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A Commemorative Album on Economic and Trade Cooperation for the 15th Anniversary of the Dialogue Relations Between China and ASEAN Serialization (2)

www.cafta.org.cn 来源:OUR JOURNEY TOGETHER 添加时间:2008-03-11 15:37:00

A summary of economic and trade cooperation for 15 years between China and ASEAN

                               By  Xu Ningning

      Deputy Secretary-General of China-ASEAN Business Council

 

China and ASEAN shared common mountains and rivers, and are closely related and mutually dependent. What is to be proud of is that we have kept traditional friendship and trade contacts for thousands of years. We are glad that we choose each other first and establish the economic community —— China-ASEAN Free Trade Area(CAFTA). In the economic and trade history between China and ASEAN, we have never been so close and active that we have entered into the golden period. The development of our relations have proved and will further prove that we need each other and the economy of East Asia even the economy of world will get profit from it.

 

.The remarkable achievements of economic and trade cooperation between China and ASEAN in recent 15 years

In the recent 15 years, the volume of trade between China and ASEAN has witnessed a big surge and the proportion of trade volume in the total amount increases continuously, two-way investment is increasing sharply, and China has more contracted projects in ASEAN countries.

 

1. The trades between China and ASEAN increases considerably

According to the statistics from Chinese Customs, in 1978, the volume of trade between China and ASEAN was only $ 859 million, Up to 1991, it came to $ 7.96 billion increasing 8 times during 13 years. Moreover, from 1991 to 2005, the volume of trade between China and ASEAN jumped from $ 7.96 billion to $130.37 billion in recent 15 years, increasing 15 times with the annual increasing rate of as high as 20 percent. This rate transcended the foreign trade increasing rate of China and ASEAN countries in the same period.

 

There were Singapore, Indonesia, Malaysia, Thailand, Philippines, and Brunei Darussalam in ASEAN in 1991. The diagram below shows the increase of trade between China and the six ASEAN countries in the recent fifteen years:

The statistics form of the increase of trade volume between China and the six countries

 

In 1991

In 2005

Increase

China and Singapore

$3.08 Billion

$33.15 Billion

9.8 Times

China and Indonesia

$1.88 Billion

$16.79 Billion

8 Times

China and Malaysia

$1.33 Billion

$30.7 Billion

22 Times

China and Thailand

$1.27 Billion

$21.8 Billion

16 Times

China and Philippines

$0.38 Billion

$17.56 Billion

45 Times

China and Brunei

$0.013 Billion

$0.26 Billion

19 Times

 

In 1991, Vietnam, Myanmar,Cambodia and LaoPDR hadn’t joined the ASEAN. (The time of these four new members joined the ASEAN: Vietnam joined in 1995, Myanmar and LaoPDR joined in 1997, Cambodia joined in 1999). The diagram below shows the increase of trade between China and the four countries in the recent fifteen years:

 

The statistics form of the increase of trade volume between China and the four countries

 

In 1991

In 2005

Increase

China and Vietnam

$0.032 Billion

$8.2 Billion

255 Times

China and Myanmar

$.039 Billion

$1.21 Billion

2 Times

China and Cambodia

$0.013 Billion

$0.56 Billion

42 Times

China and Lao PDR

$0.02 Billion

$0.13 Billion

5.5 Times

 

Notes: The data in 1992

In the first half of 2006, the trade volume between China and ASEAN increased 21.68% over the same period of the previous year, reaching $72.7 billion.

2. The volume of trade between both sides accounts for larger proportion in their own total trade volume. China turned into trade deficit from trade surplus. The structure of trade keeps changing positively.

In 1991, the proportion of trade volume between China and ASEAN accounted for 5.9 percent in the total volume of Chinese foreign trade. From 1991 to 2005, the total amount of Chinese foreign trade increased from $135.7 billion to $1.4221 trillion. Although it increased by 9 times, in 2005, the proportion of China-ASEAN trade volume still accounted for 9.2% of the Chinese foreign trade volume.

