ASEAN
Update on China and ASEAN
China joins hands with ASEAN
Source: http://www.chinaknowledge.com/Newswires/CA.aspx?id=217
by Charles Chaw, Tony Wang
For a long time, China relied on the EU and the U.S. as its major trading partners. In 2009, the trade value between China and these two giants accounted for 16.5% and 13.5% of Chinaโs total foreign trade, respectively. However, the global financial crisis, which broke out in 2008, caused demand from the EU and the U.S. to stagnate and shocked Chinaโs export-oriented economy.
China, seeking other markets for its goods, turned to the Association of Southeast Asian Nations. In 2008, ASEANโs GDP exceeded US$1.5 trillion, and the association became one of the world's major economic powers. Its foreign trade with China increased from less than US$8.0 billion in 1991 to US$2.1 trillion in 2009, accounting for 9.7% of Chinaโs total import and export value. ASEAN is now Chinaโs fourth-largest trading partner after the EU, the U.S. and Japan, while China is ASEANโs third-largest trading partner.
Besides, China is a hot destination for investors from ASEAN member nations, especially Singapore. In the first ten months of 2009, Singaporeโs direct investment in China reached US$3.0 billion, accounting for 12.7% of Chinaโs total investment from foreign countries (not including Hong Kong and Taiwan), only after Japan.
ASEAN is also one of the hottest destinations for Chinaโs overseas investment (not including Hong Kong and Taiwan). In 2008, Chinaโs direct investment in ASEAN countries accounted for 11.4% of its total overseas investment, a proportion higher than that of the EU, the U.S. or Japan.
In a move to promote mutually beneficial cooperation, the China-ASEAN Free Trade Area (CAFTA) was launched at the beginning of 2010.
Preparations for CAFTA began in the 1990s, when the countries in Southeast Asia were badly hit by the Asian Financial Crisis. In 1999, Chinaโs then Premier Zhu Rongji expressed the idea of strengthening Chinaโs economic ties with these countries. ASEAN nations agreed.
Ten years later, now that CAFTA is finally set up, huge potential market benefits are expected. The region contains nearly 2 billion people, has a GDP of over US$6 trillion and generates about US$4.5 trillion of trade value. It is the most populous free trade area in the world.
Figure 1: Growth of foreign trade between China and its major trade partners (2008-2009)
Source: General Administration of Customs
Trade between China and ASEAN surged rapidly in the fourth quarter of 2009, much faster than trade with the U.S., the EU and Japan. After CAFTA was set up, over 7,000 types of goods, accounting for 90% of the trade list, were designated tax-exempt. It will surely further improve the trade conditions between the two sides; in 2004, when some agricultural products were designated tax-exempt, the trade value of such products grew by over 40%.
However, along with huge market potential come problems. ASEAN and China, where labor-intensive industries dominate, are the most important manufacturing bases in the world. The similarity in industrial structures results in export goods of the same category.
ASEANโs top export product is electric machinery, and so is Chinaโs. In 2008, ASEANโs exports of such products hit US$175.5 billion, accounting for 23.4% of its total exports. The same year, Chinaโs exports of electric machinery hit US$342.1 billion, accounting for 23.9% of its total exports. Exports of nuclear reactors, boilers, machinery and mechanical appliances, are all major export products of both ASEAN and China.
Therefore, the trade relationship between China and ASEAN is mostly competitive, not complementary. This is true because low costs and abundant labor are the main advantages for both sides. One month before the launching of CAFTA, Indonesiaโs 14 industrial associations expressed concern over the zero-tariff, which may damage Indonesiaโs own industries, in the hopes of delaying the agreement.
Despite such efforts, CAFTA was finally launched. Rather than intensifying competition among the nations, CAFTA brought about opportunities to make the best use of the manufacturing facilities in the region. Take steel products as an example. ASEAN has much higher steel production costs than China, and lacks sufficient steel output capacity. In contrast, China has excess steel capacity.
In the first 11 months of 2009, Chinaโs Guangdong Province saw its steel exports to ASEAN reach 418,000 tons, accounting for one-third of its total steel exports. Chinaโs Yunnan Province released a plan to make steel a key export to ASEAN. In December 2009, Indonesiaโs TPT held a meeting with Chinaโs Wuhan Iron and Steel, hoping to increase its imports of steel from China.
