China, ASEAN kick of trade talks

China, ASEAN kick of trade talks

Reuters, Beijing

Senior officials from China and the Association of South East Asian Nations (ASEAN) kicked off their first round of high level talks on Tuesday aimed at establishing the world's most populous free trade area.

The negotiations, scheduled to last three days, were the first aimed specifically at hammering out details for a China-ASEAN free trade zone which the two sides agreed last November to work towards over the next decade.

"The decision of China and ASEAN to establish the free trade area is a wise policy choice," said Long Yongtu, China's vice minister of foreign trade and economic cooperation.

"In the wake of the Asian financial crises and the slowdown of the Asian and world economy, the necessity and urgency of strengthening economic links between China and ASEAN loom large," he said.

A China-ASEAN free trade area would bring together some 1.7 billion people, with a combined gross domestic product of US$2 trillion and trade of $1.2 trillion, Long told delegates from ASEAN's 10 member states plus China.

The rapid economic growth of China, the world's most populous country and a bright spot in a shaky global economy, has raised fears in the region it could overwhelm its neighbours and sap foreign direct investment from Southeast Asia.

But China has worked hard to burnish its image and assuage those fears, playing up its growth as a source of opportunities rather than a threat.

"In our road toward the free trade area, we will inevitably face the challenges of adjusting industrial structure, optimising division of labour and cooperation, enhancing coordination, accommodating different development stages and clearing up scepticism and worries," Long said.

"We can surely reach a win-win agreement that is of mutual satisfaction," he said.

Ramon Vicente T. Kabigting, director of the Philippines' Bureau of International Trade in Beijing for the negotiations, was hoping for the same.

"China is a formidable competitor," Kabigting told reporters. "We, however, have been dealing with them even without the agreement that we are working on now, and so we reckon that we might as well engage".

China's growing influence and push for increased links with ASEAN has also worried Japan, prompting Asia's biggest economy to counter China by proposing its own regional free trade pacts.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.