 

In 2005, China was the fourth largest trading partner of ASEAN, and ASEAN was the fifth largest trading partner of China. As for the countries, China was the biggest trading partner of Vietnam, the second major trading partner of Myanmar, the third major trading partner of Singepore, Thailand, and Pillipinns, and the fourth major trading partner of Malaysia, Indonisia, Cambodia. Among the top ten trading partners of China, Singepore was in the seventh place, and Malaysia was in the eighth place.

 

In 1991, China imported $3.82 billion from ASEAN. In 2005, the amount jumped to $75 billion, which increased nearly 19 times. As a result, ASEAN became the third import area of China. On the contrary, in 1991, China export $ 4.14 billion to ASEAN. In 2005, the amount jumped to $ 55.37 billion, which increased 12 times. In 1991, in the trade between China and ASEAN, China had a surplus of $ 0.32 billion, but in 2005, China turned into a trade deficit of $19.63 billion. In 1991, the main products that China traded with ASEAN were primary products and textile products. In the course of development, in 2005, the main products turned into industrial manufactured goods, among which the mechanical and electrical products were in the first place.

 

3. The trade increases and the two-way investment develops simultaneously.

ASEAN countries have become an important source from which China attracts foreign capital. ASEAN is also one of the best choices to which the Chinese enterprises “go out”.

 

In 1991, China had approved the merchants of ASEAN countries to invest $332 million in China, (the source of data: China Commerce Yearbook, published in 1991). In 2005, the amount of practical investment from ASEAN countries was $3.1 billion, in which there was $2.2 billion from Singapore, accounting for 71% of the investment from ASEAN in that year. By the end of 2005, the amount of investment in China from ASEAN countries came to $38.5 billion. The top three countries of ASEAN that invested in China was Singapore, Malaysia and Thailand, in which the amount that Singapore invested in China was $27.74 billion, in various industries and large areas.

 

As for the investment from China to ASEAN, although the absolute amount of the investment is not so large, the potential is great and the increasing rate is rapid. Up to the end of 1991, Chinese investment in the countries of ASEAN that had been approved and put on file by Ministry of Commerce of the People's Republic of China amounted to $150 million, in which it was $12.5 million in 1991. Furthermore, in recent years, as Chinese companies began to implement the strategy of “going out”, up to 2005, the volume of investment from China to ASEAN came to $1.08 billion. The actual figure should be bigger than it, because the above-mentioned figure did not include lots of private companies and medium and small companies that did not be approved and put on file by Ministry of Commerce of the People’s Republic of China. According to the statistics, by the end of 2005, China had invested almost 1,000 non-financial enterprises in the ten countries of ASEAN. The fields of investment had been expanded from small projects such as processing, assembling to big industry, such as building, hotels, electricity, mining and transportation. The forms of investment developed from FID to various forms such as technical invest and BOT. The top three countries of ASEAN that China invested in was Singapore, Thailand, and Vietnam. There are over 100 Chinese funded companies in Singapore that have gone public on the stock-market. There are 278 Chinese funded non-financial companies in Thailand. In Cambodia, China has been the biggest investment country of Cambodia for three years in succession.

 

4. The contracted projects and labor service cooperation between China and ASEAN develops quickly

The countries of ASEAN are our important markets of contracted projects and labor service. The projects involve power stations, bridges, roads, airports, docks, factories, offices, residential buildings and so on. The technology of Chinese contracted projects in ASEAN countries improves continuously, and the quality and impacts are praised by local people. By the end of 2005, the total amount of Chinese contracted projects in ASEAN countries came to 35 billion, accomplishing turnover 23.2 billion. Chinese companies accomplished turnover $1.166 billion in Singapore, $309 million in Thailand, $275 million in Vietnam, $183 million in Philippines, $123 million in Cambodia.

 

.The economic and trade cooperation between China and ASEAN can be divided into three stages in recent 15 years.

