Industries in China and Southeast Asia need to establish closer
relations in order to benefit consumers and companies in their
envisaged free trade area, a top trade official said yesterday.
Xu Ningning, deputy secretary-general of the China-ASEAN
(Association of Southeast Asian Nations) Business Council, said
China-ASEAN trade has developed dramatically as a result of tariff
reduction policies launched last year.
According to customs statistics, the trade volume between China
and ASEAN countries topped US$116.3 billion in the first nine
months of this year, up 23.1 percent year-on-year.
Xu said that the China-ASEAN Free Trade Area (FTA), which is due
to be fully established in 2010, "will increase the overall
competitiveness of this area."
The FTA will be the world's largest free trade area. "That will
attract enterprises from China and other countries to invest in
ASEAN," said Xu.
He urged businesses in the two regions to strengthen their ties
in order to take full advantage of the FTA.
"Through further opening up, businesses in South Asia can
transform their industrial structure," said Xu. "This will further
cut production costs in this region and form globally competitive
industry chains."
He said that businesses in the two regions should work together
to overcome problems in international trade. "For instance,
shoemakers' associations in the two regions should join forces to
deal with unfair competition in the global footwear market," he
suggested. Many firms also need to improve their understanding of
free trade in order to ensure that they fully benefit from it,
stressed Xu.
"Many enterprises still do not understand what the China-ASEAN
FTA means, and have yet to take full advantage of it."
For instance, many Chinese companies fail to complete
"certificates of origin," introduced as a result of the Early
Harvest Program agreed between China and ASEAN in early 2005. This
means that they are unable to take advantage of tax exemptions and
reduced costs.
Xu also called for improved links between the two sides'
industry associations. For instance, electronic products are the
main items traded between China and ASEAN, but Western
multinationals take over 61 percent of the total trade value.
"That has brought risks to the trade between the two sides," he
said. "If the world electronic industry does not perform well, that
will directly influence China-ASEAN trade."
But the situation is already starting to improve, said Xu. Many
Chinese industry associations, such as the China Association of
Agricultural Machinery Manufacturers, have held forums with their
ASEAN counterparts in order to strengthen ties.
"Cooperation between China and ASEAN is like a marriage. China
and ASEAN first chose each other, and then we took steps to deepen
the relationship," said Xu.
Mutual investment between China and ASEAN has risen dramatically
in recent years. By March 2006, investment from ASEAN in China
totaled US$40 billion, while growing numbers of Chinese firms are
planning to invest in ASEAN member states.
ASEAN is the Chinese mainland's fifth-largest overseas trading
partner after the European Union, the United States, Japan and Hong
Kong.
China is now the third-largest trading partner of Singapore,
Thailand and the Philippines, the second-largest of Myanmar and the
top trading partner of Viet Nam.
China and ASEAN will deepen co-operation in 10 areas including
agriculture, telecommunications, human resource development, mutual
investment, tourism, energy resources and transportation,
Vice-Minister of Commerce Gao Hucheng said earlier.
(China Daily November 2, 2006)