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Global Financial Turmoil Highlights Importance of China-ASEAN Free Trade Area

With the grave challenge on export as a result of the global financial crisis, the China-ASEAN (Association of Southeast Asian Nations) Free Trade Area (FTA) would facilitate trade liberalization in this region, Chinese economist Tang Min said.

The 1997 Asian financial crisis made Asian countries come to realize the importance of cooperation, Tang, deputy secretary-general of the China Development Research Foundation, said on the sidelines of the ongoing 5th China-ASEAN Expo.

Asian countries were aware that their too much dependence on the markets and investment from Europe and the United States was one of the causes triggering that crisis. "They could enhance their immunity from further crisis by stepping up regional cooperation," Tang added.

The China-ASEAN FTA is the first free trade area agreement signed by China. In November 2004, the two sides concluded the FTA agreement on trade. In January 2007, the FTA agreement on trade in services was also signed.

The two sides vowed to complete the China-ASEAN FTA before 2010.

Zhao Jinping, deputy director of the State Council's Development Research Center, said China's stable economic development could help "cushion the current global financial crisis impacts on ASEAN countries and maintain the stability of their economies."

Zhao said China-ASEAN FTA could lower bilateral trade costs and increase combined trade volume. China still had great untapped economic potentials and the two sides had an optimistic forecast of trade and economic cooperation, he added.

Trade volume between China and ASEAN increased from US$105.9 billion in 2004 to US$202.5 billion in 2007, attaining the trade target of US$200 billion set by leaders of the two sides three years ahead of schedule.

During the first nine months of this year, trade volume between China and ASEAN reached US$180.4 billion, up 23 percent year on year and making them each other's fourth largest trading partner, official figures show.

Chinese Vice Premier Wang Qishan said on Wednesday while addressing the 5th China-ASEAN Business and Investment Summit that in face of unprecedented challenges to the world economy, it was of special importance to accelerate China-ASEAN cooperation.

"The two sides need to further deepen cooperation in trade in goods and services, continue to strengthen communication and consultation on the Investment Agreement of China-ASEAN FTA, work to conclude negotiations and sign the agreement at an early date and ensure that China-ASEAN FTA will be established as scheduled," Wang added.

Li Kang, vice chairman of Guangxi Zhuang Autonomous Region government, said the spread of the financial turmoil would to some extent stir investors to be more cautious, however, the crisis often comes in sync with opportunities.

She believed Guangxi could play an active role in the progress of the China-ASEAN FTA construction.

Emmanuel Ole Naiko, vice president of World Association of Investment Promotion Agencies, told Xinhua that even against the global financial jitters, investors still cared most about the localities of investment.

"When the localities are good, the investment would come out to be good," he said, adding that Guangxi and the whole China-ASEAN FTA had optimistic investment and trade forecast.

The 5th China-ASEAN Expo and 5th China-ASEAN Business and Investment Summit started on Wednesday in Nanning, capital city of Guangxi in south China, with participants voicing views and proposing measures to further cooperation in this region and better cope with the financial crisis.

(Xinhua News Agency October 26, 2008)

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