hina’s Ministry of Commerce announced on May 21 that China and ASEAN countries have completed negotiations on Version 3.0 of the China-ASEAN Free Trade Area (CAFTA), following a special ASEAN-China foreign ministers’ meeting held the previous day in Thailand. Negotiations on the latest iteration of the free trade deal started in November 2022, with nine rounds of talks and more than 100 working group meetings over more than two years.
The timing of the negotiations’ conclusion is particularly significant. In the past couple of years, the world has undergone intensifying geopolitical turbulence and trade protectionism in the West.
Compared with earlier versions of CAFTA, which primarily focused on tariff reductions and trade in goods, CAFTA 3.0 highlights new areas of cooperation, including the digital economy, green development and supply chain connectivity, which will become new engines of growth for both China and ASEAN.
More importantly, the two sides have shifted their focus to mutual recognition of standards and regulatory alignment. Rulemaking has been formally incorporated into the free trade framework.
In addition, CAFTA 3.0 aims to rebuild regional industrial, value and supply chains, which is expected to enhance the resilience of regional cooperation built on institutional openness and rule-based coordination.
While trade in goods still forms the backbone of China-ASEAN economic ties, the door is opening to the services trade, particularly in the finance, education, healthcare and digital sectors, driven by rapid technological advances and the demands of Industry 4.0.
Cross-border e-commerce, powered by the digital economy and AI, is playing an increasingly vital role, although both sides need to strengthen digital infrastructure and cooperation in areas such as customs procedures, data flow, cybersecurity and privacy standards to support a unified China-ASEAN digital market.
Sustainable development is another key pillar of CAFTA 3.0. China and ASEAN are expected to work more closely on building a clean energy market, linking carbon markets and enabling cross-border carbon trading. Institutions like the Asian Infrastructure Investment Bank and the Silk Road Fund will play a role in financing green projects and promoting common infrastructure standards.
The two sides are also exploring breakthroughs beyond the region. On May 27 and 28, the inaugural ASEAN-China-Gulf Cooperation Council (GCC) Summit was held in Kuala Lumpur, Malaysia, which agreed on “charting a unified and collective path toward a peaceful, prosperous and just future.”
China has maintained close economic relations with both ASEAN and the GCC. The GCC, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has also recently strengthened its relations with ASEAN. The two regions held their first summit in Saudi Arabia in October 2023, and they convened the 2nd ASEAN-GCC Summit on May 27, before China joined for the trilateral meeting.
With a combined market of more than two billion people, trilateral cooperation among the three regions will mark a new wave of regional economic integration, boosting economic resilience across Asia and further raising the global strategic importance of ChinaASEAN cooperation.
This means a stronger commitment to multilateralism, deeper market opening and greater alignment in standards and policies.
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