The ASEAN-China Free Trade Area 3.0 version will further enhance the economic and trade cooperation between ASEAN and China, becoming an important driving force for the continuous development of their economic and trade relations. As a significant economic partner of China for a long time, it is crucial for Indonesia to board the “express train” of the ASEAN-China Free Trade Area 3.0 version in order to enhance its economic resilience and improve its international competitiveness.

       At present, the sharp changes in U.S. foreign policy, the narrowing window for addressing climate change, and the new challenges brought by the rapid development of emerging technologies such as artificial intelligence have all introduced many uncertainties to the world. Against this backdrop, the importance of the ASEAN-China Free Trade Area 3.0 version is further highlighted. ASEAN has remained China’s largest trading partner for five consecutive years. This not only reflects China’s growing influence in the global economic system but also indicates the increasing economic complementarity between ASEAN countries and China

Indonesia’s economic and trade cooperation with China has been growing rapidly over the years, with bilateral trade volume increasing from approximately $13.5 billion in 2004 to nearly $150 billion in 2024. Currently, China is the largest export destination for Indonesia. The position of Indonesia and ASEAN in China’s trade structure is also continuously rising. As the largest economy in ASEAN, Indonesia still has significant potential to further enhance its economic and trade cooperation with China. Focusing on optimizing its export structure, Indonesia should fully leverage the policy benefits of the ASEAN-China Free Trade Area 3.0 version in the next step, creating favorable conditions to attract technology companies from relevant countries and regions to invest in Indonesia and enhance its industrial competitiveness.

       Promoting industrial upgrading and optimizing the export structure is also crucial for Indonesia to effectively address the challenges brought by climate change and technological transformation. Indonesia should strengthen its understanding of the overseas investment trends of Chinese technology and new energy companies, and help small and medium-sized technology and new energy enterprises from both Indonesia and China to better utilize the relevant policies of the free trade area. It should also provide necessary financial support and raw material guarantees to jointly build a green and secure regional supply chain with China.

        For a period of time, the United States' tariff measures have posed common challenges to regional development. Indonesia and China should strengthen cooperation to ensure that the development direction of the ASEAN-China Free Trade Area 3.0 version is in line with the rules established by the Regional Comprehensive Economic Partnership (RCEP). On this basis, they should continuously expand their economic and trade "circle of friends" and enhance their ability to jointly respond to external challenges. The two countries should also accelerate cooperation in the fields of new energy and high technology, further expand their presence in the global market, and fully utilize various exchange platforms to jointly address the challenges of protectionism and build an open, inclusive, and mutually beneficial regional economic framework together.

(Author: Muhammad Zaky, a researcher in the International Relations Department of the Center for Strategic and International Studies, Indonesia)

Source: People's Daily Online