To boost integration and growth within the region’s economy, China and ASEAN have signed a new version of the free trade agreement, which these parties have called China-ASEAN 3.0. This version will focus on digital transformation and green growth. This free trade agreement comes at a time of increased protectionism in the global economy and growing trade tensions between the U.S. and China.
A shift in strategy for China and ASEAN
This change improves China and ASEAN’s global market share in pivotal areas of trade and investment, including agriculture, digital economies, and the ever-important in a post-pandemic world, the health sector.
Moreover, the agreement strengthens regionally oriented patterns of cooperation on sustainable development, which shows ASEAN’s willingness to focus on green growth.
At a press conference in Beijing, Yan Dong, quoted in the article, says:
“China and ASEAN have practiced multilateral cooperation and maintained the stability and smooth operation of industrial chains.”
These statements seem to be a response to increasing tariffs that have recently been implemented on China and certain other economies in Asia.
Chinese trade economists argue that the U.S.’s tariffs on China’s goods will be the highest in the world according to experts.
China is eager to blend these new international trade corridors into its export portfolios
The exports from the China region touched 22.5% of the total $57.1 billion by the end of September. This was an astonishing 33.1% increase from the dip in exports to the United States.
The new agreement will probably accelerate economic settlement, include digital trade, improve personal private data and cross-border protection, and most of all, increase the level of innovation and aid for the SME’s.
Lt Daliang of China’s General Administration of Customs said the following:
“China and ASEAN are the largest trading partners with a solid foundation of cooperation and a huge development potential.”
According to experts, the agreement is an important first step in creating a more connected digital region in Asia, especially as the ASEM region continues to pursue a more integrated Digital Economy Agreement (DEFA) to accelerate digital transformation of the region.
Another key component of the new trade agreement is green growth
This includes advancing the sustainable agriculture practice, decreasing greenhouse gas emissions through cutting off carbon-emitting supply chains, and increasing investment in renewable energy technologies.
These are in line with the overall climate targets of ASEAN and with China’s ambition to become the global leader in green innovation and technology.
Other than China, the Regional Comprehensive Economic Partnership includes China, ASEAN, Japan, the Republic of Korea, Australia, and New Zealand, and other regional frameworks. The agreement also adds to the RCEP.
Agreements like RCEP have been criticized in the past for not including cross-border e-commerce and environmental issues. The China-ASEAN 3.0 aims to tackle these issues by deepening commitments to e-commerce and environmental action.
China has also applied to the CPTPP
China’s application to the CPTPP has shown China’s willingness to take on more “responsible” and obligations to “shape” trade.
Some trade experts point out that the newly upgraded ASEAN agreement could help China meet trade standards, albeit with a small amount of inter-member state political friction.
The new growth and integration means that ASEAN member states can collaborate with China now on digital as well as green projects this in turn will bring more Chinese investors and resources and improve competition in the ASEAN region.
Cost and climate change are common concerns everywhere, and the China-ASEAN FTA 3.0 outlines how cooperation works. It outlines collaboration on fundamental values. Values like the economic and technological development equilibrium and the environment all of which hold premium value in today’s world.