1. ASEAN – CHINA the New Economic Partnership Mr. Zhou Hongli Minister Counsellor Embassy of People ’ s Republic of China February 18, 2004

2. Main Topics: Economic cooperation between China and ASEAN Economic cooperation between China and ASEAN ASEAN-China Free Trade Area (ACFTA) ASEAN-China Free Trade Area (ACFTA) China ASEAN Expo China ASEAN Expo

4. China and ASEAN: Close Neighbors China ’ s foreign policy: China ’ s foreign policy: 1. To build friendly relationship and partnership 1. To build friendly relationship and partnership with neighbors ( 与邻为善, 以邻为伴 ); with neighbors ( 与邻为善, 以邻为伴 ); 2. To build amicable, tranquil and prosperous 2. To build amicable, tranquil and prosperous neighborhood ( 睦邻，安邻，富邻） neighborhood ( 睦邻，安邻，富邻） Friendly & co-operative relations serves the fundamental interests of our peoples and the stability and development of the region. Friendly & co-operative relations serves the fundamental interests of our peoples and the stability and development of the region.

5. China-ASEAN Comprehensive Economic Cooperation Bilateral Trade: ASEAN remains China ’ s the 5 th largest trading partner in the past 10 years. Bilateral Trade: ASEAN remains China ’ s the 5 th largest trading partner in the past 10 years. Two-way investments, and contracting projects and labor service have increased tremendously. Two-way investments, and contracting projects and labor service have increased tremendously. Close cooperation in international and regional economic arena: WTO, APEC, ASEM, ASEAN+3, ASEAN-China FTA, etc. Close cooperation in international and regional economic arena: WTO, APEC, ASEM, ASEAN+3, ASEAN-China FTA, etc.

6. Characters of Bilateral Trade Grew fast: 20% annual increase since 1990; Grew fast: 20% annual increase since 1990; Share in China ’ s total trade rose: from 5.9% in 1990 to 9.2% in 2003; Share in China ’ s total trade rose: from 5.9% in 1990 to 9.2% in 2003; Trade balance: in favor of ASEAN countries (US$16.4 billion in 2003) Trade balance: in favor of ASEAN countries (US$16.4 billion in 2003) China ’ s largest trading partner in ASEAN: Malaysia overtook Singapore since 2002. China ’ s largest trading partner in ASEAN: Malaysia overtook Singapore since 2002.

7. Fast Trade Growth b/n China and ASEAN

8. Trade with ASEAN Members in 2003 (in million US dollars)

9. Malaysia has the Largest Shares

10. Trade Target China and ASEAN leaders agreed: the trade between China and ASEAN shall reach US$100 billion in 2005. China and ASEAN leaders agreed: the trade between China and ASEAN shall reach US$100 billion in 2005. Achievable: need only 13% annual growth in the next two years. Achievable: need only 13% annual growth in the next two years.

11. ASEAN Total Investment to China (by the end of 2003) Total projects: 22075 Total projects: 22075 Share in China ’ s total: 4.75% Share in China ’ s total: 4.75% Total contractual amount: US$64.59 billion Total contractual amount: US$64.59 billion Share: 6.84% Share: 6.84% Total paid-up investment: US$32.37 billion Total paid-up investment: US$32.37 billion Share: 6.46% Share: 6.46%

12. Singapore is the Largest ASEAN Investor in China

13. Total Chinese Investment in ASEAN ( by the end of 2003,in million US$)

14. Shares of Chinese Investment in ASEAN against in Asia and the World Share in AsiaShare in the world

15. Process of Establishing ACFTA At the 4th ASEAN+China (10+1) Summit in Singapore in November 2000, leaders of ASEAN and China agreed to explore the possibility of establishing a free trade area (FTA). At the 4th ASEAN+China (10+1) Summit in Singapore in November 2000, leaders of ASEAN and China agreed to explore the possibility of establishing a free trade area (FTA). The ASEAN and China Expert Group on Economic and Cooperation was formed to study the feasibility of FTA. The ASEAN and China Expert Group on Economic and Cooperation was formed to study the feasibility of FTA.

