AT a time when unilateralism and protectionism are on the rise, how can today’s world-and our region in particular-foster greater certainty and momentum for development? Asean and China have jointly provided an answer.
On October 28, 2025, the two sides signed the Asean-China Free Trade Area (ACFTA) 3.0 Upgrade Protocol in Kuala Lumpur, Malaysia-a new milestone in Asean-China cooperation, and more importantly, a strong reaffirmation of their shared commitment to an open and inclusive world economy at a moment when solidarity and collaboration are most needed.
The ACFTA represents both a hard-earned achievement and a milestone of great significance for Asean-China trade relations. Negotiations for the ACFTA began in 2002, and its Version 1.0 was fully implemented in 2010. The subsequent Version 2.0, launched in 2015, enabled the free trade area to realize zero tariffs on over 90 percent of traded goods, reducing China’s average tariff on Asean products from 9.8 percent to just 0.1 percent. Benefiting from these policy dividends, China has remained Asean’s largest trading partner for 16 consecutive years, and the Philippines’ largest trading partner and source of imports for nine consecutive years. In the first three quarters of 2025, Asean-China trade reached RMB 5.57 trillion (approximately US$785 billion), marking a year-on-year increase of 9.6 percent and accounting for 16.6 percent of China’s total foreign trade. Despite global uncertainties, Asean continues to stand as China’s top trading partner, underscoring the resilience and vitality of their economic partnership.
Negotiations for the Version 3.0 upgrade commenced in November 2022 and were successfully concluded in May 2025. The newly signed Protocol encompasses nine major areas aimed at fostering broader, deeper, and more forward-looking cooperation. Notably, the upgraded FTA extends beyond traditional trade and investment liberalization and facilitation, addressing a wide range of emerging fields such as the digital economy, the green economy, and industrial and supply chains. By further removing institutional barriers, the Protocol establishes higher-level frameworks that will advance regional cooperation from the flow of production factors toward institutional integration. It also places greater emphasis on micro, small, and medium-sized enterprises (MSMEs), thereby contributing to a more resilient Asean-China industrial and supply chain and further deepening regional economic integration. ACFTA Protocol will be seen as a ‘stabilizer’ for global free trade. At a time when the world is facing significant uncertainties, the signing of the Protocol carries profound importance:
First, the signing of the Protocol demonstrates concrete action in support of multilateralism and free trade at a time when certain unilateral tariff measures have disrupted the international economic and trade system, adversely affecting many economies, including the Philippines and other Asean member states. It represents the shared commitment of Asean and China to promoting stability and certainty in regional and global economic development.
Second, the Protocol marks a new milestone in deepening regional economic integration. It signifies that Asean-China FTA cooperation will extend from traditional areas to a broader range of emerging fields. China, which accounts for around 30 percent of global manufacturing value added and has served as the world’s largest manufacturing base for 15 consecutive years, will join hands with Asean-an increasingly dynamic manufacturing hub-to further strengthen and complement regional industrial and supply chains. This cooperation will help the region respond effectively to attempts at decoupling and supply chain disruptions.
Third, the Protocol will also give strong impetus to the building of an Asean-China community with a shared future. China and Asean are close neighbors with a combined population of over two billion. In 2024, their collective GDP exceeded $22 trillion, representing about one-fifth of the global total. The more turbulent the world becomes, the more precious Asean-China unity proves to be. By working together, the two sides are building an Asean-China community with a shared future-one that will ensure the region remains a sea of stability, a land of opportunity, and a home of harmony.