ASEAN – CHINA the New Economic Partnership

1. ASEAN – CHINAthe New Economic Partnership Mr. Zhou Hongli Minister Counsellor Embassy of People’s Republic of China February 18, 2004

2. Main Topics: • Economic cooperation between China and ASEAN • ASEAN-China Free Trade Area (ACFTA) • China ASEAN Expo

4. China and ASEAN: Close Neighbors • China’s foreign policy: 1. To build friendly relationship and partnership with neighbors (与邻为善,以邻为伴); 2. To build amicable, tranquil and prosperous neighborhood (睦邻，安邻，富邻） • Friendly & co-operative relations serves the fundamental interests of our peoples and the stability and development of the region.

5. China-ASEAN Comprehensive Economic Cooperation • Bilateral Trade: ASEAN remains China’s the 5th largest trading partner in the past 10 years. • Two-way investments, and contracting projects and labor service have increased tremendously. • Close cooperation in international and regional economic arena: WTO, APEC, ASEM, ASEAN+3, ASEAN-China FTA, etc.

6. Characters of Bilateral Trade • Grew fast: 20% annual increase since 1990; • Share in China’s total trade rose: from 5.9% in 1990 to 9.2% in 2003; • Trade balance: in favor of ASEAN countries (US$16.4 billion in 2003) • China’s largest trading partner in ASEAN: Malaysia overtook Singapore since 2002.

7. Fast Trade Growth b/n China and ASEAN

8. Trade with ASEAN Members in 2003(in million US dollars)

9. Malaysia has the Largest Shares

10. Trade Target • China and ASEAN leaders agreed: the trade between China and ASEAN shall reach US$100 billion in 2005. • Achievable: need only 13% annual growth in the next two years.

11. ASEAN Total Investment to China(by the end of 2003) • Total projects: 22075 Share in China’s total: 4.75% • Total contractual amount: US$64.59 billion Share: 6.84% • Total paid-up investment: US$32.37 billion Share: 6.46%

12. Singapore is the Largest ASEAN Investor in China

13. Total Chinese Investment in ASEAN ( by the end of 2003,in million US$)

14. Shares of Chinese Investment in ASEAN against in Asia and the World Share in Asia Share in the world

15. Process of Establishing ACFTA • At the 4th ASEAN+China (10+1) Summit in Singapore in November 2000, leaders of ASEAN and China agreed to explore the possibility of establishing a free trade area (FTA). • The ASEAN and China Expert Group on Economic and Cooperation was formed to study the feasibility of FTA.

16. Process of Establishing ACFTA • At 5th ASEAN+China Summit in Brunei in November 2001, leaders endorsed the proposal made by the Expert Group for a Framework on Economic Cooperation and to establish an ASEAN-China Free Trade Area within 10 years. • Trade Negotiation Committee was formed to negotiate tariff reduction or elimination.

17. Process of Establishing ACFTA • At 6th ASEAN+China Summit in Cambodia in November 2002, leaders singed “Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China”. • The Agreement is the groundwork for establishment of ACFTA by 2010 for the 6 older ASEAN members and 2015 for 4 newer members.

18. Process of Establishing ACFTA • At 7th ASEAN+China Summit in Indonesia in October 2003, leaders signed Protocol to Amend the Framework Agreement. • to concrete certain issues, especially “Early Harvest Programme”, which already started on January 1 2004, and “Rules of Origin”

19. What to happen in 2004 • ASEAN and China agreed negotiations for the trade in goods component of the FTA will be concluded by 30 June 2004

20. Significance of ACFTA • Third largest FTA in terms of economy and trade, next to NAFTA and EU. • The Largest FTA in terms of population: 1.7 billion of population US$2000 billion of GDP US$ 1200 billion of trade • Unlike NAFTA and EU, ACFTA is dominated by developing countries.

21. ACFTA Tariff Reduction • Products in the Normal Track: tariff rates to be gradually reduced or eliminated over a period from 1 January 2005 to 2010for ASEAN 6 and China, and from 1 January 2005 to 2015for ASEAN 4; • Products listed in the Sensitive Track: tariff rates to be reduced in accordance with the mutually agreed end rates and end dates.

22. Early Harvest Programme Tariff reduction commenced from January 1 2004, 0% tariff rates by 2006. It covers more 500 products, mostly agricultural products listed in the first 8 Chapters of HS Code.

23. Rules of origin At least 40% of contents from ACFTA Trade in service For services and investment, negotiations commenced in 2003 and would be concluded as expeditiously as possible. 

24. ACFTA also Covers Cooperation in Other Areas • Cooperation in 5 priority sectors, namely: (a) agriculture; (b) information and communications technology; (c)human resources development; (d) investment; and (e) Mekong River basin development.

25. And other areas: banking, finance, tourism, industrial cooperation, transport, telecommunications, intellectual property rights, small and medium enterprises (SMEs), environment, bio-technology, fishery, forestry and forestry products, mining, energy and sub-regional development.

26. Other Measures Relating to Trade • Elimination non-tariff barriers; • Progressive liberalisation of trade in services with substantial sectoral coverage; • Establishment of effective trade facilitation measures, including, but not limited to, simplification of customs procedures and development of mutual recognition arrangements;

27. Welcome to CHINA-ASEAN EXPO • At the 7th ASEAN+China(10+1) Summit Meeting, on October 8 2003, Chinese Premier Wen Jiabao suggested that a China–ASEAN Expo be held yearly, starting from 2004, in Nanning, China to promote mutual commercial cooperation. • Chinese Premier’s proposal was welcomed by ASEAN leaders and was later written into the Chairman's Statement of the Summit

28. Purpose of CHINA-ASEAN EXPO To promote the construction of China-ASEAN Free Trade Area (CAFTA), sharing opportunities of cooperation and development.

29. TIME AND VENUE • Every November, starting from 2004, in Guangxi, China • This year: November 3-6, 2004, at Nanning International Convention and Exhibition Center.

30. SPONSORS AND ORGANIZERS: • Sponsors: Ministry of Commerce of China Ministries of Trade or Commerce of ASEAN Members • Organizer: Government of Guangxi Zhuang Autonomous Region, China

31. SCALE OF THE EXPO: • Accommodates 2,000 international standard exhibition booths, • 200 non-standard booths • An outdoor exhibition area of 26,000 square meters. • It is estimated to receive some 20,000 businessmen worldwide.

32. ACTIVITIES • Trade in goods: to promote trade among ACFTA members; • Talks on investment: to enlarge two-way investment in ACFTA, introducing investment environment, releasing investment information; • Trade in services and other areas of cooperation: to promote the flow of capital, information, talents, enhance the cooperation in tourism, telecommunication, logistics, finance, project contracting and other areas;

33. ACTIVITIES • Theme seminars: on hot topics of CAFTA construction, which invite the attendances of government officials, experts, researchers, and entrepreneurs • Culture exchange: showing the splendid culture of all nations that would further promote mutual understanding and friendship

34. For Participation and More Information 1. IE Singapore Mr. Lim Kay Siong Tel: 64334477 Fax: 62387560 2. Guangxi Economic and Trade Commission Mr. Nong Rong or Ms. Huang Yuan Tel: (86771)-2109510 or 2109509 Fax: (86771)-2109835 or 2109266 Email: caexpo@caexpo.org Website: www.caexpo.org