The agreement to establish a China-ASEAN Free Trade Area (FTA) has helped trade grow rapidly and the momentum will continue, a senior official said yesterday.

 

"The FTA is the major contributor to China-ASEAN trade growth. It has benefited, and will continue to benefit, both sides," said Gao Hucheng, vice-minister of Commerce.

 

"The negotiation of China-ASEAN FTA has progressed smoothly, and work should be complete by 2010 as scheduled," he added.

 

Since the 1990s, bilateral trade has witnessed an average annual increase of more than 20 percent, and since 2001, it has registered even stronger growth.

 

In 2004, China-ASEAN trade volume rose by 35 percent year-on-year, reaching US$105.9 billion, realizing in advance the goal of topping US$100 billion by 2005. In 2005, bilateral trade stood at US$130.3 billion, with a year-on-year increase of 23 percent.

 

Until 2005, ASEAN became China's fifth largest trading partner for 13 consecutive years.

 

It is the fifth largest export market and the third largest import source for China.

 

China has also become the fourth largest trading partner for ASEAN.

 

"Bilateral trade will surpass US$200 billion by 2010. Trade sectors will shift away from primary goods to finished products like machines, energy, high-tech, and agricultural products," said Gao.

 

In November 2002, the leaders of China and ASEAN signed the Framework Agreement on China-ASEAN Comprehensive Economic Cooperation, and set the ball rolling on the FTA.

 

"This was a strategically important starting point for China-ASEAN trade," said Gao.

 

In November 2004, the two sides signed the Agreement on Trade in Goods and the Agreement on Dispute Settlement Mechanism under the Framework of China-ASEAN FTA. On July 20 2005, the tariff reduction process started on all fronts.

 

In July 2006, bilateral trade reached US$143 billion, increasing by 23 percent year-on-year.

 

By 2010, China will establish FTAs with Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, while Vietnam, Laos, Cambodia and Burma can enjoy five more years of transition.

 

"By that time, China and ASEAN will realize zero-tariffs for most products," said Gao.

 

There is also financial support from the Chinese Government to promote bilateral trade.

 

In the next three years, one-third of the loans China plans to offer to developing countries will go to ASEAN member states, and the nation will also provide loans worth US$5 billion to Chinese companies aiming to expand business in ASEAN member states.

 

(China Daily September 7, 2006)