China-ASEAN economic and trade cooperation is demonstrating its strong vitality and new momentum

In the field of trade, China has remained the Association of Southeast Asian Nations' largest trading partner for 16 consecutive years, while ASEAN has been China's largest trading partner for five years in a row. Chinese enterprises are accelerating their presence in ASEAN markets, expanding investment, establishing local manufacturing facilities, and helping ASEAN countries speed up their industrial upgrading and energy transition. For instance, BYD has set up a factory in Thailand to produce electric vehicles, while CATL is leveraging Indonesia's rich nickel resources to build battery plants there. These investments and technological capabilities are helping ASEAN build a regional new energy vehicle industry chain. This reflects that the two sides' cooperation is evolving from traditional bilateral trade toward industrial chain collaboration.

A milestone in ASEAN's development came in May with the release of the ASEAN Community Vision 2045 at the 46th ASEAN Summit in Kuala Lumpur. This strategic document sets the direction for the bloc's growth and deepened regional cooperation over the next two decades. The Vision 2045 outlines ASEAN's plan to vigorously develop the digital economy and promote technological innovation. The document also stresses the importance of sustainable infrastructure and high-quality connectivity to facilitate regional trade and investment liberalization and facilitation, and promote deeper economic integration. To this end, ASEAN has formulated the ASEAN Economic Community Strategic Plan 2026-30 as the first-phase action plan for implementing ASEAN Community Vision 2045.

Externally, ASEAN has adopted a proactive and open posture in expanding its international partnerships. Both ASEAN Community Vision 2045 and the ASEAN Economic Community Strategic Plan 2026-30 will provide fresh momentum for ASEAN to deepen cooperation with external partners, including China, unlock the region's growth potential, and inject new vitality into global multilateralism. ASEAN as a whole is expected to become the world's fourth-largest economy by 2030, as envisioned in the ASEAN Community Vision 2045. China views ASEAN as a key region for high-quality Belt and Road cooperation. Both sides should explore ways to strengthen ties under the China-ASEAN Free Trade Area 3.0 Upgrade Protocol, which was signed in Kuala Lumpur on Oct 28, expanding cooperation in connectivity, the digital economy and green development to advance the comprehensive strategic partnership between China and ASEAN.

The China-ASEAN Free Trade Area covers a combined population of more than 2 billion, accounting for one-fourth of the world's total, and their combined GDP exceeds $20 trillion, making it one of the largest markets globally. In light of geopolitical shifts, rising uncertainties facing the global economy, and the United States' "reciprocal tariff" policies, China and ASEAN should work together to uphold a rules-based multilateral trading system and take concrete steps to support free trade and market openness.

On Oct 28, during the 28th China-ASEAN Summit, representatives from both sides signed the China-ASEAN Free Trade Area 3.0 Upgrade Protocol. The upgrade protocol makes commitments across nine key areas — customs procedures and trade facilitation, the digital economy, green economy, supply chain connectivity, competition and consumer protection, standards, technical regulations and conformity assessment procedures, economic and technical cooperation, sanitary and phytosanitary measures, and micro, small, and medium-sized enterprises — to further strengthen China-ASEAN cooperation. Implementation of the upgrade protocol will promote the free flow of goods and services between China and ASEAN, ensure the mutual opening of markets, and help build a more resilient regional industry and supply chain network, reducing dependence on external markets and mitigating potential risks. The protocol will also provide broader and more stable market opportunities for small and medium-sized enterprises in both ASEAN and China, fostering regional economic growth.

Once implemented, the upgraded FTA will create a stable and predictable business environment for enterprises on both sides, encouraging the expansion of operations and investment in each other's markets, particularly in emerging sectors such as the digital economy and green development.

Deepening economic and trade cooperation between China and ASEAN also requires addressing trade imbalances. The upgraded FTA will help improve the trade structure, increase ASEAN countries' exports to the Chinese market and promote more balanced bilateral trade development.

In terms of connectivity, ASEAN and China are deepening cooperation in infrastructure such as railways, ports, airports and telecommunications. In the digital economy, leveraging cutting-edge technologies and mature digital business models of Chinese enterprises — combined with local teams in Southeast Asia that design products tailored to local cultures — will help bridge the region's digital divide.

In the green economy, cooperation between the two sides will accelerate ASEAN's green energy transition and promote regional sustainable development.

In people-to-people exchanges, several ASEAN countries, such as Singapore, Thailand and Malaysia, have achieved mutual visa exemption with China, facilitating travel and boosting tourism and related service sectors.

The communiqué of the fourth plenary session of the 20th Central Committee of the Communist Party of China stated that during the 15th Five-Year Plan (2026-30) period, the nation will "take the initiative to open China wider, promote the innovative development of trade, create greater space for two-way investment cooperation".

This will create new opportunities for China and ASEAN to expand cooperation in trade, investment and industry chains over the next five years. Moreover, during this period, China is expected to focus on building a strong domestic market and implementing policies to boost domestic consumption, which will help ASEAN enterprises further grow their presence in the Chinese market and tap into new business opportunities.

ASEAN's decision to further deepen economic and trade ties with China reflects its commitment to advancing regional integration with China and building a more prosperous and dynamic regional economy. However, differences in development levels, diverse cultures and varying governance capacities among ASEAN members pose challenges for bilateral corporate cooperation. In addition, the increasingly complex geopolitical landscape and intensifying major-power competition present external challenges to the expansion of China-ASEAN cooperation, requiring both sides to handle these issues prudently and accommodate each other's concerns.

The author is a senior research fellow at the East Asian Institute at National University of Singapore. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.