EIGHT years ago, during the 2001 Asean Summit in Brunei Darrusalam, the idea of Asean forging a bilateral pact with China was brought up. One year later, the Framework Agreement on Comprehensive Economic Cooperation was signed in Cambodia.
That pact bore fruit with the announcement that on Jan. 1, 2010, China and the original six nation members of Asean were putting up a free trade area as their response to the economic grouping of Europe and the United States.
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Thus, China, with the Philippines, Thailand, Brunei, Malaysia, Singapore and Indonesia will liberalize the movement of products and investments to shore up their economies enough to challenge giant economic organizations in the Americas and in Central Europe. For years now, Asian nations had been dependent on the West and Europe as source of their economic life.
Years ago when I was guest of China’s Writers Union, I traveled by railroad from Beijing to Shanghai. For hours, I saw a cargo train loaded with raw materials on the way to factories in Beijing. I thought that such spectacle signifies a tremendous economic future for China that other countries in Asia should better watch out.
I wrote about this in my column in this paper then. And it seems that China’s ascendant economic strength now confirms my earlier fears about China’s developing economy.
But it is providential that we have become one of the pillars of the Association of Southeast Asian Nations (Asean) and, together with the other members, have developed strong economic and political ties with China. The combined consuming population of an estimated 1.7 billion consumers signals a highly satisfying turn in Asia’s economy.
Truth to tell, we should glory in the reality that we are part of it. Observers say the Free Trade Area (FTA) would eventually rival the European Union and the North American Free Trade Area.
According to Teng Teng Dar, Chinese international trade and economic affairs director general in Beijing, the average tariff rate China charged on Asean goods would be cut to 0.1 percent from 9.8 percent, while the average tariffs imposed on Chinese goods by Asean states will be reduced to 0.6 percent from the prevailing 12.8 percent.
It was noted that the Asean-China trade has exploded in the past decade from $39.5 billion in 2000 to the current $192.5 billion.. This would soon rise further with the FTA.
Indeed, the Asean-China FTA holds the prospect of being the globe’s biggest free trade zone. It will be so not only in terms of its almost 1.7 billion consumers, but also with the estimated combined gross domestic product of $2 trillion and a total international trade valued at about $1.23 trillion.
Certainly, with the lessened trade restrictions between China and the Asean countries, there would result an increase in the region’s gross demostic product along with an improvement in economic efficiency, a truly lucky break for us.