Does the deepening of trade agreements promote bilateral value chain cooperation between China and ASEAN countries?

This study examines the impact of deepening Free Trade Agreements (FTAs) on bilateral value chain cooperation between China and ASEAN. The results show that deeper FTA provisions promote cooperation by stimulating bilateral foreign direct investment, improving institutional quality, and deepening vertical specialization. Our analysis reveals that “WTO+” provisions significantly enhance value chain cooperation in labor-intensive and capital-intensive manufacturing sectors, while “WTO-X” provisions most notably affect capital-intensive industries, followed by technology-intensive industries, with a weaker effect on labor-intensive sectors. Additionally, the complementary industrial structure between China and ASEAN, along with the gradual evolution of FTAs, strengthens the promoting effect of FTA deepening on bilateral value chain cooperation. These findings offer valuable insights for policymakers aiming to foster stronger bilateral cooperation between China and ASEAN countries.