China, ASEAN hope to speed free trade plan

Nanning (China), Oct 30: China and Southeast Asia are expected to lay the groundwork for accelerating the creation of the world's most populous free trade zone when leaders meet on Monday to commemorate 15 years of ties.

China and the Association of Southeast Asian Nations (ASEAN) have been moving toward a free trade area since 2002, progressively lowering tariffs on a range of goods, and are now discussing liberalising trade in services.

''The upcoming commemorative summit is widely believed to lay a solid foundation for accelerating the establishment of China-ASEAN free trade area, which will realise free flow of goods, services and investment,'' China's official Xinhua news agency reported.

China, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand are slated to drop tariffs on most normal products by 2010, while China and the remaining four ASEAN members -- Cambodia, Laos, Myanmar and Vietnam -- will reach that goal five years later, Xinhua said.

While analysts are not expecting much that is concrete to come out of Monday's summit, the meeting is a symbolic first in China and part of Beijing's broader efforts in recent years to deepen ties with Southeast Asia.

There are several obstacles to the establishment of the free trade area, not least ASEAN's own stalled efforts to improve economic ties among the group's 10 members.

Nevertheless, trade between China and the ASEAN states has been booming -- in the past 15 years it grew more than 20 percent a year, reaching more than 0 billion last year, Xinhua said.

ASEAN is China's fifth largest trading partner, and China is ASEAN's fourth biggest, according to Chinese figures.

The volume of bilateral trade is expected to reach 0 billion by 2008, two years ahead of schedule, Xinhua said, due to steps already taken toward the free trade area.

The trade has not been even, though. China ran a trade deficit approaching billion with the group last year as it sucked in minerals, timber and other goods to feed its resource-hungry economy.

ASEAN has been a free trade area since 1993, but some frictions remain.

China's efforts to allay fears once widespread in Southeast Asia -- that its growing economic might would be a threat to the region's economies -- have been largely successful, analysts say.

Reuters