China and the Association of Southeast Asian Nations (ASEAN) on Tuesday signed an upgraded version of their free trade agreement, expanding cooperation into digital trade, the green economy and emerging industries, according to Beijing’s Commerce Ministry.

The accord, described as the “3.0 version” of the ASEAN-China Free Trade Area, was signed during a summit of ASEAN leaders in Malaysia, attended by US President Donald Trump.

The new pact builds on the original agreement, which came into force in 2010, and follows negotiations launched in November 2022 that concluded in May this year.

China’s Commerce Ministry said the upgraded deal “fully reflects the solemn commitment of the two sides to support multilateralism and free trade jointly.” The move comes as Beijing seeks closer economic alignment with Southeast Asia amid escalating global trade tensions and high tariffs imposed by Washington.

ASEAN, comprising 11 member states, is China’s largest trading partner. Bilateral trade reached $771 billion in 2024, according to ASEAN figures. The bloc, with a collective GDP of $3.8 trillion, is one of the world’s fastest-growing regional markets.

The enhanced agreement aims to boost market access in areas such as agriculture, digital services and pharmaceuticals, while supporting investment in environmentally sustainable industries.

Both China and ASEAN are also members of the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade bloc, which accounts for nearly a third of global GDP.