China-ASEAN
In November 2001, China and the 10-member Association of South East Asia Nations (ASEAN) began negotiations to set up a free trade area.
One year later, a framework agreement for the planned FTA was signed. The FTA, a zero-tariff market of more than 1.7 billion people, has been targeted to come into force in 2010 for the six original ASEAN members (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) and in 2015 for the other four (Burma, Cambodia, Laos and Vietnam). Implementation of the framework agreement would occur in stages. For instance:
An early harvest programme covering trade in goods came into force in July 2005. Negotiations on a dispute settlement mechanism were finalised in 2004 for implementation in 2005. Negotiations on trade in services were completed and an agreement signed in January 2007, for implementation in July 2007. The China-ASEAN investment agreement was to be signed at the ASEAN Summit in Thailand in December 2008.
Separately, China signed a bilateral FTA with ASEAN member Singapore in October 2008. Beijing has also been hammering out a lot of separate, smaller and more specific bilateral deals with ASEAN neighbours, such as the infamous Philippine-China investment agreements (the subject of huge corruption scandals in the Philippines in 2007), harmonised food safety standards with Thailand (to facilitate agricultural trade) and numerous arrangements with the Mekong Delta countries.
Politics around the China-ASEAN deal are delicate as ASEAN states want to avoid China’s domination and yet build their economies by interacting with China, especially given the slowdown in demand from the US and European markets. At the same time, China is moving up the manufacturing value-chain losing need for primary products that ASEAN states produce while its search for raw materials such as minerals and oil has rapidly gone global. Finally, the coming into force of full-scale zero-tariff farm trade with China from 2010 onward has raised many fears in the ASEAN world.
(Picture: Workers unions in Indonesia protest against the ASEAN-China FTA)
last update: May 2012
Articles
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21-Jul-2012 HK accession means opportunities
If Hong Kong accedes to the China-Asean Free Trade Area (CAFTA), Malaysia would find opportunities to expand its services sector through Hong Kong’s established service-based economy. -
5-Aug-2011 The Nation China the big export winner, Thailand ’not fully benefiting’: TDRI
China seems to be the manufacturing base that is benefiting the most from the free-trade agreement with Asean countries, as the value of exports from China to Asean in three major industries have increased significantly over the past decade, according to the Thailand Development Research Institute (TDRI). -
27-Apr-2011 RI, China, to improve work on trade
Chinese and Indonesian leaders are expected to sign an MoU on strengthening bilateral trade this week, one year after the ASEAN-China Free Trade Agreement (ACFTA) came into effect. -
27-Apr-2011 Indonesia Shouldn’t Renegotiate China FTA
Indonesia should focus on increasing its competitiveness rather than try to renegotiate the Asean-China Free Trade Agreement, economists and business executives said. -
23-Apr-2011 Chamber of commerce calls for ACFTA renegotiation
Debate over the ASEAN-China Free Trade Agreement (ACFTA) goes on as Indonesia’s Chamber of Commerce (Kadin) calls for renegotiation to give time for Indonesia to develop its downstream industry. -
9-Feb-2011 CSM Southeast Asia embraces China trade, but how’s the relationship? It’s complicated.
Lower export barriers are spurring trade and investment from China, but local producers now worry that a flood of cheap Chinese imports will put them out of business. -
19-Jan-2011 dpa Chinese firm launches 1.5-billion-dollar mall in Bangkok
’The purpose of the project is to respond to the vigorous growth of the ASEAN-China free trade area,’ said Dong Hongqi, president of the Ashima Yunnan Cultural Industry Group, a Yunnan-based state enterprise, brushing off criticism that the complex was designed to promote cheap Chinese goods on the Thai market to the detriment of local producers. -
17-Jan-2011 Xinhua Interview: China-ASEAN FTA adds new vitality into Sino-Philippine economic and trade cooperation: official
"It’s fair to say the Philippines is becoming one of the main destinations for Chinese companies to make overseas investment," says Wu Zhengping, Economic and Commercial Counsellor of the Chinese embassy in the Philippines. -
22-Nov-2010 The Hindu China plans S-E Asia rail links
China will, in coming months, accelerate plans for high-speed rail links with Myanmar, Cambodia, Thailand and Laos, as part of a wider effort to deepen engagement with its Southeast Asian neighbours, officials said this week -
5-Sep-2010 Jakarta Post Indonesia and China both claim trade deficit
Nine months into the full implementation of the free trade agreement between China and the Association of South East Asian Nations (ASEAN), of which Indonesia is a member, data provided by Indonesia and China show both of them suffering a trade deficit against each other. -
24-Aug-2010 Jakarta Post Imports of F&B products begin to hurt local producers
Imported food and beverage products have begun to flood the Indonesian market following the implementation free trade agreements between ASEAN and China early this year, a business executive have said. -
26-Apr-2010 Blaming China: Indonesian garment makers say free trade pact leaves them on brink of collapse
Mufardi Rusli’s neighbors hunch over tables covered in brightly colored fabric, the whirring of their sewing machines echoing across his Jakarta neighborhood. For Rusli, the sound is a bitter reminder of the $2 line of jackets that bankrupted him, costing him a garment business it took 15 years to build. -
26-Apr-2010 Corporations Told To Exploit Opportunities From Asean-China FTA
Corporations should try to pragmatically capitalise on the opportunities of the Asean-China Free Trade Area (ACFTA), instead of having reservations about it, says Deputy Prime Minister Tan Sri Muhyiddin Yassin. -
22-Apr-2010 Unlevel Playing Field Under Asean-China FTA, Say Aluminium Makers
An unlevel playing field exists under the Asean-China free trade agreement (FTA), according to the Federation of Malaysian Manufacturers Aluminium Manufacturers Group (FMM AMGM). -
5-Apr-2010 Jakarta Globe China promises Indonesia $2b in loans for infrastructure projects as part of ACFTA
China will provide Indonesida with $1.8 billion in export credits to finance the import of Chinese goods for infrastructure projects such as toll roads, bridges and coal-fired power plants. -
5-Apr-2010 Jakarta Post Will ASEAN-China FTA boost Indonesia’s agricultural export?
Tariff elimination under the ACFTA will not automatically boost Indonesia’s agricultural export but is an entry point to increase market share in China -
26-Mar-2010 Rebelión China ata a sus vecinos
Por lo que parece los líderes de la ASEAN han empezado a darse cuenta de las consecuencias de lo que acordaron: que en esta zona de libre cambio la mayoría de las ventajas serán para China. -
2-Mar-2010 IPS El neocolonialismo chino
Las fábricas de propaganda, especialmente en Pekín, proclaman que CAFTA está trayendo "mutuos beneficios" a China y a ASEAN. La realidad es que la mayor parte de las ventajas probablemente irán a China. -
24-Feb-2010 TNA Thai tangerine producers affected by ASEAN-China FTA
Thailand’s 4,000 small tangerine farmers are expected to reduce their output almost by half, as they cannot compete with the tariff-free Chinese imports. -
12-Feb-2010 Brunei FM Malaysia govt will address concerns over surge in imports from China
Many Malaysian manufacturers are struggling to survive the influx of Chinese goods since the China-ASEAN FTA came into effect on 1 January 2010.