In addition to steel, there are other products, such as organic chemicals and fossil fuels. In a word, CAFTA will be more beneficial than harmful. Together with Japan and South Korea, a large free trade region is forming in East Asia. Learning how to grasp the opportunity will be a crucial task for each player.
Charles Chaw is the Managing Director of China Knowledge Consulting based in Hong Kong, and Tony Wang is a research analyst with the firm in Chengdu, Sichuan. The firm provides corporate, financial advisory and market strategy to foreign businesses seeking opportunities in China. The opinions expressed are their ownASEAN exports to China boosted by China-ASEAN FTA
Source: http://english.people.com.cn/90001/90778/90861/6902396.html
By People's Daily Online
China-ASEAN Free Trade Area (FTA) boosted bilateral economic and trade relations significantly after its establishment, and China's imports from ASEAN sharply increased, said Yao Jian, spokesman from China's Ministry of Commerce today.
In January, bilateral trade volume amounted to 21.48 billion U.S. dollars, up 80 percent year-on-year. Among which, China exported 10.55 billion U.S. dollars to ASEAN, an increase of 52.8 percent, and its imports from ASEAN reached 10.93 billion U.S. dollars, surging by 117.3 percent, both higher than the same period of the overall level of China's foreign trade.
The trade situation in January fully demonstrates that the China-ASEAN FTA is a win-win institutional arrangement, China's imports from ASEAN countries have grown dramatically, particularly from Indonesia, Malaysia, Thailand, the Philippines and Singapore, increasing by 153.4 percent, 140.54 percent, 114.2 percent, 92.7 percent and 75.6 percent year-on-year respectively. Chinaโs growth rate of imports from these countries is over 2 times more than Chinaโs exports to them.
Since the implementation of early harvest agreement, the FTA has promoted bilateral trade and economic development strongly. Trade volume surged rapidly from 78.2 billion U.S. dollars in 2003 to 213 billion U.S. dollars in 2009 with an average annual increase of 18.2 percent. Reciprocal investment has also continued to expand. Investment from China to ASEAN increased from 230 million U.S. dollars in 2003 to 2.3 billion U.S. dollars in 2009, up by 10 times. Despite the impact of the international financial crisis, China's investment to ASEAN did not fall, it rose in 2009.
Yao also said, "China - ASEAN FTA will bring long-term and great interests for both parties through joint efforts.โ
China: Guangxi sees growing fruit imports from ASEAN countries
Source:http://www.freshplaza.com/news_detail.asp?id=59568
A total of 60,000 tons of fruit were imported from the ASEAN countries in January via the customs of Guangxi Zhuang Autonomous Region, accounting for 31.1% of China's total fruit imports from the region, according to statistics from the local customs authority.
The figure represents a 50.9% surge from the same month of last year. The import value grew 28.3% year on year to US$26.32 billion.
Ninety-nine point nine percent of the fruit imports are from Vietnam, and the fruit importers are mostly privately owned trading firms, said the customs.
Beijing has overtaken Guangdong as the top import destination for ASEAN fruit, with 23,000 tons being sold to Beijing in the month, 5.5 times more than that was sold in last January.
ASEAN Sees Little Optimism on Doha Round Accord, Mustapa Says
By Daniel Ten Kate and Barry Porter
Feb. 27 (Bloomberg) -- Southeast Asian governments will discuss ways to restart the latest round of global trade talks this weekend as optimism for completing an accord appears to have faded
World Trade Organization negotiations on a new accord have been dogged by clashes between rich and poor economies since talks began in Doha, Qatar in 2001. The Group of 20 industrial and emerging nations and WTO Director-General Pascal Lamy want to complete an accord this year.
โWe were quite bullish and optimisticโ at the end of last year that the Doha round would progress, said Malaysian International Trade and Industry Minister Mustapa Mohamed, who is hosting a retreat this weekend in Putrajaya, near Kuala Lumpur, for ministers from the 10-member Association of Southeast Asian Nations. โThere is no ground for optimism.โ
Asiaโs export-dependent economies are emerging from recession as global demand increases for the regionโs computer chips, cars and commodities. Asean members have sought to boost growth by signing trade deals and agreements to form an integrated economic community modeled on the European Union, without a common currency, by 2015.
