China and ASEAN Strengthen Economic Ties with Upgraded Trade Pact

China and the Association of Southeast Asian Nations (ASEAN) have taken a major step toward deepening regional economic integration with the signing of the upgraded ASEAN-China Free Trade Area 3.0 agreement. The pact, announced during the ASEAN Summit in Kuala Lumpur, marks a milestone in trade cooperation amid growing global protectionism and geopolitical rivalries.

Expanded Agreement for a New Economic Era

The new version of the free trade pact broadens the scope of the original ASEAN-China Free Trade Area, which came into effect in 2010. The updated deal includes new areas such as digital trade, green economy initiatives, sustainable development, and support for small and medium-sized enterprises (SMEs).

Chinese Premier Li Qiang and Malaysian Prime Minister Anwar Ibrahim, this year’s ASEAN chair, witnessed the signing. Premier Li emphasized that deeper economic integration would help the region withstand global uncertainties and promote shared prosperity.

“Unity is strength,” Li remarked, underscoring the value of “mutual reliance” between China and its Southeast Asian partners. He also criticized rising protectionism, calling for open markets and regional collaboration.

Trade Grows Despite Global Rivalries

Since its implementation, the ASEAN-China trade pact has boosted two-way trade from $235.5 billion in 2010 to nearly $1 trillion in 2023, making China and ASEAN each other’s largest trading partners. Analysts say the upgraded deal reflects the trend of non-U.S. economies strengthening cross-regional partnerships in response to shifting global trade dynamics.

Southeast Asia analyst Bridget Welsh noted that this growing collaboration highlights how nations are “coming together to ensure prosperity despite ongoing tariff conflicts and supply chain restructuring.”

Balancing Between Superpowers

The trade signing took place as ASEAN leaders continue to navigate strategic competition between Beijing and Washington. U.S. President Donald Trump also attended the summit, promoting new trade initiatives with Cambodia, Malaysia, Thailand, and Vietnam while maintaining tariffs on Chinese goods.

Prime Minister Anwar emphasized ASEAN’s commitment to neutrality, stating, “The day before we were with President Donald Trump … and today we are back with China. That reflects ASEAN centrality.”

A planned meeting between Trump and Chinese President Xi Jinping in South Korea later this week is expected to further ease tensions between the two global powers.

Maritime Disputes Continue to Shadow Progress

Despite the economic optimism, territorial disputes in the South China Sea remain a point of contention. Philippine President Ferdinand Marcos Jr. welcomed the economic benefits of the pact but reiterated that “cooperation cannot exist alongside coercion,” condemning China’s “dangerous actions” toward Philippine vessels.

Several ASEAN nations — including Vietnam, Malaysia, and Brunei — share overlapping claims with China in the region. Marcos urged the acceleration of a Code of Conduct to manage tensions when the Philippines assumes the ASEAN chairmanship next year.

Meanwhile, Chinese officials accused Manila of deliberate provocations, reflecting that while trade ties are strengthening, political and territorial challenges persist.