews.
SME Support: Recognizing their significance to ASEAN economies, this agreement includes measures to increase market access and provide technical assistance to small- and medium-sized enterprises (SMEs). Euronews
Considerations Amid U.S. Tariffs
At a time of increased trade tension between China and the U.S. under President Donald Trump’s tariffs on imports from the latter nation, which have inflamed relations. China responded by touting ACFTA 3.0 as evidence of their commitment to multilateralism and free trade versus what they view as protectionist policies in Washington D.C.
Premier Li Qiang highlighted the significance of unity and cooperation, asserting that confrontation instead of solidarity would bring no tangible benefits to China’s efforts to strengthen economic ties with ASEAN nations while lessening dependence on U.S. markets. His remarks echo China’s current strategy of diversifying markets while consolidating relationships.
Economic Impact This upgraded agreement should further increase trade between China and ASEAN, which has already experienced considerable expansion since 2010. Bilateral trade rose from $235.5 billion in 2010 to almost $1 trillion by 2024.
Through strengthening cooperation in emerging sectors such as digital and green economies, ACFTA 3.0 hopes to diversify economic engagements while encouraging sustainable development within its region.
Conclusion
China and ASEAN’s signing of ACFTA 3.0 represents an important step toward deepening their economic integration. Amid U.S. protectionism, this enhanced agreement underscores a shared commitment to multilateralism and free trade. With both parties grappling with complex global trade dynamics, ACFTA 3.0 could play an instrumental role in shaping its future economic landscape of Asia-Pacific region.