KUALA LUMPUR, Nov. 22 -- The ASEAN-China Free Trade Area (ACFTA) is a free trade area between the 10 Association of Southeast Asian Nations member states and China.

The initial framework agreement, signed on Nov. 4, 2002 in Phnom Penh, Cambodia, was designed to establish a free trade area among the 11 nations by 2010. The free trade area came into effect on Jan. 1, 2010.

The ACFTA is the largest free trade area in the world in terms of population and third largest in terms of nominal GDP, trailing the European Economic Area and North American Free Trade Area.

Under the free trade agreement, tariffs will be reduced to zero on 7,881 product categories, or 90 percent of imported goods. This reduction already took effect in China and the six original members of ASEAN: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The remaining four countries will follow suit in 2015.

The average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 percent to 0.6 percent starting Jan. 1, 2010. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 percent to 0.1 percent.

Chinese Premier Li Keqiang in 2013 called for an "upgraded version" of the ACFTA, pledging economic and trade cooperation of "a greater scope and higher quality."

The decision by leaders of China and ASEAN member states to negotiate for an upgraded version of the FTA is made to meet the demand for restructuring and upgrading their respective economies and is also a new move to further enhance the China-ASEAN strategic cooperative relationship.

The ACFTA has played a leading role in the overall economic integration in East Asia and also made great contribution to the liberalization of global trade.

Progress has been made in comprehensive and in-depth consultation on goods and services trade, investment and economic and technological cooperation since the first round began in Hanoi, Vietnam in September 2013.

China-ASEAN economic cooperation has never been more dynamic and fruitful, as China has become ASEAN's largest trading partner and ASEAN has emerged as China's third biggest trading partner with bilateral trade growing by more than 20 percent annually on average and surging by 37 times over the past two decades.

At the 18th ASEAN-China, Japan and South Korea (10+3) leaders' meeting here, Premier Li said China's talks with ASEAN on the upgrading of ACFTA will end soon.

The two sides are targeting their bilateral trade at 500 billion U.S. dollars by 2015 and 1 trillion dollars by 2020.