China and ASEAN Sign Protocol to Upgrade Free Trade Area to Version 3.0

In a ceremony witnessed by Chinese Premier Li Qiang and ASEAN leaders, including Malaysian Prime Minister Anwar Ibrahim, the Protocol on the Upgrading of the China-ASEAN Free Trade Area (FTA) Version 3.0 was formally signed on October 28th in Kuala Lumpur, Malaysia.

Chinese Minister of Commerce Wang Wentao and Malaysian Minister of Investment, Trade and Industry Tengku Zafrul signed the document on behalf of China and the Association of Southeast Asian Nations (ASEAN), respectively.

The agreement marks a major milestone in a partnership that began in 2002, when China and ASEAN initiated the process of establishing a free trade area. The FTA 1.0 version was fully implemented in 2010, followed by an upgraded 2.0 version in 2015. The 3.0 version negotiations were formally launched in November 2022 and concluded in May 2025.

An official from the Department of International Trade and Economic Cooperation of China’s Ministry of Commerce outlined the key features of the upgraded protocol, stating it aims to 'advance open, mutually beneficial and inclusive cooperation' in line with new trends in global trade and economics.

Three Key Features of the Upgraded FTA

1. Expansion into New Areas

The 3.0 version introduces five new areas of cooperation: the digital economy, green economy, supply chain connectivity, competition and consumer protection, and small and medium-sized enterprises (SMEs). This reflects both sides’ commitment to shaping international rules and deepening collaboration in emerging sectors. The inclusion of supply chain connectivity, the green economy, and consumer protection is described as a 'groundbreaking' step in China-ASEAN free trade relations.

2. Higher Level of Openness

Building on existing market access commitments for goods, services, and investment under FTA 1.0, 2.0, and the Regional Comprehensive Economic Partnership (RCEP), Version 3.0 establishes the highest level of commitments in the FTA history between China and ASEAN. It sets systematic frameworks for both traditional 'at the border' areas, such as trade facilitation, and newer 'beyond the border' fields, including digital, green, and supply chain cooperation.

3. Inclusive Development Focus

The upgraded agreement integrates provisions on competition, consumer protection, SMEs, and economic and technical cooperation. It aims to ensure fair competition among businesses, protect consumer rights, support SME development, and enhance the capacity of the least developed countries in the region. These measures are intended to help ensure that enterprises and citizens across China and ASEAN benefit equitably from regional economic growth.

The signing of the protocol signals a strengthened commitment to building a regional integrated market and supply chain system, supporting high-quality development in one of the world’s most dynamic economic regions.