[Source/Observer Network Qi Qian] On May 20th, the China-ASEAN Economic and Trade Ministers' Special Meeting was held online, where both sides' economic and trade ministers jointly announced the full completion of the negotiations for the upgrade of the China-ASEAN Free Trade Area to version 3.0. This news caught the attention of the Hong Kong media, the South China Morning Post, which published an article on May 22nd stating that amidst the ongoing trade tensions between China and the United States, China's economic and trade cooperation with ASEAN has strengthened its regional influence.

At the same time, the report cited analysis suggesting that the timing of this announcement of the conclusion of the negotiations was carefully chosen, potentially becoming a powerful "chip" in China and ASEAN countries' trade negotiations with the United States.

In early April, U.S. President Trump raised the tariff cudgel worldwide. After announcing a 90-day suspension of "reciprocal tariffs," he continued to threaten countries with high tariffs if trade negotiations were not successful. Many countries, including ASEAN nations, sought to reach trade agreements with the United States during this period before the suspension ended on July 9th.

The South China Morning Post mentioned that the negotiations for the upgrade of the China-ASEAN Free Trade Area to version 3.0 have lasted nearly two years, with nine rounds of formal talks completed.

Xu Weijun, a researcher at the Institute of Public Policy of South China University of Technology, said he believed that the timing of the conclusion of these negotiations was crucial, "carefully selected." He stated: "The negotiations began several years ago, but Trump's tariff shock in April may have made China and ASEAN realize their common interests, accelerating the negotiation process. Now this message has been announced."

Xu Weijun noted that amid the U.S. tariff war, China can present this trade agreement as proof of ASEAN's independence and its default refusal to follow Washington's orders. He pointed out: "Before future tariff negotiations with the United States, China has achieved another victory in trade diversification."

A report released by Rhodium Group at the end of April showed that since the beginning of Trump's first term, ASEAN has become China's largest destination for foreign direct investment in manufacturing, based on announced transaction numbers. Data shows that more than 86% of total investment flowed into industries such as automobiles, information and communication technology, electronics, renewable energy equipment, and consumer goods.

In 2024, China and ASEAN have continuously been each other's largest trading partners for five consecutive years, with bilateral trade increasing by 7.8% year-on-year to $982.3 billion.

Data shows that ASEAN has become China's largest destination for foreign direct investment in manufacturing. South China Morning Post chart.

Xu Weijun continued to state that Hong Kong, China, has also signed a free trade agreement with ASEAN, leveraging its position as a major transshipment port and financial center to promote trade flows between mainland China and ASEAN. "Hong Kong, China, has long-term ties with ASEAN and is capable of promoting the use of Renminbi in trade settlements while acting as an arbitration center in the region."

He also mentioned that the upgraded China-ASEAN trade agreement will provide support for small and medium-sized enterprises and is of great significance to the regional economy.

Before the White House announced the suspension, Southeast Asian countries were among the hardest hit by U.S. "reciprocal tariffs." Cambodia, Laos, and Vietnam faced respective tariffs of 49%, 48%, and 46%.

Professor Xin Qiang from the Institute of International Studies at Fudan University in Shanghai stated that the upgraded free trade agreement between China and ASEAN will become a strong chip in negotiations with the United States. "As China and ASEAN strive to strengthen bilateral trade, considering the scale of their economies, it is hoped that Trump can understand the impact of his tariff war on U.S. international trade."

"ASEAN must not fall into the trap of the United States dividing and ruling them and must unite to face Washington," he added. This trade agreement may also help ASEAN become more "united" in negotiations with the United States, as the U.S. will pressure ASEAN to take sides.

Breakthroughs were made in Sino-U.S. economic and trade talks, and a "ceasefire" was announced on May 12th. Prior to this, Trump announced a 145% tariff on Chinese imports, and the "small exemption" policy for Hong Kong and mainland China expired on May 2nd. Chinese ships also became a "thorn in the eye" for the Trump administration, facing high fees.

It is worth noting that various U.S. industries had previously warned that the tariff policies against China would severely damage the U.S. economy and consumer life.

Imports from China to the Port of Los Angeles were halved. Video screenshot.

On May 6th, Gene Seroka, Executive Director of the Port of Los Angeles, stated that that week, the quantity of goods imported from China dropped by more than 50%, with product prices surging about two and a half times compared to the previous month. Yang Yuting, Chief Economist of Greater China at ANZ Bank, stated on the 8th that the number of container ships from China to the U.S. sharply decreased at the end of April.

However, according to reports by the U.S. Consumer News and Business Channel (CNBC), exports from China surged significantly in April, offsetting the sharp decline in exports to the U.S. due to high tariffs. According to customs data, China's goods trade imports and exports grew by 5.6% in April, with exports to ASEAN increasing dramatically by 20.8%.

According to the Ministry of Commerce website, on May 20th, the China-ASEAN Economic and Trade Ministers' Special Meeting was held online, where both sides' economic and trade ministers jointly announced the full completion of the negotiations for the upgrade of the China-ASEAN Free Trade Area to version 3.0.

The negotiations for version 3.0 started in November 2022, lasting nearly two years and completing nine rounds of formal talks, substantially concluding in October 2024. Under the full coordination and joint efforts of the economic and trade ministers of all countries, both sides have fully completed the negotiations, taking another key step toward the goal of signing the upgraded protocol.

According to introductions, version 3.0 will send a strong message to uphold free trade and open cooperation, creating an inclusive, modern, comprehensive, and mutually beneficial free trade agreement. In the face of major challenges in the global economy and trade, the full completion of the negotiations has followed the trend of world development, demonstrating the strong vitality of free trade and open cooperation. It will inject greater certainty into regional and global trade and play a leading role in promoting openness, inclusiveness, and win-win cooperation for all countries.

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7507184382642356746/

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