 

The first stage (from 1991 to 1996), at this stage, China developed bilateral economic and trade exchanges with the six members of ASEAN, and the other four countries that had not joined ASEAN at that time, Vietnam, Myanmar, Cambodia, and LaoPDR (details as the diagram below). It laid a solid foundation for the development of economic and trade cooperation between China and ASEAN in the future.

 

 

 

The diagram of the trade growth between China and the six countries of ASEAN from 1991 to 1996 (Unit: $ a hundred million)

 

 

           

 

         

The diagram of the trade growth between China and Vietnam, Myanmar, Cambodia, and Lao PDR from 1991 to 1996 (Unit: $ a hundred million)

 

The second stage (from 1997 to 2000), at this stage, China and ASEAN expanded cooperation to deal with the Asian Financial Crisis together. In 1997, China and ASEAN issued a Joint Declaration on China-ASEAN cooperation toward the 21st Century. Between 1999 and 2000, China signed the Joint Declaration of the Framework Agreement with the ten members of ASEAN separately on the future bilateral cooperation, which determined our steady and long-term development on the basis of neighborly cooperation and mutual trust and benefit. The above-mentioned eleven significant Joint Declarations paid special attention on the economic and trade cooperation, and they put forward that the members should expand the trade and two-ways investment. Up to 2000, China and the ten ASEAN countries signed the Agreement of Encouragement and Protection of Bilateral Investment, which promoted the cooperation between China and ASEAN to a new level.

The third stage (from 2001 to 2005), at this stage, China and ASEAN reached the consensus on the establishment of the China-ASEAN Free Trade Area(CAFTA) , afterwards, they signed related agreements. In July 2005, CAFTA began to implement. The construction of CAFTA was a milestone of significance in the history of the development of China-ASEAN relations. It was worth mentioning that the steady and developed political relationship between China and ASEAN provided advantages to the economic and trade cooperation. In 2002, the two sides signed the Declaration on the Conduct of Parties in the South China Sea (DOC). In 2003, China was the first Dialogue Partner to accede to the Treaty of Amity and Cooperation (TAC) in Southeast Asia, and they signed the Joint Declaration on Strategic Partnership for Peace and Prosperity. In 2004, a five-year China-ASEAN Plan of Action to implement the Joint Declaration was adopted that set specifically the cooperative projects and targets of both sides from 2005 to 2010. The political and economic relationships between China and ASEAN exchanged effectively and reached a new height at this stage.

The chart of the trade growth between China and ASEAN from 1991 to 2005

 

.The analysis of the development of the economic and trade cooperation between China and ASEAN in recent 15 years

 

In recent 15 years, the achievement on the cooperation between China and ASEAN is hard-earned. In the latter half of 2005, the ASEAN consulting organization——the ASEAN-China Eminent Persons Group(ACEPG) submitted a evaluation report to the China-ASEAN Summit, in which they believed the cooperation between China and ASEAN got remarkable and practical achievement, China was more effective and pragmatic than other dialogue partners.

 

1. Trusting each other and choosing close cooperation together

There is an old saying in China that good neighbors are better than gold. China and ASEAN have long-term and traditional friendship and similar historical experience. We have our own advantages with resource and industrial structure, which are highly complementary, so that we have large potentialities to cooperate. We have common words and mutual benefits in the international social affairs. We have common desire toward stability and development. For this purpose, in the course of the development of economic globalization and regional economic integration, China and ASEAN make a correct strategic decision in time, that is, developing the economic and trade cooperation.

 

Just as this decision, we are not restricted by the different systems of politics and economy, the different belief of religion and culture, and the different development levels of economy. According to the guideline of “equality and mutual trust, cooperation and common benefit”, we promote the economic and trade cooperation between both sides to a new level, and become an economic cooperation model of developing countries.

Just as this decision, we went through the historical test of Asian Financial Crisis. At the same time, we insisted on the determination that the only way we could conquer the difficulties was to expand cooperation.

Just as this decision, it only cost five years from the proposal to the implementation of the agreement on CAFTA. This speed is noticeable among so many FTAs in the world.

