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ASEAN – CHINA the New Economic Partnership. Mr. Zhou Hongli Minister Counsellor Embassy of People ’ s Republic of China February 18, 2004. Main Topics:. Economic cooperation between China and ASEAN ASEAN-China Free Trade Area (ACFTA) China ASEAN Expo. China and ASEAN: Close Neighbors.

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ASEAN – CHINA the New Economic Partnership

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ASEAN – CHINAthe New Economic Partnership

Mr. Zhou Hongli

Minister Counsellor

Embassy of People’s Republic of China

February 18, 2004

Main Topics:

  • Economic cooperation between China and ASEAN

  • ASEAN-China Free Trade Area (ACFTA)

  • China ASEAN Expo

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.

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.

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.

Fast Trade Growth b/n China and ASEAN

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

Malaysia has the Largest Shares

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.

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%

Singapore is the Largest ASEAN Investor in China

Total Chinese Investment in ASEAN

( by the end of 2003,in million US$)

Shares of Chinese Investment in ASEAN against in Asia and the World

Share in Asia

Share in the world

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.

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.

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.

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”

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

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.

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.

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.

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. 

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.

  • 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.

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;


  • 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


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


  • Every November, starting from 2004, in Guangxi, China

  • This year: November 3-6, 2004, at Nanning International Convention and Exhibition Center.


  • Sponsors: Ministry of Commerce of China Ministries of Trade or Commerce of ASEAN Members

  • Organizer: Government of Guangxi Zhuang Autonomous Region, China


  • 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.


  • 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;


  • 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

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: [email protected]


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