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Booming Sino-ASEAN ties and more

Updated On: Jul 28, 2006

The Chinese have made it their doctrine to have a ‘peaceful rise (heping jueqi)’ in order to have a conducive environment for sustained economic development and this doctrine was at work in the ASEAN meetings held in Malaysia.

According to the Xinhua news agency (China’s official media), Chinese Foreign Minister Li Zhaoxing made the pledge that “China remains committed to supporting and participating in East Asia cooperation and to pursuing a policy of building good-neighbourly relationships and partnerships with its neighbours” at the ASEAN 10-Plus-Three Ministerial Meeting on 26 July 2006.

The Chinese strategy also outlined their focus on issues that are relatively non-contentious but extremely important to capacity-building in the region. Minister Li said “the Chinese side will actively support and participate in new 10-Plus-Three cooperation areas such as women affairs, poverty alleviation and rural development, disaster reduction and relief and development of mineral resources”. Visibly omitted were issues on terrorism, Myanmar and piracy – all sticking points with other big powers in the region.

China’s charm offensive also saw them dispensing goodies for ASEAN countries. "The average tariff rate on products originating from Asean [countries] will be lowered to 6.6 per cent by 2007 and 2.4 per cent by 2009," Bo said. "By 2010, China will have removed tariffs on 93 per cent of the goods from the Asean countries."  This is taking against the background of increasing economic ties between the two entities as ASEAN-China cooperation seems to have taken off. 

ASEAN is investing more in China and China is buying more goods/commodities from ASEAN. As of March 2006, China had attracted nearly US$40 billion of direct investment from ASEAN countries. According to the Ministry of Commerce, China's imports from ASEAN countries soared to US$81.6 billion between July 2005 and June 2006, up 20.4 per cent from a year ago, as a result of tariff reductions.

The surprise of the day came with China’s solicitation of ASEAN investments and cooperation in developing its southernmost region. China has earmarked its southern Beibu Gulf region to be developed as an economic hub with Malaysia and other Asean member countries in an initiative called the Pan-Beibu Gulf Rim Cooperation Plan that may see an expressway linking Singapore all the way to Nanning, the capital of China's southern Guangxi Zhuang Autonomous Region.

"If the great potential is realised, the gulf area can become China'a fourth economic powerhouse along its coastal regions," Jiang Zhenghua, vice-chairman of National People's Congress, was quoted as saying at a forum on regional cooperation held in Nanning Thursday. This plan enjoyed local support as Guangxi CPC Secretary Liu Qibao highlighted: "The plan is feasible because we only need to build about 300km of new road despite the whole length exceeding 3,000km."

The sense of optimism in ties between ASEAN and China seemed to have also rubbed off the ASEAN Secretary General. In an exclusive interview with Xinhua, ASEAN Secretary-General Ong Keng Yong said on 24 July 2006 that ASEAN and China have nurtured "good" partnership in the past 10 years ever since Chinabecame the regional grouping's dialogue partner, and the relationship is expected to be more prosperous and stronger in the next five years.

Following closely in the heels of the Chinese charm offensive, the US has also stepped up its commitment to ASEAN.  A five-year action plan aimed at boosting trade, investment and enhancing cooperation in areas such as fighting terrorism, HIV/AIDS was signed between ASEAN and US on Thursday (27 July). 

While two-way ASEAN-US trade (US$136 billion in 2005) is larger than ASEAN’s trade with China (US$130 billion), Mr Ong Keng Yong remarked that the group had still not tapped the full potential of trade with the US

The five-year action plan is the first step toward an ASEAN-US Trade and Investment Framework Agreement, a region-wide free trade agreement between the two partners.

Sources:

Foreign Minister Says China Committed to East Asian Cooperation (Xinhua, 26 July 2006)

China to Hasten Tariff Cuts on ASEAN Goods under FTA (The Nation, 25 July 2006)

Interview: ASEAN, China Nurture Good Partnership in Past Decade (Xinhua General News Service, 25 July 2006)

Malaysia Gains RM1.3 Billion Exports Under ASEAN-China FTA (Malaysia Economic News, 25 July 2006)

China Wants to Develop Beibu Gulf with ASEAN (Malaysia Economic News, 21 July 2006)

Beibu Gulf Economic Belt Expected to Boom Through Regional Cooperation (Xinhua, 21 July 2006)

US, ASEAN sign partnership deal (Straits Times, 28 July 2006)