China, ASEAN Upgrade Free Trade Deal to Boost Digital and Green Cooperation Amid U.S. Trade Tensions:

China and the Association of Southeast Asian Nations (ASEAN) have signed an upgraded free trade agreement, deepening economic ties as both sides seek stability amid growing global trade tensions. The new ASEAN-China Free Trade Area (ACFTA 3.0) was inked on the sidelines of the 47th ASEAN Summit in Kuala Lumpur on Tuesday. The signing ceremony was witnessed by Chinese Premier Li Qiang and Malaysian Prime Minister Anwar Ibrahim. According to China’s State Council, the “3.0 version” of the deal expands cooperation beyond traditional trade to include infrastructure, digital economy, green transition, trade facilitation, and people-to-people exchanges. It updates the original ACFTA, which came into force in 2010, reflecting how regional economies have evolved over the past decade. China and ASEAN Strengthen Supply Chain Links China and ASEAN have become each other’s largest trading partners in recent years, thanks in part to the “China Plus One” supply chain strategy that gained momentum after the U.S.–China trade war in 2018. In the first nine months of 2025 alone, trade between China and ASEAN reached $785 billion, up 9.6 percent from the same period last year. Much of this trade involves integrated manufacturing supply chains — from electronics and machinery to automotive parts — but consumer goods exports from China to Southeast Asian markets are also rising fast. Premier Li praised the growing partnership, saying the upgraded deal will lead to “expanded and higher-quality economic cooperation.” He emphasized that cooperation between China and ASEAN has produced “fruitful results” and will continue to strengthen through closer economic and cultural exchanges. A Strategic Move Amid U.S. Protectionism The signing comes as China faces escalating trade frictions with the United States and the European Union. Li Qiang indirectly criticized U.S. trade policies during the summit, warning that “unilateralism and protectionism have seriously disrupted the global economic and trade order.” He also noted that “external forces” have been interfering in regional affairs and that many countries have faced unfairly high tariffs — a clear reference to U.S. President Donald Trump’s renewed tariff measures. Trump, who also attended the ASEAN Summit earlier in the week, signed separate trade deals with Cambodia and Malaysia, as well as framework agreements with Thailand and Vietnam. These bilateral pacts included “reciprocal tariff” rates between 19 and 20 percent, underscoring Washington’s preference for one-on-one trade negotiations instead of large multilateral agreements. Analysts Call It a ‘Win-Win’ for Both Sides Experts say the upgraded pact reflects China’s effort to secure stronger regional alliances as it faces growing trade barriers in the West. Zhiwu Chen, a finance professor at the University of Hong Kong, told Al Jazeera that the deal represents “a win-win outcome” for both China and ASEAN. “This is very important for China, as its trade tensions with the U.S. and EU have been rising. At the same time, ASEAN can take advantage of the opportunity to deepen ties with the world’s second-largest economy,” Chen said. A New Chapter in Asia-Pacific Trade The ACFTA 3.0 deal will now undergo domestic legal reviews and ratification before coming fully into force. Once implemented, it is expected to set new standards for digital trade, green development, and supply chain integration in the Asia-Pacific region. For ASEAN, it means greater access to Chinese investment, technology, and markets. For China, it provides a vital economic bridge to Southeast Asia — helping it offset pressures from U.S. tariffs and maintain momentum in regional trade. As the global trade landscape continues to shift, the upgraded China-ASEAN pact underscores both sides’ commitment to open, inclusive, and sustainable economic cooperation — positioning Asia at the heart of the next phase of global growth.

NEWS