ACFTA 3.0: Will it match the promises of RCEP and CPTPP?

RECENT US tariff hikes on Chinese goods, including a quadrupling of duties on electric vehicles to 100 per cent, as well as markedly higher levies on various other products such as lithium-ion batteries, solar cells, and critical minerals have significantly shifted global trade dynamics. These new tariffs will not only push up US imports from South-east Asia but also nudge China closer towards Asean countries, emphasising the strategic need to revamp the Asean-China Free Trade Agreement (ACFTA).

Since 2009, China has maintained its status as Asean’s largest trading partner, and likewise the region has, since 2020, emerged as China’s biggest trading partner. Asean has also reaped substantial benefits from the shift of supply chains from China to countries like Vietnam, Malaysia, Indonesia and the Philippines.

Amid global challenges, China’s pivot towards becoming an innovation-driven economy, fuelled by advancements in technologies such as artificial intelligence, highlights South-east Asia’s critical role as a partner in fostering its technological self-reliance and expanding its market presence in digital infrastructure.