China seeks closer trade ties with Asean

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Bloomberg
Published: August 15, 2009, 22:30

Beijing: China wants to boost cooperation with members of the Association of Southeast Asian Nations to develop trade and increase investment, said Chinese Commerce Minister Chen Deming.

China and the regional grouping are deepening ties as the global economic recession weighs on trade, Chen said at an Asean economic ministers meeting in Bangkok.

They signed an agreement Friday in Bangkok that may boost two-way investment as much as 60 per cent during the next two years, Thailand's Commerce Minister Porntiva Nakasai told reporters. The agreement gives the signatories "most-favoured nation" status for investments, according to a statement by China's Commerce Ministry on its website. Chen spoke before the signing.

"This is a recognition that regional countries will represent an increasing share of the global economy," said David Cohen, an economist at Action Economics in Singapore. "It makes sense that nations explore investment opportunities and support expansion in investment flows."

China said in April it plans to create a $10 billion (Dh36.7 billion) investment fund and offer $15 billion in credit to southeast Asian countries, extending its influence as the region attempts to weather the global financial crisis.

The agreement sends an "important signal" that China and Asean are willing to work together to promote free trade and investment and oppose protectionism, the statement by China's Commerce Ministry said. Trade between China and the regional grouping fell 24 percent to $88 billion in the first half of the year, Chen said.

China is the eighth-largest investor in Asean, with accumulated investments of $6.1 billion as of 2008, the regional grouping said in a statement. Asean has invested a total of about $5.6 billion in China as of last year, the statement added.

China companies may seek investments in the steel and agriculture industries within Southeast Asia, while Asean nations may invest in Chinese financial and retail companies, Chaiya Yimvilai, a spokesman for the Asean meeting, said.

Asean has said it wants the region to become a European Union-style econ-omic community, without a common currency, by 2015. Indonesia, Thailand, Malaysia, Singapore, Brunei, the Philippines, Cambodia, Laos, Myanmar and Vietnam make up the regional organisation. Asean last week signed a free trade agreement with India, pledging to reduce tariffs for about 80 per cent of goods between 2013 and 2016.