China, ASEAN vow to expand links

Beijing(China)—Trade and economic cooperation have become top priority between China and the ten-member ASEAN these days as leaders from China and ASEAN countries gathered for a number of events.
They signed a joint statement to cement their strategic partnership. On Tuesday, Chinese Premier Wen Jiabao and ASEAN rotating president — Philippine President Gloria Macapagal Arroyo vowed to bring closer the neighbors economically. “China and ASEAN countries are close neighbors...the two sides are complementary in resources, industrial structure and trade, and both are experiencing rapid development,” said Chinese Premier Wen Jiabao at the opening ceremony of a business and investment summit. “We must seize this rare opportunity to broaden, enrich and upgrade our cooperation.”
The joint statement, inked by Wen and his ASEAN colleagues, was to reaffirm the determination of the 11 countries to enhance not only political trust, but also the building of the China-ASEAN Free Trade Area (FTA) by 2010, a giant trade zone incorporating 1. 8 billion, or one third of the world’s population. According to a framework agreement signed by the two sides, about 7,000 kinds goods would move free of tariffs by 2010 between China and six old ASEAN members — Singapore, the Philippines, Brunei, Malaysia, Indonesia and Thailand — and by 2015 for the rest of the ASEAN members.
“One of the most dynamic components ... is the ASEAN-China Free Trade Area,” said President Arroyo. “The ASEAN region represents a market of over half a billion people for Chinese exports. In turn, we the ASEAN countries can reduce our dependence on Western markets such as the US and Europe.” Ambition of the trading bloc is fueled by snowballing bilateral trade volume over the past decade. According to statistics by the Chinese Customs, from 1990 to 2005, China-ASEAN trade volume surged at an average of 22 percent year-on-year.
China-ASEAN trade hit 130.3 billion U.S. dollars last year, 23 percent up from 2004 and roughly 16 times of the figure in 1991. In the first three quarters this year, bilateral trade between China and ASEAN countries topped 116.3 billion U.S. dollars. China and ASEAN are now the 4th biggest trading partner of each other. ASEAN is China’s 4th biggest export market and 3rd biggest source of import. China’s Minister of Commerce Bo Xilai said Tuesday that trade volume between China and ASEAN will rise 20 percent from last year.
China slashed tariffs on 7,000 goods from ASEAN in 2005. Today, tropical fruits like durian, mangosteen and ramboostan from Southeast Asia are popular with Chinese consumers. China’s temperate zones fruits like apples, pears and oranges are now easily affordable to ASEAN consumers. China and ASEAN have concluded agreements on trade in goods and dispute settlement mechanism and launched negotiation on trade in services and investment.
The ever-stronger momentum leads people to believe that the goal of achieving a 200-billion-U.S. dollar annual bilateral trade volume could be realized in 2008, two years ahead of schedule. Trade analysts said the growth is partially prodded by structural optimization of traded products in the region.
“The merchandise between China and ASEAN are changing from raw products to finished industrial products, in particular, mechanical, electrical or high-tech products”, said Chai Yu, director of the economics office of the Asia-Pacific Institute under the Chinese Academy of Social Sciences. On Tuesday, Wen made a five-point proposal on boost China-ASEAN cooperation. The first one is to expand trade.
“Both sides should work for a more enabling trading environment to facilitate trade,” Wen said. “China has a trade deficit with ASEAN. But we are still committed to further opening market and increasing import from ASEAN.” Another important area of cooperation is investment. Two-way investment has expanded. By the end of June 2006, ASEAN had made a total net investment of 40 billion US dollars in China. Chinese investment in ASEAN has also been growing strongly to 158 million U.S. dollars by 2005.
On Tuesday, Wen said in his five-point proposal that the two sides should deepen cooperation in investment. “Both sides should provide better investment promotion services to accelerate investment facilitation,” he said.
The premier said China will honor its pledge made last year of providing five billion US dollars of preferential loans to support Chinese companies in investing and setting up business ventures in ASEAN countries. “We encourage them to join in the development in ASEAN countries of trade and economic cooperation zones that have sound infrastructure and production chains linking different sectors and will spur local development,” he said.
The ASEAN welcomed China’s increasing investment but demanding more. “We are starting to see more Chinese investment into the ASEAN countries and we hope to see more,” Philippine President Gloria Macapagal Arroyo said.

—The Daily Mail-China Daily news exchange item