China-ASEAN trade may reach $200b
The Jakarta Post, Jakarta
Two-way trade between China and the Association of Southeast Asian Nations (ASEAN) is expected to nearly double to US$200 billion in the next five years.
China's President Hu Jintao said on Tuesday at a banquet held in his honor by the Indonesian Chamber of Commerce and Industry (Kadin)'s China Committee (KIKT), that due to the China-ASEAN free trade agreement, that will take full effect in 2010, China had "full confidence in materializing the goal".
The agreement aims at pushing down customs duty between both sides, which has a combined population base of over 1.7 billion, to a maximum of 5 percent and removing all investment barriers.
Last year, trade between China and ASEAN grew by 30 percent to $105.9 billion, maintaining ASEAN's position as China's fifth largest trading partner after the United States, Hong Kong, Japan and the European Union.
Hu also said that China's "sustained economic and social development" -- evidenced by last year's Gross Domestic Product growth of 9.5 percent -- would benefit all countries in the world.
"The rapid growth of China's economy has presented new opportunities ... especially for our neighbors," he said to the applause of over 600 businessmen in attendance.
Hu said China's 55-years of diplomatic relations with Indonesia had entered a "new phase of fast, sound and steady progress" that benefited the "peace, stability and prosperity of the region and the world at large."
Diplomatic ties with China were frozen in 1967 in the aftermath of the 1965 attempted coup that was blamed on the Indonesian Communist Party (PKI). Since the normalization of ties in 1990, trade between China and Indonesia had increased 12 fold from $1.1 billion in 1990 to $13.48 billion in 2004.
The 2004 trade balance between China and Indonesia, almost matching the $13.5 billion export-import flow with the United States, represented a 31 percent growth from 2003's $10.24 billion. Kadin expects two-way trade with China to reach $15 billion this year and $20 billion in 2006.
Hu said the increased prosperity of China's population, which has had a per capita GDP of over $1,000 since 2003, allowed "millions of Chinese citizens" to travel to ASEAN as both tourists and potential investors.
"An increasing number of Chinese enterprises look to ASEAN countries as favored destinations for investment," said Hu, adding that China's investment in the Indonesian energy sector alone had reached $1.2 billion.
According to data from the Indonesian Investment Coordinating Board, total Chinese investment in Indonesia for the five year period ending in 2004 reached $6.5 billion.
Coordinating Minister for the Economy Aburizal Bakrie said that a group of Chinese businessmen had committed to invest $10 billion in Indonesia in the near future.
"The planned investments will be in toll roads, electricity, oil palm plantations and the energy sector," he said.
Head of KIKT Kiki Barki said that relations with China these days were extremely important. "They have all the money now," he said. "If we can, we'd rope them over here to Indonesia to invest." (002)