16. Process of Establishing ACFTA At 5th ASEAN+China Summit in Brunei in November 2001, leaders endorsed the proposal made by the Expert Group for a Framework on Economic Cooperation and to establish an ASEAN-China Free Trade Area within 10 years. At 5th ASEAN+China Summit in Brunei in November 2001, leaders endorsed the proposal made by the Expert Group for a Framework on Economic Cooperation and to establish an ASEAN-China Free Trade Area within 10 years. Trade Negotiation Committee was formed to negotiate tariff reduction or elimination. Trade Negotiation Committee was formed to negotiate tariff reduction or elimination.

17. Process of Establishing ACFTA At 6th ASEAN+China Summit in Cambodia in November 2002, leaders singed “ Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China ”. At 6th ASEAN+China Summit in Cambodia in November 2002, leaders singed “ Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China ”. The Agreement is the groundwork for establishment of ACFTA by 2010 for the 6 older ASEAN members and 2015 for 4 newer members. The Agreement is the groundwork for establishment of ACFTA by 2010 for the 6 older ASEAN members and 2015 for 4 newer members.

18. Process of Establishing ACFTA At 7th ASEAN+China Summit in Indonesia in October 2003, leaders signed Protocol to Amend the Framework Agreement. At 7th ASEAN+China Summit in Indonesia in October 2003, leaders signed Protocol to Amend the Framework Agreement. to concrete certain issues, especially “ Early Harvest Programme ”, which already started on January 1 2004, and “ Rules of Origin ” to concrete certain issues, especially “ Early Harvest Programme ”, which already started on January 1 2004, and “ Rules of Origin ”

19. What to happen in 2004 ASEAN and China agreed negotiations for the trade in goods component of the FTA will be concluded by 30 June 2004 ASEAN and China agreed negotiations for the trade in goods component of the FTA will be concluded by 30 June 2004

20. Significance of ACFTA Third largest FTA in terms of economy and trade, next to NAFTA and EU. Third largest FTA in terms of economy and trade, next to NAFTA and EU. The Largest FTA in terms of population: The Largest FTA in terms of population: 1.7 billion of population US$2000 billion of GDP US$ 1200 billion of trade Unlike NAFTA and EU, ACFTA is dominated by developing countries. Unlike NAFTA and EU, ACFTA is dominated by developing countries.

21. ACFTA Tariff Reduction Products in the Normal Track: Products in the Normal Track: tariff rates to be gradually reduced or eliminated over a period from 1 January 2005 to 2010 for ASEAN 6 and China, and from 1 January 2005 to 2015 for ASEAN 4; Products listed in the Sensitive Track: Products listed in the Sensitive Track: tariff rates to be reduced in accordance with the mutually agreed end rates and end dates.

22. Early Harvest Programme Tariff reduction commenced from January 1 2004, 0% tariff rates by 2006. It covers more 500 products, mostly agricultural products listed in the first 8 Chapters of HS Code.

23. Rules of origin At least 40% of contents from ACFTA Trade in service For services and investment, negotiations commenced in 2003 and would be concluded as expeditiously as possible.

24. ACFTA also Covers Cooperation in Other Areas Cooperation in 5 priority sectors, namely: Cooperation in 5 priority sectors, namely: (a) agriculture; (b) information and communications technology; (c) human resources development; (d) investment; and (e) Mekong River basin development.

25. And other areas: banking, finance, tourism, industrial cooperation, transport, telecommunications, intellectual property rights, small and medium enterprises (SMEs), environment, bio-technology, fishery, forestry and forestry products, mining, energy and sub-regional development. And other areas: banking, finance, tourism, industrial cooperation, transport, telecommunications, intellectual property rights, small and medium enterprises (SMEs), environment, bio-technology, fishery, forestry and forestry products, mining, energy and sub-regional development.

