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China-ASEAN Free Trade Area 3.0: A Milestone in Regional Economic Integration
May 29, 2025 | China Trade News
Landmark Agreement Seals New Era of Cooperation
On May 20, 2025, China and the 10 ASEAN member states announced the successful conclusion of negotiations for the China-ASEAN Free Trade Area (CAFTA) 3.0 upgrade at the Special Meeting of China-ASEAN Ministers of Economic Affairs. This achievement builds on over two decades of bilateral collaboration, marking a pivotal step toward signing an upgraded protocol and deepening regional economic ties1.
On May 20, 2025, China and the 10 ASEAN member states announced the successful conclusion of negotiations for the China-ASEAN Free Trade Area (CAFTA) 3.0 upgrade at the Special Meeting of China-ASEAN Ministers of Economic Affairs. This achievement builds on over two decades of bilateral collaboration, marking a pivotal step toward signing an upgraded protocol and deepening regional economic ties1.
Economic Synergy: A Cornerstone of Global Trade
ASEAN has remained China’s largest trading partner since 2020, with bilateral trade hitting ¥7 trillion ($970 billion) in 2024—15.9% of China’s total foreign trade. Over the past 16 years, China has consistently been ASEAN’s top trade partner, while ASEAN has held the same position for China for five consecutive years. In Q1 2025, ASEAN’s share of China’s trade rose to 16.6%, underscoring the bloc’s critical role in China’s economic landscape1.
Against the backdrop of rising protectionism and unilateralism, CAFTA 3.0 reinforces the commitment of China and ASEAN to multilateralism and economic globalization. As WTO members, both parties aim to inject stability into global trade by fostering inclusive, rule-based cooperation1.
CAFTA 3.0: Innovating for the Future Economy
The upgraded agreement introduces groundbreaking provisions across eight new pillars, including:
- Digital Economy: Promoting cross-border data flows and e-commerce frameworks.
- Green Economy: Harmonizing standards for sustainable trade and low-carbon initiatives.
- Supply Chain Connectivity: Aligning with APEC’s vision to eliminate logistical bottlenecks and enhance multimodal infrastructure4.
- MSME Empowerment: Streamlining market access for small and medium-sized enterprises.
Notably, CAFTA 3.0 integrates APEC’s supply chain connectivity agenda, making it the first global trade pact to systematically address end-to-end logistics challenges. This includes digitizing customs procedures, improving infrastructure, and fostering green supply chain practices4.
APEC’s Blueprint and CAFTA 3.0’s Strategic Alignment
APEC’s Connectivity Blueprint—a framework to achieve seamless regional integration by 2025—identifies five key obstacles:
- Inefficient digital trade documentation (e.g., paper-based systems).
- Inadequate multimodal transportation networks.
- Limited digital collaboration in supply chain ecosystems.
- Gaps in green logistics standards.
- Insufficient support for MSMEs in global trade.
CAFTA 3.0 directly addresses these issues through joint commitments to:
- Free Flow of Critical Goods: Ensuring unimpeded trade in essential products and services.
- Infrastructure Modernization: Upgrading ports, railways, and digital platforms.
- Resilience Building: Collaborative measures to mitigate supply chain disruptions4.
Enterprises as Catalysts for Change
Businesses across China and ASEAN are encouraged to drive practical solutions, particularly in:
- Paperless Trade: Implementing e-Bills of Lading, e-invoices, and digital customs clearance.
- Green Logistics: Adopting sustainable packaging and carbon-neutral transportation.
- Digital Integration: Leveraging blockchain and AI for supply chain transparency.
These efforts will facilitate regulatory alignment and counter fragmentation risks, ensuring a robust regional supply chain network3.
CISCE: A Platform for Collaborative Progress
The China International Supply Chain Expo (CISCE), hosted by the China Council for the Promotion of International Trade (CCPIT), serves as a key venue for showcasing innovations. ASEAN enterprises, as regular participants, can share best practices in:
- Cross-Border Digitalization: Demonstrating e-port systems and real-time logistics tracking.
- Green Supply Chains: Highlighting circular economy models and eco-friendly technologies.
- MSME Collaboration: Facilitating partnerships to enhance market access.
CISCE’s role in institutionalizing CAFTA 3.0’s objectives reinforces its status as a global hub for supply chain excellence1.
Looking Ahead: A Resilient Future
CAFTA 3.0’s emphasis on inclusivity and innovation positions China-ASEAN as a model for post-pandemic economic recovery. By aligning with APEC’s connectivity goals and leveraging platforms like CISCE, the partnership aims to:
- Strengthen regional value chains.
- Promote digital and green trade leadership.
- Safeguard against geopolitical uncertainties.
As China and ASEAN prepare to sign the upgrade protocol, the world watches a collaboration that redefines regional economic integration—one that prioritizes shared prosperity and sustainable growth.
About the Author
Yao Weiqun is a member of the CCPIT Expert Committee and Executive Dean of the Shanghai Institute for International Trade Center Strategy at Shanghai University of International Business and Economics.
Yao Weiqun is a member of the CCPIT Expert Committee and Executive Dean of the Shanghai Institute for International Trade Center Strategy at Shanghai University of International Business and Economics.
