China-ASEAN FTA 3.0: A Technological Leap Forward for Regional Trade

The China-ASEAN Free Trade Area (CAFTA) 3.0, finalized in May 2025, represents a significant technological advancement in international trade, promising to reshape the economic landscape of Southeast Asia and China. This upgraded agreement introduces nine new chapters, including a focus on the digital economy and supply chain connectivity. This technological focus is crucial for bridging the digital divide that remains a major obstacle to economic integration between China and ASEAN countries. The CAFTA 3.0 is set to become an inclusive, modern, and comprehensive free trade agreement, with the goal of formally signing the upgrade protocol before the end of 2025. This agreement is expected to provide important institutional guarantees for building a China-ASEAN mega-market. Furthermore, in the first quarter of 2025, China's imports to ASEAN via rail transport grew by 37 percent year-on-year, highlighting the importance of technological advancements in logistics and trade facilitation. This technological integration will likely accelerate trade and economic cooperation between the two regions.