Just as this decision, it enhanced the economy and the quality of people’s lives in eleven countries, improved the international position of ASEAN and East Asian economic integration greatly, and contributed to the global economic development.

In recent 15 years, economic and trade cooperation is the real motivation that could bring economic benefit among the extensive and deepening cooperation in various fields between China and ASEAN.

2. Acting positively and encouraging cooperation at the opportune moment.

During the 15 years when China and ASEAN established dialogue relationship, the reason why the economic and trade cooperation develops so quickly is that we act positively and pragmatically after we made the right decision and insist on the guideline of “equal negotiation, mutual profits and cooperation.

In recent 15 years, the leaders of China and countries of ASEAN exchanged visits frequently. They emphasized the development of economic and trade relationship at the bilateral leaders summit. Particularly, the governments of China and ASEAN countries put forward the target that the volume of bilateral trade up to 2010, and established and strengthened the cooperative system to improve the development of economy and trade. China and nine countries of ASEAN have founded the bilateral economic and trade cooperation commission, in which China-Thailand commission and China-Singapore commission were co-chaired by Deputy Prime Ministers. China and ASEAN have founded eight cooperative systems at ministerial level on agriculture, communication and so on, which played important roles in the development of economic and trade cooperation.

In recent 15 years, China and ASEAN act positively to improve the cooperative standard, enrich the cooperative content, enlarge the cooperative fields, and consummate cooperative forms. China and ASEAN enlarged the cooperative fields from 5 to 10, including agriculture, information industry, human resources development, two-way investment, Mekong River Basin Development, transportation, energy resources, culture, tourism, and public health.

In recent 15 years, the chambers of commerce of China and ASEAN countries communicate and cooperate closely. In 2001, China-ASEAN Business Council founded in Jakarta, the capital of Indonesia. Mr. Zhu Rongji, who was the Premier of the State Council of People’s Republic of China at that time and Mrs. Megawati who was the president of Indonesia at that time attended the conference. As the delegate of the commercial cooperation between China and ASEAN, China- ASEAN Business Council is the one of dialogue and cooperation systems which plays an active role in improving the cooperation of two sides.

The good political relationship can make business affairs smoothly. In recent 15 years, especially in recent 5 years, the enterprisers of China and ASEAN sought and developed the business opportunities. In the most of countries of ASEAN, Chinese companies’ councils have been established. The business cooperation were increasing, the borders of China-Vietnam, China-Myanmar, and China-Lao PDR were thronged with visitors. Chinese companies open up the market of Europe and America by Singapore, open up the market of Islamic countries by Malaysia, open up the market of India by Myanmar. Both parties extend the cooperation to the international market. In 2005, the number of Chinese tourists visiting ASEAN countries amounted to 3 million, accounting for 1/3 of the total Chinese tourists who left the country on tour abroad. Meanwhile, China became an important destination for ASEAN tourists traveling abroad. In 2005, the number of ASEAN tourists visiting China topped 3 million, accounting for about 1/5 of the total foreign tourists to China. It can be seen that the cooperation between China and ASEAN in diverse fields presents a scene of prosperity, such as trade, investment, contracted projects and tourism.

3. The pioneering and innovated spirit makes the construction of CAFTA enter into the high tide

The pioneering and innovated spirit is the motivation of the development between China and ASEAN. In recent 15 years, we put forward new cooperative contents and methods in the purpose of mutual development, which keep the exuberant vitality of two sides. The foundation of CAFTA is the centralized portrayal of cooperative creation.

