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This year marks the 20th anniversary of SinoASEAN dialogue relations. Since January, there have been a series of activities commemorating the anniversary, cumulating in the China-ASEAN Summit in Bali, Indonesia on November 18.
As a major country outside the region, China was the first to accede to the Treaty of Amity and Cooperation in Southeast Asia, the first to forge a strategic partnership for peace and prosperity with ASEAN and the first to seek a free trade area with ASEAN.
China also took the lead in promising to sign the protocol of the Treaty on the Southeast Asia Nuclear-Weapon-Free Zone, which obligates the five nuclear-weapon states—China, the United States, Russia, Britain and France—not to use or threaten to use nuclear weapons against treaty signatories. In addition, China and ASEAN have cooperated to cope with nontraditional security threats.
The relationship between China and ASEAN is no doubt the most pragmatic and fruitful one among ASEAN’s dialogue relations with other countries. Economic and trade cooperation has been a driving force behind their thriving ties.
Great strides
In the past 20 years, trade between China and ASEAN has developed rapidly with an average increase of more than 20 percent annually. This year, it has continued the robust growth. The trade volume reached $295.9 billion in the first 10 months of 2011. The total volume of the whole year is expected to surpass $350 billion, more than 40 times the volume of 1991. China has become the largest trade partner of ASEAN, while ASEAN is China’s third largest trade partner. In 2010, trade with ASEAN members accounted for 9.8 percent of China’s total foreign trade.
Trade structure has also been optimized. In recent years, Sino-ASEAN trade has shifted from primary products to manufactured goods while hi-tech products play a more important role. In 2010, the trade volume of machinery, electronic products and hi-tech products surpassed $110 billion, accounting for one third of the total volume.
Investment between China and ASEAN has expanded continually in recent decades. ASEAN is not only an important source of China’s foreign investment but also one of the most favored destinations of Chinese outbound investment. At the proposal of China, the China-ASEAN Fund on Investment Cooperation and the China-ASEAN InterBank Association have been established as major platforms for investment and financing cooperation. In 2010, the direct investment of China in ASEAN countries reached $2.57 billion, surpassing its direct investment in the EU that year.
China now is the largest foreign investor in Myanmar, Cambodia and Laos, and a prominent foreign investor in Thailand, Indonesia, Malaysia, Singapore, the Philippines and Brunei. To continue to expand investment in ASEAN countries, China has promised to build an economic and trade cooperation area in each ASEAN country. It will also speed up technology transfer to ASEAN countries to help make their industries more competitive.
The China-ASEAN Free Trade Area(CAFTA) was officially established on January 1, 2010. It is the most important achievement of economic and trade cooperation in the region. CAFTA is one of the largest free trade areas worldwide with a population of 1.9 billion, a combined GDP of $6 trillion, a total foreign trade volume of $4.5 trillion and $4 trillion in foreign exchange reserves. It has contributed greatly to Sino-ASEAN trade ties and regional economic integration. This year, the two sides inaugurated the China-ASEAN Center, which aims to enlarge trade and investment within the framework of CAFTA while boosting cooperation between small and medium-sized enterprises as well as cultural exchanges.
China has provided various kinds of aid to ASEAN over the past two decades. For instance, it has sponsored more than 400 infrastructure and public welfare projects in ASEAN countries and trained more than 9,000 professionals in fields such as economics, finance, agriculture, information technology and media.
New opportunities
At the 17th ASEAN Summit in 2010, ASEAN leaders adopted the Master Plan on ASEAN Connectivity as part of their efforts to promote the establishment of an ASEAN Community by 2015. The implementation of the master plan has become a priority for ASEAN countries because it will help ensure ASEAN plays a leading role in regional economic cooperation while enhancing its unity and growth potential. Therefore, ASEAN leaders reaffirmed their commitment to the plan at their 18th summit this May.
Connectivity between China and ASEAN refers not only to the construction of infrastructure and transportation projects but also to greater market access, cooperation between industrial sectors and cultural exchanges. In April, when meeting with ASEAN Secretary General Surin Pitsuwan in Jakarta, Indonesia, Chinese Premier Wen Jiabao said China is willing to work together with ASEAN to promote cooperation across the board with a focus on connectivity.
At the summit commemorating the 20th anniversary of Sino-ASEAN dialogue relations in November, Premier Wen announced another $10 billion in loans to ASEAN countries in addition to the $15 billion promised in 2009, of which $4 billion are preferential loans. The loans are designed to finance infrastructure projects in ASEAN countries to help improve their connectivity.
Green development will also inject impetus to cooperation between China and ASEAN. Li Ganjie, Chinese Vice Minister of Environmental Protection, said China and ASEAN countries face many common challenges in development and environmental protection. Striking a balance between economic growth and environmental protection has always been high on the agenda of the Sino-ASEAN dialogue and cooperation.
ASEAN Deputy Secretary General Dato’ Misran Karmain said ASEAN should switch to a sustainable development model. He said ASEAN countries have damaged the environment while pursuing industrial development in the past. They have now realized the danger of environmental degradation and hope to strengthen cooperation with China in environmental protection.
At the recent China-ASEAN Summit, Premier Wen said China is ready to promote cooperation in the green economy, energy conservation and renewable energy with ASEAN countries.
Environmental protection has become an indispensable area of Sino-ASEAN cooperation. China and ASEAN countries have held in-depth discussions on biodiversity, climate change and cooperation in the Greater Mekong Sub-region. They also launched the China-ASEAN Center of Environmental Protection Cooperation in May.
Environmental protection cooperation presents great business opportunities. China plans to invest 2 trillion yuan ($315 billion) in developing the green economy from 2011 to 2015. The burgeoning environmental protection industry is poised to create opportunities for entrepreneurs in China and ASEAN countries.
Today, developed countries are struggling to recover from the global financial crisis, with many still mired in debt crises. The world’s economic and financial situations are not optimistic. Furthermore, increasing global food, energy and environmental problems are threatening sustainable development. Uncertainties and instabilities are likely to haunt the world economy for a long time to come. The harsh external environment has posed a grave challenge for East Asia. Against this backdrop, promoting regional cooperation to achieve collaborative development has become a common aspiration of all countries in the region.
China is now in a crucial period of development as it focuses on implementing its 12th Five-Year Plan (2011-15), promoting economic restructuring and improving people’s livelihoods. ASEAN countries are working for the establishment of an economic community while bolstering their overall competitiveness. In this context, strengthening Sino-ASEAN strategic communication and all-round cooperation has become a consensus of leaders across the region.