Supply chain links deepen, cooperation extends to digital and green economies

China and the member states of the Association of Southeast Asian Nations are becoming more closely intertwined through trade, supply chains and consumer markets, with their economic ties extending beyond traditional areas of cooperation, said market watchers and business leaders.

That shift is gathering momentum as the China-ASEAN Free Trade Area 3.0 Upgrade Protocol, or CAFTA 3.0, and the Regional Comprehensive Economic Partnership, or RCEP, are expected to lower trade barriers and make it easier for companies to operate across regional markets.

As the two sides seek to inject new impetus into regional and global economic growth, China is working with ASEAN members to bring the upgraded protocol into force at an early date, according to information released this month by the Ministry of Commerce.

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The 23rd China-ASEAN Expo, which is scheduled to be held in Nanning, Guangxi Zhuang autonomous region, from Thursday through Monday, will focus on opportunities arising from CAFTA 3.0 and promote cooperation in new areas including the digital economy, green development and supply chain connectivity.

Xu Liping, director of the Chinese Academy of Social Sciences' Center for Southeast Asian Studies, said the China-ASEAN relationship is increasingly being shaped by the way production networks have spread across the region.

Chinese companies are sourcing, manufacturing and selling more within Southeast Asia, while ASEAN businesses are gaining greater access to China's vast consumer and industrial markets, Xu said.

Lin Honghong, vice-chairperson of the China Council for the Promotion of International Trade, noted that CAFTA 3.0 is extending business cooperation beyond traditional trade and investment to new areas such as the digital and green economies.

The agreement is also promoting closer links between industrial and supply chains across the region, creating more opportunities for companies on both sides, she said.

CAFTA 3.0, which was signed in Kuala Lumpur, Malaysia, in October 2025, marks the latest stage in the evolution of the China-ASEAN Free Trade Area. CAFTA was launched in 2002 and fully implemented in 2010. The upgraded CAFTA 2.0 protocol was signed in 2015, and it took full effect in 2019.

Data from the General Administration of Customs shows that the value of China-ASEAN trade reached 5.95 trillion yuan ($886 billion) in the first eight months of 2026, up 20.6 percent year-on-year.

Ruijie Networks Co, a manufacturer of switches, routers and network security equipment for data centers based in Fuzhou, Fujian province, saw its exports to ASEAN markets surge 93 percent year-on-year to reach 1.44 billion yuan between January and August.

Wang Chenyan, director of external relations at Fujian Star-net Communication Co, the parent company of Ruijie Networks, said that demand for networking equipment has grown rapidly in Southeast Asia, particularly in Singapore, Malaysia and Indonesia, amid rising investment in digital infrastructure and data centers.

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According to Fuzhou Customs, the value of Fujian-ASEAN trade reached 159.14 billion yuan in the first seven months of this year, up 4.9 percent year-on-year.

Futaihua Precision Industry (Weihai) Co, a manufacturer of printers and related equipment based in Weihai, Shandong province, imported over 300 million yuan worth of industrial components from Southeast Asian countries, including Cambodia and Malaysia, during the January-August period, a year-on-year increase of 320 percent.

Statistics from Qingdao Customs show that during the first seven months of this year, ASEAN was Shandong's largest source of imports, with shipments valued at 196.66 billion yuan, up 9.5 percent year-on-year, accounting for 22.8 percent of the province's total imports.

Contact the writers at zhongnan@chinadaily.com.cn