In recent years, economic collaboration between China and the Association of Southeast Asian Nations (ASEAN) has intensified, particularly through the effective implementation of the Regional Comprehensive Economic Partnership (RCEP) and the China-ASEAN Free Trade Agreement (FTA).

This partnership has yielded substantial results, with bilateral merchandise trade reaching record highs, characterized by strong resilience.

The service sector is witnessing a rapid rebound, reflecting significant potential for further growth, while bilateral investments are increasingly recognized as a key driver of regional economic development.

The global economic landscape is currently marked by heightened uncertainty, driven by rising geopolitical tensions and a surge in protectionist and unilateral trade policies.

In this context, China and ASEAN countries are motivated to leverage their trade agreements, including the RCEP and the China-ASEAN FTA, to foster a stable and foreseeable economic environment conducive to regional collaboration.

Since its full implementation in 2021, the RCEP has established improved cooperative mechanisms, with China and ASEAN member states initiating the formation of four subsidiary bodies under the RCEP Joint Committee focused on goods, services and investment, sustainable growth, and business environment.

Additionally, discussions regarding the accession of new members to the RCEP framework have advanced, marking a significant step toward broader regional cooperation.

The China-ASEAN Free Trade Area, initiated in 2002, has recently progressed into its upgraded 3.0 version, with negotiations commenced in 2022 and substantially concluded in 2024. This evolution from the initial agreements demonstrates the deepening economic ties and a collective commitment to address external challenges through increased integration and cooperation.

This comprehensive free trade framework has heightened regional policy connectivity, enhancing the already existing China-ASEAN FTA by integrating tariff reductions and implementing higher standards for customs procedures.

This advancement has notably increased the efficiency and liberalization in goods trade.

Investment liberalization under RCEP employs a negative list approach, which incorporates high-standard regulations on various aspects such as intellectual property, e-commerce, government procurement, and competition.

These initiatives are fostering regulatory alignment and market integration across the region.

In terms of merchandise trade, China has maintained its position as ASEAN's largest trading partner for over 16 years, and ASEAN has reciprocated by remaining China's top trade partner for five years.

Bilateral goods trade experienced significant growth in 2024, reaching nearly 7 trillion yuan (approximately $971.6 billion), which translates to a year-on-year rise of 9 percent, exceeding the overall growth rate of China's foreign trade by 4 percentage points.

Furthermore, the service trade sector has shown promising recovery, significantly enhancing people-to-people connectivity and contributing to the growth of logistics, finance, and insurance services.

Investment dynamics have also strengthened, with China’s direct investments in ASEAN reaching $12.96 billion in the first seven months of 2024, reflecting a 15.3 percent increase from the previous year.

Conversely, investments from ASEAN to China totaled $7.3 billion during the same period, marking a 14.1 percent increase.

Cumulatively, bilateral investments have surpassed $400 billion, bolstering economic stability and development on both sides.

Cooperation in emerging trade frameworks, notably in digital and green economies, is being prioritized within the upgraded version of the China-ASEAN FTA.

E-commerce rules established under RCEP facilitate deeper digital economic interactions, with significant growth observed in cross-border e-commerce activities.

Chinese enterprises have engaged constructively in developing digital infrastructure across ASEAN, collaborating with local firms on innovative applications of digital technologies.

As both China and ASEAN work towards sustainable economic transitions, areas such as new energy vehicles, lithium battery technology, and photovoltaics are becoming focal points for collaboration, indicative of a commitment to fostering growth in the green economy.

To further enhance regional economic openness, efforts are underway to upgrade cooperation frameworks between China and ASEAN.

The focus remains on optimizing the RCEP and advancing the Version 3.0 China-ASEAN FTA to eliminate tariffs and non-tariff barriers, streamline customs procedures, improve rules of origin, and liberalize access to services and investments.

Both parties aspire to implement measures that will facilitate effective coordination for maximizing the benefits derived from free trade agreements, with particular emphasis placed on empowering small and medium-sized enterprises (SMEs) to better navigate international trade dynamics.

Additionally, a commitment to enhancing cooperation in digital and green economies is anticipated to promote regulatory harmonization and mutual recognition of standards in these evolving sectors.