China and ASEAN share fruits of free trade

Editor's note: Gu Jiayun is vice dean of the School of Asian Studies, Beijing Foreign Studies University. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

The year 2025 marks a pivotal stage in the accelerated building of the China-Association of Southeast Asian Nations (ASEAN) community with a shared future. Following the launch of the first round of head-of-state diplomacy in 2025 through state visits to Vietnam, Malaysia, and Cambodia, Chinese Premier Li Qiang also traveled to Indonesia and Malaysia to attend the ASEAN-GCC-China Summit. Against the backdrop of the United States' abusive adoption of "reciprocal tariffs" and the serious disruption of the international economic and trade order, China and ASEAN have not only successfully concluded negotiations on the China-ASEAN Free Trade Area 3.0 (CAFTA 3.0) but also joined hands with the Gulf Cooperation Council (GCC) to pioneer new cooperation models. These efforts send a strong signal in support of multilateralism and free trade.

China and ASEAN are both beneficiaries of free trade. Launched in November 2022, the CAFTA 3.0 negotiations reached a substantive conclusion in just two years, bearing evidence to the clear consensus and strong willingness of both sides to cooperate. Over the past two decades, CAFTA has evolved from version 1.0 to 2.0, with both sides accumulating extensive cooperation experience, establishing a mature negotiation framework, and achieving fruitful outcomes. 

Nowadays, China and ASEAN have become each other's largest trading partners and key investment partners. Since 2013, trade between China and ASEAN has grown at an average annual rate of 7.5 percent. In 2024, their bilateral trade reached 6.99 trillion yuan ($970 billion). At the same time, China is ASEAN's second-largest source of foreign investment. In 2023, China's direct investment in ASEAN countries reached $25.12 billion, with over 7,400 Chinese-invested enterprises established across the region. That same year, ASEAN countries set up 2,887 new enterprises in China. By the end of 2023, Chinese companies had established more than 30 overseas economic and trade cooperation zones across ASEAN countries, attracting over 2,000 enterprises to operate within these zones. The "Two Countries, Twin Parks" initiatives between China and Malaysia and between China and Indonesia have injected fresh momentum into China-ASEAN economic and trade cooperation.

CAFTA 3.0 is shaping a new paradigm for regional cooperation. In addition to the areas already covered by bilateral free trade agreements, CAFTA 3.0 is expanding into nine emerging sectors, such as the digital economy and green economy. In terms of "soft connectivity" of rules and standards, both sides have reached the highest level of commitment to date in their respective treaty practices on technical standards, regulations, and conformity assessment procedures. In the future, the two sides will place greater emphasis on each other's practical conditions and needs when formulating technical standards, aiming to prevent trade barriers arising from divergence in standards. 

Furthermore, provisions that encourage mutual recognition of conformity assessment results and joint development of such procedures will help reduce certification costs for enterprises entering each other's markets and foster a more unified and transparent business environment. More than that, the inclusion of dedicated chapters on micro, small, and medium-sized enterprises in CAFTA 3.0 will create more favorable conditions for such businesses on both sides to access each other's markets. While advancing regional economic integration, these developments will create deeper, broader, and more substantive avenues for business cooperation.

The upgraded CAFTA 3.0 protocol is expected to be signed within the year, which means that China and ASEAN are sharing the fruits of free trade, advancing mutual openness, and expanding cooperation in emerging sectors and new quality productive forces. A massive China-ASEAN market is taking shape at an accelerated pace. Building on this foundation, the ASEAN-GCC-China Summit serves as a valuable extension of China-ASEAN trade cooperation, forming an innovative "China-ASEAN Plus" model. In an era where global trade is increasingly threatened by unilateralism and protectionism, China, ASEAN, and GCC countries are looking forward to diversifying their economic and trade partnerships, bringing greater stability and certainty to both regional and global economies through practical actions.

(Cover via CFP)