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A Free Trade Area for World's 1/3 Population

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Effendi Taruna, the export manager of an Indonesia-based company, could not wait to find a Chinese import partner before the year 2010.

"Seeking an agent in China," said a poster at the booth of PT. Niramas Utama Food & Beverages Industry at the 6th China-ASEAN Expo held from Oct. 20 to 24 in Nanning, south China's Guangxi Zhuang Autonomous Region.

"It's our first time to join the expo for promotions and seeking partnership. We want to export tariff-free products to China as soon as next year when the Free Trade Area is realized, "Effendi said.

Under a series of agreements between China and ASEAN (Association of Southeast Asian Nations), the China-ASEAN Free Trade Area (CAFTA) is due to be established on January 1, 2010.

It will provide zero tariff on 90 percent of products traded between China and ASEAN and other favorable policies on trade and investment.

"We have to pay 10 percent of the price in tariffs if export products to China now, but next year with zero-tariff treatment, things will be much better," Effendi said.

His company planned to explore markets first in Beijing or Shanghai with products of palm seeds and aloevera, which, unlike coco or jelly, are rare in the Chinese market.

As more and more businessmen from ASEAN are paving the way for entering Chinese market, those from China also start targeting ASEAN markets.

Liang Liqiang, sales supervisor of a Guangxi-based tableware and chinaware export company with a history of almost 20 years, told Xinhua at the expo they would export low and middle-end products to ASEAN countries right after the establishment of CAFTA.

"China-ASEAN partnership looks promising, and CAFTA is a great temptation to us," Liang said, adding that over 90 percent of their products were now exported to the US and European markets.

"Chinaware is special and world-famous, and our company also has a geographic advantage in exporting to Southeast Asian countries. The only problem is logistics, due to underdeveloped transportation in some ASEAN countries," Liang said.

Several officials from ASEAN countries have vowed to improve infrastructure and speed up transportation projects to better serve the China-ASEAN trade cooperation.

China and ASEAN have been deepening mutual economic cooperation over the past few years. The trade volume between the two sides reached US$231 billion in 2008, up 21.6 percent from that in 2004.

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