Chinese companies should look for more cooperation opportunities with the Association of Southeast Asian Nations (ASEAN) to realize the full advantages of the free trade agreement between the two, government officials said on Monday. Chinese companies should look for more cooperation opportunities with the Association of Southeast Asian Nations (ASEAN) to realize the full advantages of the free trade agreement between the two, government officials said on Monday.

"The government will actively encourage companies planning overseas ventures to invest in ASEAN countries," said Vice-Commerce Minister Gao Hucheng.

ASEAN countries' investment in China is far higher than the nation's investment in these countries over the past 30 years, Gao said.

The cumulative two-way investment between the two regions stood at $69.4 billion by the end of last month. Of this, ASEAN investment in China was around $59.8 billion, while China's non-financial investment in ASEAN was $9.6 billion,

During the first six months of the year, ASEAN's investment in China was $3.1 billion and China's non-financial investment in ASEAN was $1.2 billion, according to data from the Ministry of Commerce.

"China's investment in ASEAN countries has been growing especially in sectors like infrastructure, telecommunications, electric power, labor cooperation and contracting services," Gao said.

Lower labor costs and abundant natural resources in the ASEAN countries are attractive reasons for Chinese companies to consider investments, said Xu Xiaoning, executive secretary-general of the China-ASEAN Business Council.

Xu said Chinese companies who are already present in these countries could seek more opportunities by taking advantage of the free trade agreement.

Domestic companies can look for opportunities in emerging markets like Indonesia, as it now has stable policies for Chinese migrants, said Xu.

Bilateral trade between China and ASEAN rose to $136.5 billion in the first half of the year, up 55 percent year on year. It is also 11 percentage points higher than the growth rate of the nation's overall imports and exports during the same period. That puts ASEAN on track to be China's No 4 trading partner, after the European Union, the United States and Japan.

Stimulus policies aimed to boost economic growth, especially the steps taken to expand domestic demands, have created more business opportunities for ASEAN countries, Gao said.

The China-ASEAN Free Trade Agreement, the world's largest free trade area, officially came into effect on Jan 1 this year. The average tariff on goods from ASEAN countries was cut to 0.1 percent from 9.8 percent.

The six original ASEAN members, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, cut the average tariff on Chinese goods from 12.8 percent to 0.6 percent.

At the same time, the free trade area has also caused some worries in ASEAN countries, as some textile, shoe making, and steel companies are worried that Chinese goods will impact them.

"China and the ASEAN countries should advance their industrial cooperation and help ASEAN companies' enter the Chinese market in a big way so as to have a win-win situation for both regions," said Zhang Wei, vice-chairman of the China Council for Promotion of International Trade.

Zhang said the seventh China-ASEAN Business and Investment Summit in October would focus on the prospects and challenges for the regional economy and trade cooperation after the establishment of the free trade area.
POST: 2024-11-25