A โstock-taking meetingโ on the WTOโs Doha round scheduled for late March โmight not happen,โ Mustapa said. โThis is an opportunity for us to share with each other the interactions weโve been having in the past few months on Doha.โ
Free Trade
Editors: Jim McDonald, Mike Millard
Six of Aseanโs 10 members formed a free-trade area on Jan. 1, eliminating tariffs between their countries on more than 87 percent of imports. Other members, which are less developed, will follow later.
Southeast Asia wants to be seen by investors as a single entity with a combined potential market of 584 million people. To-date, wide economic disparity among Asean members has hindered the regionโs ability to leverage its market and compete for investments with China and India, the worldโs fastest- growing economies.
The ministers this weekend will informally discuss integration efforts, including minimizing customs procedures. The meeting is expected to address issues related to Aseanโs free-trade agreements with the likes of Australia and New Zealand and their impact on domestic industries, including fears of increased competition.
China Flood
Several Asean countries, particularly Indonesia and Malaysia, have received private-sector complaints about a potential influx of cheap goods resulting from the Asean-China free-trade deal, Mustapa said. Chinaโs agreement with Southeast Asia came into effect on Jan. 1, scrapping tariffs on 90 percent of goods.
Ministers are also expected to discuss the direction of Asean beyond 2015. Their discussions come ahead of a summit of Asean leaders in Vietnam in April.
As well as Malaysia and Indonesia, Asean members include Brunei, Cambodia, Laos, Myanmar, Philippines, Thailand, Singapore and Vietnam. Malaysia and Thailand emerged from recession last quarter, while Singapore has raised its growth estimate for this year as the global recovery strengthens.
To contact the reporters on this story: Daniel Ten Kate in Putrajaya at dtenkate@bloomberg.net; Barry Porter in Putrajaya at bporter10@bloomberg.net.
To contact the editor responsible for this story: Mike Millard at mmillard@bloomberg.net
China concerned by ASEAN subs - admiral
Source: http://en.rian.ru/world/20100227/158032505.html
By RIA Novosti.
China is concerned by the buildup of ASEAN submarine fleets in seas bordering China, a top Navy official said on Saturday.
According to the Zhongguo Xinwen news agency, Rear Adm. Yin Zhuo said members states of the Association of Southeast Asian Nations were seeking to dominate the southern seas and thus posed a threat to China.
"If this continues at the current rate, in several years the ASEAN countries will create powerful naval forces," the admiral said, stressing that "this is naturally becoming a challenge to neighboring countries, including China."
He referred in particular to Vietnam which had signed a contract to buy submarines and started building a submarine base east of the Strait of Malacca between Malaysia and the Indonesian island of Sumatra.
In recent years, some ASEAN countries have been buying modern diesel electric submarines from Russia and other European nations.
In particular, Singapore is buying Vastergotland-class submarines from Sweden, Malaysia has been purchasing Scorpene submarines from France and Italy, while Vietnam signed a contract in 2009 to buy six Project 636 submarines from Russia.
ASEAN: Quick Resolutions To Issues Of Mutual Concern
Source: http://www.bernama.com/bernama/v5/newsindex.php?id=478447
By Bernama
Asean member countries expect quick resolutions to trade and economic issues still pending between and among member states, says an Asean top official.
"There are some difficulties here and there, between and among a few members, issues such as rice between the Philippines and Thailand as well as petroleum products of Vietnam.
"There has been some progress, with six Asean countries bringing down the tariffs on goods to zero at the beginning of this year (with the Asean Free Trade Agreement (AFTA) coming into effect on Jan 1, 2010)," Asean secretary-general Dr Surin Pitsuwan told reporters before the Asean Economic Ministers' (AEM) Retreat working dinner here Saturday night.
Surin said the ministers will also review the progress of the Asean Economic Community (AEC) besides discussing issues of mutual concern in the areas of trade, goods, services and investment to enable member countries to monitor and move systematically to achieve the one single market by 2015.
He said they will also look into the progress of dialogues held with Asean dialogue partners like China, India and Australia-New Zealand.
"All these things will contribute to our own evolution into one single market which the international community is focusing on very much with interest us we move into a single market with a combined gross domestic product (GDP) of US$1.6 trillion," he added.
Email from: Ms. Wahyuningrum (Yuyun)
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When: 7/2/2014
