THE creation of an Asean-China Free Trade Area (ACFTA) would create market opportunities and challenges for both Asean and China but to complement China, Asean would first have to put its own house in order, Asean-Chambers of Commerce and Industry, Myanmar president Pyone Maung Maung said.
Asean must be a single unified economy in the form of Asean Free Trade Area (Afta) if it is to better complement with and benefit from China's growing economy,'' Pyone told a special forum on Asean-China FTA: Maximising The Benefits at the second day of the Malaysia-China Partnership Summit 2003 in Seri Kembangan, Selangor, yesterday.
He said trade between Asean and China had been growing at a steady pace despite the global economic slowdown.
Trade volume between Asean and China is likely to exceed US$50bil for the first time this year, reflecting the basis and potential for future cooperation,'' he said.
Pyone said with China being the world's biggest factory, Asean would have to be prepared to deal with the the influx of cheaper Chinese manufactured goods, adding that this would affect exports from the labour intensive garment industry, toys and sporting goods manufacturers, as well as high-tech fields such as information technology hardware, computers and electronic items.
As a result, he said, Asean's initial fears of certain exports losing out to China were valid.
However, he said, Chinese and Asean exports were more complementary than perceived, and not all were in direct competition since there were areas where Asean could work with China.
For example, Asean countries have an advantage over China with respect to their services sectors.
China, according to experts, is woefully lacking in a skilled services sector as it opens up to free trade and embraces capitalism,'' he said.
Other areas that Asean and China could cooperate in included trading, agriculture, automobile parts, biotech, timber, education, healthcare, research and development, information and communications technology and tourism, he added.
China National Committee for Pacific Economic Cooperation secretary-general Jiang Chengzong maintained his optimism about ACFTA.
He said there was strong political will on the part of leaderships in China and Asean to push ACFTA through.
He said the framework agreement signed in November 2002 laid the legal basis for a free trade area (FTA), as it set the objectives, measures and timetable for FTA, adding that Chinese and Malaysian entrepreneurs had also voiced their enthusiasm over FTA.
Did you find this article insightful?