ACFTA 3.0 upgrade creates more opportunities for China-Cambodia economic and trade cooperation

Zhong Jie is Minister Counsellor of Economic and Commercial Affairs of the Embassy of China in Cambodia. Supplied

On October 28, witnessed by Chinese Premier Li Qiang and Malaysian Prime Minister Anwar Ibrahim, along with other ASEAN leaders, Chinese Commerce Minister Wang Wentao and Malaysian Investment, Trade and Industry Minister Tengku Zafrul Aziz, representing China and ASEAN, respectively, signed the ASEAN-China Free Trade Area (ACFTA) 3.0 Upgrade Protocol in Kuala Lumpur.

The upgrade protocol covers nine key fields, including not only the existing areas such as customs procedures and trade facilitation, standards and technical regulations and conformity assessment procedures, sanitary and phytosanitary measures, and economic and technical cooperation, but also new, high-potential fields such as digital economy, green economy, supply chain connectivity, competition and consumer protection, and small- and medium-sized enterprises.

Profound, far-reaching significance
The signing of the protocol is a landmark event in the history of China-ASEAN relations, marking a new stage of high-quality and high-standard development for one of the world’s largest free trade areas. Its profound significance is mainly reflected in the following aspects:

First, it creates a new pattern of regional economic integration. Compared to previous versions, the protocol moves beyond traditional tariff reductions, proactively focusing on cutting-edge areas such as the digital economy, green economy, and supply chain connectivity. By establishing higher-level rules and standards, it significantly expands the breadth and depth of cooperation, creating a more resilient, modern, and sustainable regional common market, injecting strong and lasting new momentum into regional economic growth in the post-pandemic era.

Second, it consolidates and enhances the China-ASEAN strategic partnership. This move not only deepens the interdependent economic relationship between the two sides but also demonstrates, against a backdrop of increasing geopolitical uncertainty and rising global protectionism, a shared and firm commitment to multilateralism and free trade. It shows the determination and wisdom of regional countries to overcome external interference and jointly take control of their own development, making the “ballast” of China-ASEAN relations more solid.

Third, it brings tangible benefits to the people and enterprises of both sides. The signing of the protocol will further reduce non-tariff barriers, optimise the business environment, and greatly promote the prosperity of emerging industries such as cross-border e-commerce, digital payments, and green technologies. This will create unprecedented market access and investment opportunities for SMEs and investors, while also providing consumers with higher-quality, and more diversified and convenient goods and services, effectively enhancing their sense of gain and allowing them to share the fruits of regional prosperity and development.

Lastly, it sets a new benchmark for regional and global economic development. As a model of cooperation among Global South countries, China and ASEAN, through the negotiations for the Version 3.0 upgrade, jointly explored and formulated future-oriented trade and investment rules. This successful practice not only provides a replicable model for deepening cooperation in the Global South, but also contributes important “Asian solutions” and “Eastern wisdom” to promoting the construction of an open, inclusive, and universally beneficial global economic system amid a wave of anti-globalisation.

More opportunities for China-Cambodia economic and trade cooperation
The signing of the protocol injects new impetus into the China-Cambodia Diamond Hexagon cooperation framework, which is currently in a stage of high-quality development, and will create systemic opportunities for bilateral economic and trade cooperation in several cutting-edge fields.

First, in the field of digital economy, the potential for cooperation will be released unprecedentedly. The Cambodian government views the digital economy as a new engine for economic growth.

The protocol’s common rules and facilitation measures in digital trade, paperless customs clearance, and e-commerce will create a fast track for Cambodia’s high-quality agricultural products, such as bananas and mangoes, to efficiently enter the Chinese market through live-streaming e-commerce and cross-border platforms. Simultaneously, this provides a solid institutional guarantee and a broad market for leading Chinese digital payment systems, cloud computing services, and smart city solution companies to invest in Cambodia and participate in its digital infrastructure construction and industrial digital transformation.

Second, the green economy has become a golden track for mutual benefit. The protocol’s focus on green and sustainable development aligns perfectly with Cambodia’s urgent need for renewable energy and environmental protection technologies. This will significantly inspire and facilitate more Chinese companies to invest in Cambodia’s clean energy projects, such as photovoltaics and hydropower, contributing to the optimisation of its energy structure. In addition, China’s electric vehicle and new energy vehicle industry chains, as well as energy-saving and environmental protection equipment, will accelerate their entry into the Cambodian market thanks to a more optimised trade environment, helping Cambodia transform its ecological resource advantages into tangible green competitiveness.

Furthermore, supply chain collaboration will drive Cambodia’s industrial upgrading. The Protocol strengthens supply chain resilience and connectivity, providing an institutional blueprint for China and Cambodia to optimise the division of labour in the regional industrial chain. Cambodia is expected to leverage its advantages, such as lower labour costs, to extend its reach from a traditional exporter of agricultural products and textiles to higher value-added manufacturing sectors like electronic components and light industrial assembly, thus more closely integrating into the China-driven regional production network and achieving a crucial leap from a “raw material supplier” to a “modern manufacturing partner.”

Ultimately, these opportunities will converge into a powerful driving force for building a China-Cambodia community with a shared future in the new era. Through deep integration in these emerging fields, China-Cambodia economic and trade relations will transcend traditional trade complementarity and move towards a new stage of rules-based coordination and innovative symbiosis. China looks forward to working with ASEAN countries, including Cambodia, to expedite the completion of the protocol’s domestic approval procedures and jointly promote its early implementation, so that it can benefit enterprises and people of both sides as soon as possible.

The author is Minister Counsellor (Economic and Commercial Affairs) of the Embassy of China in Cambodia.

-Khmer Times-