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WORLD> Asia-Pacific
China, ASEAN to have full FTA by 2010
(people.com.cn)
Updated: 2009-08-11 22:19

BEIJING: China-ASEAN (Association of Southeast Asian nations) Free Trade Area will be completely operative in 2010 as scheduled, according to sources from the Fourth Pan Beibu Gulf Economic Cooperation Forum.

By then, more than 90 percent products between China and ASEAN nations would enjoy the zero tariff treatment and the Pan Beibu Gulf rim will become an area of the most vigorous economic and trade cooperation between China and ASEAN.

The Forum, a platform for China's economic cooperation with Southeast Asian nations, was held August 6 to 7 in Nanning city, the capital of south China's Guangxi autonomous region.

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As a new sub-region cooperation scheme under the framework of China-ASEAN (10+1), Pan-Beibu Gulf economic cooperation is expected to attract increasing global attention.

The Pan-Beibu Gulf economic cooperation zone comprises seven countries, namely, China, Vietnam, Malaysia, Singapore, Indonesia, Brunei and the Philippines, and was proposed at the first Forum on Economic Cooperation Beibu Gulf region held in Hanoi, capital of Vietnam in July 2006.

China-ASEAN bilateral trade reached $231.12 billion in 2008, up 13.9 percent despite an impact from the ongoing global financial crisis.

China and the ASEAN became each other's fourth largest trade partners, and China's trade with the Pan Beibu Gulf countries amounted to $226.96 billion, accounting for 98.2 percent of the total trade volume between China and ASEAN.

The first half of 2009 was the toughest time for the whole world due to dwindling demands from overseas markets.

Nevertheless, Ma Biao, the chairman of the Guangxi Zhuang Autonomous Region, said in his speech at the forum that the Guangxi's cross-border trade with Vietnam and other neighborings Southeast Asian countries rose 8.7 percent in the first half of the year.

In April, Chinese Premier Wen Jiabao announced China will set up a $10 billion "China-ASEAN Fund on Investment Cooperation" to support infrastructure development in the region.

Over the next three to five years, China planned to offer credit of $15 billion to ASEAN countries, including loans with preferential terms of $1.7 billion in aid for cooperative projects.

China also considers providing a total of 270 million yuan this year in special aid to the less developed ASEAN countries, including Cambodia, Laos and Myanmar, to help them meet pressing needs and get through the most difficult time.

Moreover, China has proposed speeding up the multi-lateralization process of the Chiang Mai initiative and called for a common foreign reserve pool.

Meanwhile, ASEAN finance chiefs in late February agreed to increase joint currency pool to $120 billion from $80 billion, to expand their system of bilateral currency swaps under the Chiang Mai Initiative to a more multilateral system, and to accelerate the development of the Asian bond market.

At present, China's State Development Bank (SDB), Industrial and Commerce Bank (ICBC) and Construction Bank (CCB) have all speeded up preparations to set up their subsidiary institutions in ASEAN countries, whereas the Singapore-based DBS Group and the Ho Chi Min City-based Sai Gon Thuong Tin Currency Joint Stock Bank have already set up their representative offices in the city of Nanning.

The "soft" environment for the Pan Beibu Gulf economic area has continued to improve and its "hard" environment, however, is still lacking, as indicated by trade and investment deals signed by various countries.

In the Guangxi autonomous region, major breakthroughs have been made with regard to the construction of the Guilin-Beihai Expressway and Nanning-Guangzhou expressway, and the renovation of such leading ports at Fangcheng, Beihai and Qinzhou is now well under way.

By the end of this year, ports across Guangxi will have a handling capacity of more than 100 million tons of cargo and approximately 1.4 million 20-foot container units (TEUS).

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