The establishment of CA FTA is a significant act for China and ASEAN to deal with the economic globalization and regional economic integration, is the reflection for the need of China and ASEAN to choose and cooperate with each other, and is an inevitable outcome of the increasing economic and trade cooperation between China and ASEAN in recent years. The economic and trade relationship between China and ASEAN will reach a new height with the foundation of CAFTA. CAFTA is the first FTA for both China and ASEAN to establish FTA with the external parties. It is called “the third economic system in the future world” after the North American Free Trade Area and European Union. CAFTA is also deemed as the biggest FTA in terms of population with a market of 1.85 billion consumers. We realize that it is not easy for us to establish this huge FTA for we met with some difficulties. However, China abides by the diplomatic guideline of “Treat neighbors with kindness, and treat them as partnersl” and the diplomatic policy of “make neighbors harmonious, secure and rich ”, and ASEAN also choose China to develop together. The foundation of CAFTA reaches new stages one after anther.

In 2002, China put forward the proposal of establishing the CAFTA at the 4th China-ASEAN Summit. In 2001, the two sides reached the consensus on the foundation of CAFTA at the 5th China-ASEAN Summit. In 2002, the two sides signed the Framework Agreement on Comprehensive Economic Cooperation at the 6th China-ASEAN Summit, which was the fundamental document for establishing CAFTA and started up the construction of CAFTA. In 2004, the two sides signed the Agreements on Trade in Goods and Dispute Settlement Mechanism under the Framework Agreement on Comprehensive Economic Cooperation at the 8th China-ASEAN Summit.

 

In October 2003, China and Thailand began to implement the Early Harvest Program (EHP). The implementation of the Early Harvest Program was fully launched in 1 January 2004, ASEAN and China opened 500 categories of agricultural products to each other. The Agreement on Trade in Goods has been implemented since July 2005, over 7000 categories of products began to reduce and eliminate tariff year by year. According to the plan of the construction of the FTA, by 2010, China and the six old members of ASEAN will realize zero tariffs; by 2015, China and the four members of ASEAN will realize zero tariffs. The unified market is establishing, which consists of 11 countries and it will change the economic map of the world.

 

The China-ASEAN EXPO was successfully organized with the quick launch of CAFTA. To encourage the cooperation and mutual profits of the companies between China and ASEAN, and to promote the accomplishment of CAFTA on schedule, at the 7th China-ASEAN Summit, the Premier of  China State Council Mr. Wen Jiabao put forward the suggestion that the annual China-ASEAN EXPO was organized in Nanning, China. The countries of ASEAN and the secretariat of ASEAN agreed and supported this proposal. In 2004, the Ministry of Commerce of the People’s Republic of China and the economic ministries in the governments of ASEAN countries held the first China-ASEAN EXPO in Nanning, China. The second China-ASEAN EXPO in 2005 was grander than the first one. The successful holding of China-ASEAN EXPO brought positive impacts to the economic and trade cooperation of the 11 countries, and showed the endless cooperative opportunities.

 

The construction of CAFTA plays an significant role in speeding up the comprehensive cooperation between China and ASEAN.

 

The year 2006, the new starting point of the economic and trade cooperation between China and ASEAN

 

2006 has been earmarked as an important “Year of Friendship and Cooperation between China and ASEAN”. Meanwhile, it is also a new starting point for ASEAN and China to the further cooperation, which predicts more extensive and brighter prospects of the mutual cooperation.

 

At present, although there are a lot of problems of the mutual cooperation that need us to solve, and there are a lot of changes that need us to deal with, we still believe that the economic and trade cooperation between China and ASEAN are irresistible, and we believe that the cooperation will show the win-win future.

 

Looking back the past 15 years, all sorts of feelings well up in our mind: we went through the commemorative period together. We look forward to the future with full confidence. Up to 2010, the volume of trade with $200 billion between China and ASEAN will come true in advance. Up to 2015, CAFTA, a brand new economic system, will show to the people all over the world.

 

We are hand-in-hand tightly, shoulder-by-shoulder closely to walk forward the bright future!

                          

(Author: The managing deputy-secretary general of Chinese Secretariat of China-ASEAN Business Council)

                                                                             July 2006

上一篇: A Commemorative Album on Economic and Trade Cooperation for the 15th Anniversary of the Dialogue Relations Between China and ASEAN Serialization (1)
下一篇: What opportunities will Vietnam’s entry into WTO bring to China?
 
 

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