Huangshan: Stronger grassroots implementation, simplified processes for businesses, and closer public-private partnerships are key to unlocking the full potential of regional trade pacts, according to ASEAN Secretary-General Dr Kao Kim Hourn. Kao was referring to the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN-China Free Trade Area (ACFTA).
According to BERNAMA News Agency, Kao emphasized that the frameworks of both RCEP and ACFTA are complementary and critical in expanding market access, fostering resilient supply chains, and enhancing regional competitiveness. He highlighted the importance of strong public-private partnerships in helping businesses integrate into regional value chains, scale up operations, and contribute to more responsive policymaking. This was discussed at the 2025 RCEP Local Governments and Friendship Cities Cooperation Forum in Huangshan.
Kao also addressed the challenges faced by micro, small, and medium enterprises (MSMEs), which are vital to the ASEAN economy. He noted the barriers they encounter in accessing financing and navigating complex regulations. To support these businesses, Kao encouraged local authorities to offer targeted outreach, advisory services, and simplified administrative processes.
He praised cities and local governments for their proactive efforts in facilitating trade adoption through policy dialogues, capacity building, and incentive schemes. These initiatives are crucial for helping businesses understand technical trade rules and leverage the benefits of both RCEP and ACFTA.
RCEP encompasses 15 countries, including all 10 ASEAN members and five key partners: China, Japan, South Korea, Australia, and New Zealand. Kao pointed out that RCEP economies contributed $29.4 trillion, or nearly 28% of global GDP in 2023, while their combined trade was valued at $13.5 trillion in 2024, representing over 28% of global trade. The bloc also represents a consumer base of 2.3 billion people, or nearly one-third of the global population.
In China, RCEP usage surged by 38% last year, with firms leveraging the partnership to boost exports and diversify supplier networks. ASEAN’s total trade with RCEP partners reached $1.3 trillion in 2024, comprising 34.5% of ASEAN’s overall trade.
Kao also underscored the significance of the ACFTA, established in 2003, which has eliminated over 90% of tariffs between ASEAN and China. The upcoming ACFTA 3.0 is set to modernize the agreement, opening new doors in the digital economy, green economy, and supply chain connectivity. This modernization aims to redefine ASEAN-China economic relations through innovation and competitiveness.
On May 25, ASEAN Economic Ministers concluded negotiations for the ACFTA 3.0 upgrade and the upgraded ASEAN Trade in Goods Agreement (ATIGA). Both agreements are scheduled to be signed at the 47th ASEAN Leaders’ Summit in Kuala Lumpur in October 2025.
Kao concluded by stating that ACFTA and RCEP create ‘mutually reinforcing frameworks’ that enable ASEAN and Chinese businesses to expand their global supply chain footprints. Both agreements contribute to long-term economic resilience and integration, positioning ASEAN and China to build resilient and interconnected economies capable of withstanding uncertainties and challenges while seizing emerging opportunities.