26. Other Measures Relating to Trade Elimination non-tariff barriers; Elimination non-tariff barriers; Progressive liberalisation of trade in services with substantial sectoral coverage; Progressive liberalisation of trade in services with substantial sectoral coverage; Establishment of effective trade facilitation measures, including, but not limited to, simplification of customs procedures and development of mutual recognition arrangements; Establishment of effective trade facilitation measures, including, but not limited to, simplification of customs procedures and development of mutual recognition arrangements;

27. Welcome to CHINA-ASEAN EXPO At the 7th ASEAN+China(10+1) Summit Meeting, on October 8 2003, Chinese Premier Wen Jiabao suggested that a China – ASEAN Expo be held yearly, starting from 2004, in Nanning, China to promote mutual commercial cooperation. At the 7th ASEAN+China(10+1) Summit Meeting, on October 8 2003, Chinese Premier Wen Jiabao suggested that a China – ASEAN Expo be held yearly, starting from 2004, in Nanning, China to promote mutual commercial cooperation. Chinese Premier ’ s proposal was welcomed by ASEAN leaders and was later written into the Chairman's Statement of the Summit Chinese Premier ’ s proposal was welcomed by ASEAN leaders and was later written into the Chairman's Statement of the Summit

28. Purpose of CHINA-ASEAN EXPO To promote the construction of China-ASEAN Free Trade Area (CAFTA), sharing opportunities of cooperation and development. To promote the construction of China-ASEAN Free Trade Area (CAFTA), sharing opportunities of cooperation and development.

29. TIME AND VENUE Every November, starting from 2004, in Guangxi, China Every November, starting from 2004, in Guangxi, China This year: November 3-6, 2004, at Nanning International Convention and Exhibition Center. This year: November 3-6, 2004, at Nanning International Convention and Exhibition Center.

30. SPONSORS AND ORGANIZERS: Sponsors: Ministry of Commerce of China Ministries of Trade or Commerce of ASEAN Members Sponsors: Ministry of Commerce of China Ministries of Trade or Commerce of ASEAN Members Organizer: Government of Guangxi Zhuang Autonomous Region, China Organizer: Government of Guangxi Zhuang Autonomous Region, China

31. SCALE OF THE EXPO: Accommodates 2,000 international standard exhibition booths, Accommodates 2,000 international standard exhibition booths, 200 non-standard booths 200 non-standard booths An outdoor exhibition area of 26,000 square meters. An outdoor exhibition area of 26,000 square meters. It is estimated to receive some 20,000 businessmen worldwide. It is estimated to receive some 20,000 businessmen worldwide.

32. ACTIVITIES Trade in goods: to promote trade among ACFTA members; Trade in goods: to promote trade among ACFTA members; Talks on investment: to enlarge two-way investment in ACFTA, introducing investment environment, releasing investment information; Talks on investment: to enlarge two-way investment in ACFTA, introducing investment environment, releasing investment information; Trade in services and other areas of cooperation: to promote the flow of capital, information, talents, enhance the cooperation in tourism, telecommunication, logistics, finance, project contracting and other areas; Trade in services and other areas of cooperation: to promote the flow of capital, information, talents, enhance the cooperation in tourism, telecommunication, logistics, finance, project contracting and other areas;

33. ACTIVITIES Theme seminars: on hot topics of CAFTA construction, which invite the attendances of government officials, experts, researchers, and entrepreneurs Theme seminars: on hot topics of CAFTA construction, which invite the attendances of government officials, experts, researchers, and entrepreneurs Culture exchange: showing the splendid culture of all nations that would further promote mutual understanding and friendship Culture exchange: showing the splendid culture of all nations that would further promote mutual understanding and friendship

34. For Participation and More Information 1. IE Singapore Mr. Lim Kay Siong Tel: 64334477 Fax: 62387560 2. Guangxi Economic and Trade Commission Mr. Nong Rong or Ms. Huang Yuan Tel: (86771)-2109510 or 2109509 Fax: (86771)-2109835 or 2109266 Email: caexpo@caexpo.org Website: www.caexpo.org