The 11-member Association of Southeast Asian Nations is China's largest trading partner, with bilateral trade totalling $US771 billion ($A1.2 trillion) in 2024, according to ASEAN statistics.
China is seeking to intensify its engagement with ASEAN, a region with a collective gross domestic product of $US3.8 trillion, to counter hefty import tariffs imposed by US President Donald Trump's administration on countries around the world.
The upgraded agreement "fully reflects the solemn commitment of the two sides to jointly support multilateralism and free trade", China's commerce ministry said in a statement.
Beijing has been seeking to position itself as a more open economy, despite criticism from other major powers of its expanding export restrictions on rare earths and other critical minerals.
The so-called 3.0 version of the free trade agreement between ASEAN and China was signed into effect at a summit of the bloc's leaders in Malaysia, which Trump attended on Sunday at the start of a trip through Asia.
Negotiations on the upgraded ASEAN-China deal began in November 2022 and concluded in May, just after Trump's tariff offensive kicked into gear.
The first FTA came into force in 2010.
China has previously said the agreement would pave the way for improved market access in sectors such as agriculture, the digital economy and pharmaceuticals between China and ASEAN.
Both China and ASEAN are part of the Regional Comprehensive Economic Partnership, the world's largest trading bloc, which covers nearly a third of the global population and about 30 per cent of global gross domestic product.
Malaysia hosted an RCEP summit in Kuala Lumpur on Monday, the first in five years.
China has been engaged in an escalating trade war with the United States since Trump took office in January and imposed steep tariffs on Chinese goods.
Beijing has labelled Trump's tariffs, which have hit most countries, as protectionism, while expanding its controls over the flow of its critical minerals and magnets.
China processes more than 90 per cent of the world's rare earths.
The world's two largest economies extended a trade truce when negotiators met in Kuala Lumpur at the weekend, hashing out an agreement for Trump and Chinese President Xi Jinping to decide later this week when they meet in Seoul.
Since Trump departed Malaysia on Monday morning, China has pressed for increased economic co-operation in the region, stressing the importance of open trade.
"The world must not slip back to the law of the jungle where the strong prey on the weak," Chinese Premier Li Qiang said on Monday at the East Asia Summit regional forum.
"We should more firmly uphold the free trade regime, create a high-standard regional free trade network, and vigorously and effectively advance regional integration."
