China and the Association of Southeast Asian Nations are forging closer industrial and supply chain ties, with the upgraded free trade framework opening more room for investment, digital trade and green industries, said Pov Somnang, special assistant to the secretary-general of ASEAN.
Pov said more commercial opportunities will emerge as the China-ASEAN Free Trade Area 3.0 Upgrade Protocol, or CAFTA 3.0, facilitates closer coordination in supply chains, technology and trade rules and expands cooperation in emerging areas.
Following the signing of CAFTA 3.0 in Kuala Lumpur, Malaysia, in October 2025, China is working with ASEAN member states to bring the upgraded protocol into force at an early date, the Ministry of Commerce recently said.
"The relationship needs to move beyond simple buying and selling toward joint investment, research and operations. The focus is shifting from scale expansion toward innovation-driven growth across the region," said Pov.
Growing trade flows also underscore the strength of economic ties. China-ASEAN two-way trade reached 5.95 trillion yuan ($887.5 billion) in the first eight months, up 20.6 percent year-on-year, data from China's General Administration of Customs showed.
Closer alignment in customs procedures, standards and trade rules under CAFTA 3.0 can reduce transactional and logistical costs, and help smaller businesses participate more comprehensively in regional supply chains, said Pov, adding that digital and green industries are also emerging as new growth engines for China-ASEAN economic cooperation.
China's capabilities in artificial intelligence, 5G, photovoltaic equipment and new-energy vehicles can be combined with ASEAN's demand for smart cities, agricultural digitalization and clean energy, creating opportunities for the two sides to move from technology transfers toward joint research, investment and product development, he added.
Green cooperation is also expanding from equipment trade to investment and infrastructure. A 1,000-megawatt PV project developed by State-owned China General Nuclear Power Corp began operations in April in Laos.
Located in Oudomxay province, the solar farm is expected to generate 1.65 billion kilowatt-hours of electricity annually.
Pov said further gains will depend on whether China and ASEAN can deepen cooperation in both rule-setting and industrial development. The two sides could explore closer coordination in areas such as e-commerce, cross-border data flows, mutual recognition of carbon footprints and green finance, alongside more joint investment and research projects.
For manufacturers, closer regional supply chain ties are already translating into greater cross-border sourcing. Ningbo Asia Pulp and Paper Co in Ningbo, Zhejiang province, imported 303 million yuan worth of wood chips from Vietnam and other ASEAN countries between January and August, up 20.12 percent year-on-year, according to Ningbo Customs.
"The wood chips sourced from these countries offer reliable quality and stable supplies and fit well with our green, circular production model," said Chen Xilin, the company's customs affairs manager.
Chen said the company has steadily increased wood chip imports from Vietnam, using the raw material to produce higher-value products such as food-grade coated paperboard and aseptic packaging paper for both domestic and overseas markets.
AGG Power Technology (Fuzhou) Co Ltd, a power equipment manufacturer based in Fujian province, saw its exports to ASEAN markets rise 12.9 percent year-on-year to 202 million yuan in the January-August period, statistics from Fuzhou Customs showed.
"As AI computing infrastructure develops rapidly across Southeast Asia this year, the construction of high-density AI data centers in the region is driving a surge in demand for diesel and natural gas generator sets," said Chen Ran, the company's sales director. - China Daily/ANN
