Asean-China trade pact update could not have come at a better time

China and the Association of Southeast Asian Nations – two key players in the Global South – account for a quarter of the world’s population and a fifth of global gross domestic product, contributing to over 30 per cent of global economic growth.

In July, Chinese Foreign Minister Wang Yi announced that both sides would submit the “3.0 version” of the China-Asean Free Trade Agreement for approval in October. This signals a push to future-proof Asia’s trade flows amid renewed US protectionism and intensifying global competition. With negotiations over, the pact is expected to be signed by the end of 2025.

The initial version of the free trade pact was Asean’s first with an external partner. The latest upgrade is set to expand cooperation across nine areas, such as digital and green economies.

Since the agreement’s inception in 2010, Asean’s trade with China has almost tripled – from US$235.5 billion in 2010 to US$696.7 billion in 2023. China has been the bloc’s largest trading partner for 16 consecutive years. Asean has also become China’s top trading partner for the past five years. Last year, bilateral trade almost reached US$1 trillion. In the first four months of 2025, trade reached US$330.86 billion, a 9.2 per cent year-on-year jump.

Upgrading the pact benefits both sides. It gives Asean countries a chance to deepen regional integration and reinforce supply chains amid rising geopolitical uncertainty. A 2023 HSBC survey found that 92 per cent of Indonesian, 87 per cent of Filipino and 89 per cent of Vietnamese companies expect supply chain growth with China through 2026.

South China Morning Post