ASEAN and China Upgrade to Free Trade Agreement 3.0
In the margins of the 47th ASEAN Summit 2025 (#ASEAN2025) in Kuala Lumpur, the 28th ASEAN-China Summit took place on 28 October 2025. Chinese Minister of Commerce WANG Wentao, and Malaysian Minister of Investment, Trade, & Industry cum ASEAN Economic Chair, Zafrul AZIZ, signed an upgraded Free Trade Agreement (#FTA) 3.0, as China faces decoupling risks at various degrees from the US and EU.
During the first three quarters of 2025, the trade volume between China and ASEAN amounted to USD 785 billion, representing a 9.6% growth over the same period in 2024. Comparatively, the China-US trade volume barely made it to USD 300 million, representing a sharp decline, as a consequence of Trump’s tough tariffs on China. As for the EU, the trade volume for the same periiod is estimated to be about USD 600 billion. Thus, ASEAN is the largest trading bloc of China in these turbulent times.
During this 2025 ASEAN Summit, Timor Leste was formally admitted as the 11th member state of #ASEAN. With a population of just 1.4 miliion and a national GDP just over USD 2 billion, Timor Leste is not expected to make a large contribution to the overall trade volume between ASEAN and China which is projected to exceed USD one trillion in the near future, but there is greater sense safety and chance of solidarity by being part of a larger grouping.
“The day before, we [ASEAN] were with US President Donald Trump, and today, we are back with China. That reflects ASEAN’s centrality, and I commmend and congratulate my colleagues, ASEAN, for the wisdom to maintain friendly relations with all our countries.”
Malaysia PM and ASEAN Chair Anwar Ibrahim
“Unilateralism and protectionism have seriously impacted the global economic and trade order, while external forces are increasing their interference in the region — many countries have been unreasonably subjected to high tariffs.”
China Premier LI Qiang
In a coomunique issued by China’s State Council, it is highlighted that the 3.0 deal between China and ASEAN is aimed at expanding cooperation in #DigitalTransformation, #RegionalIntegration, #EnergyTransition, #TradeFacilitation, and People-to-People (#P2P) Exchanges. Additionally, certain observers recckon that pharmaceuticals and infrastructure are likely to feature prominently in the cooperation between China and some of the ASEAN countries.
Both China and ASEAN are part of the Regional Comprehensive Economic Partnership (#RCEP), which covers one-third of the world’s population and accounts for 30% of the global GDP. On 27 October 2025, Malaysia hosted an RCEP Summit after five years.