The Asean-China Free Trade Area was upgraded. Now what?
ACFTA 3.0 strengthens supply chain links and resilience, but Asean still needs diversification for true risk insurance
Add BT as a preferred source
THE Asean-China Free Trade Area (ACFTA) 3.0 was signed on Tuesday (Oct 28), at the 2025 Asean Summit. Praised by Malaysia Prime Minister Anwar Ibrahim as a pivotal milestone to strengthen the region’s collective economic resilience, the upgrade builds on a deeply intertwined relationship that has grown over two decades.
Bilateral trade surged from US$160 billion in 2006 to nearly US$1 trillion in 2024, making Asean China’s largest trading partner. Services trade expanded just as rapidly, from roughly US$19 billion in 2007 to over US$89 billion by 2023, driven by digital and professional services. Investment links also thickened: Chinese foreign direct investment (FDI) into Asean reached US$17.6 billion in 2023 (7.5 per cent of total inflows), cementing China as a top investor.
The upgraded ACFTA 3.0 aims to further bind regional supply chains and enhance resilience. But interdependence alone is not insurance – greater integration can mean overreliance and concentrated risks. To truly safeguard growth, Asean must continue diversifying trade while strengthening resilience with key partners.
TRENDING NOW
On the board but frozen out: The Taib family feud tearing Sarawak construction giant apart
OCBC consumer banking chief Sunny Quek aims to double wealth business by 2029
Thai and Vietnamese farmers may stop planting rice because of the Iran war. Here’s why
Hengli’s ex-Singapore unit dismisses staff after US sanctions, at risk of being wound down: sources
