China-ASEAN free trade boom spills over into world economy

VNEconomyNews.com – Economic ties between China and the ASEAN (the Association of Southeast Asian Nations) boomed as a result of the free trade zone agreement put into effect in January 2010. That, experts say, will not only boost the regional economic integration in Asia but also benefit the world economy as a whole.

Trade between China and the ASEAN surged by 37.5 percent in 2010 to 293 billion U.S. dollars, which is very close to the trade volume of 298 billion U.S. dollars between China and Japan during the same period.

China’s trade tariffs on ASEAN products have been 0.1 percent on average since 2010, compared with its 9.8 percent tariff on all other foreign trade. Exports from Thailand to China, for example, soared by nearly 30 percent in 2010. It is very likely that China will soon replace the United States as the largest export market of Thai products.

The benefits of closer China-ASEAN economic ties go far beyond the two traders. Asia’s economy will play an increasingly important role in the world economy. Institutionalized cooperation in this region, such as the Greater Mekong Subregion and the Pan-Beibu Gulf Economic Cooperation, has further upgraded Asia’s status in the world economic order. Song Yinghui, a researcher on Southeast Asian economy at the China Institutes of Contemporary International Relations, said that a more integrated Asian economy would bring more “dividends” to the world as a whole.

Following the China-ASEAN free trade zone, the ASEAN’s leading role in the East Asian economic integration process has been further consolidated by the similar agreements between ASEAN and Japan, South Korea, Australia, New Zealand and India. That will in turn promote the economic cooperation in the Asia-Pacific region and regional economic cooperation globally, said Sun Yuanjiang, deputy director of Department of International Trade and Economic Affairs, Ministry of Commerce of China.

The proposed rail links between China and ASEAN countries will facilitate the realization of ASEAN’s ambition of building an ASEAN economic community by 2015. Several railway projects, including a China-Thailand 200-kilometer-per-hour high-speed rail, have been planned or under construction between China and Vietnam, Laos, and Myanmar.

The China-ASEAN free trade zone also provides a springboard for Chinese enterprises that eye Japanese and South Korean markets and businesses outside the region that seek a presence in the Chinese market. It has resulted in more free trade and trade facilitation in East Asia.

And the benefits of free trade are much wider than trade. The mutual trust built through trade and economic cooperation bring people together, according to a commentary in People’s Daily on Tuesday. The one-year-old China-ASEAN free trade zone, according to the commentary, is just “the beginning.”