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| China-ASEAN Free Trade Area opportunities and challenges |
| Suita Filter Media 2010-01-30 13:35:00 Author:filter fabric ผ้า กรอง Source: Font size:[Large][Middle][Small] |
On January 1, China and the Association of Southeast Asian Nations (ASEAN) kicked off their free trade area (FTA). The world's largest FTA covers a population of 1.9 billion and involves about 4.5 trillion U.S. dollars of trade volume.
The average tariff on goods from ASEAN countries to China is cut down to 0.1% from 9.8%. The six original ASEAN members, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, will slash the average tariff on Chinese goods from 12.8 percent to 0.6 percent. By 2015, the policy of zero-tariff rate for 90 percent of traded goods is expected to extend between China and the four new ASEAN members, Cambodia, Laos, Myanmar and Vietnam.
·FACTBOX: China-ASEAN Free Trade Area
·Backgrounder: China-ASEAN Free Trade Area
·Backgrounder: Development of China-ASEAN trade relations
Thailand makes special efforts advancing China-ASEAN FTA
The Thai government has made special efforts to advance the operation of the China-Association of Southeast Asian Nations Free Trade Area, said Bhanthumnavin. Meanwhile, the governmemt has always been welcoming people seeking investment chances in the country. Full story>>
China-ASEAN FTA beneficial to all: Thai diplomat
China-ASEAN FTA is beneficial to all from a theoretical point of view as it enlarges market for both, said Bhanthumnavin. After the operation of the FTA, the ASEAN countries can easily reach the "vast Chinese market" while "China also has access to a vast market of 550 million people."Full story>>
Interview Excerpts
Thailand chaired the Association of the Southeast Asian Nations last year, so what special efforts have you made to advance the operation of the China-ASEAN FTA?
As chair, we promoted ASEAN people's understanding of what ASEAN is there for them and how ASEAN as an institution (can) improve their life, including the China-ASEAN FTA.
One concrete achievement that Thailand is very proud of is that the agreement on investment, which is part of the three pillars (the political, economic and socio-cultural pillars) of FTA, i.e., agreement on goods, investment and services.
The FTA covers a population of 1.9 billion, so what concrete benefits will the ordinary people in the ASEAN member countries receive?
The first concrete benefit is the enlarged market, not only the domestic market but also the vast Chinese market. Vice versa, China also has access to a vast market, which has a 550 million population. The consumers could consume goods at zero-tariff and also (have) free movement of capital for investment, setting up businesses and services. (The FTA can also) improve the quality of life and choices of consumers.
Thailand has become one of the most popular tourist destinations for Chinese. How will Thailand take the opportunity to promote its tourism industry? Will there be any preferential measures towards Chinese tourists?
Thailand always welcomes tourists form all around the world. Among ASEAAN nations it is visa free to travel among ASEAN member countries. For Chinese tourists, since last year the Thai government has been giving free visa to Chinese tourists, and it has been extended to the end of March. This is the first and most obvious promotion for Chinese tourists in particular.
Some Chinese want to do business in Thailand following the operation of the FTA. Can you give them some advice?
The Thai government has an organization called the Board of Investment of Thailand (BOI), which looks after specifically the investment promotion in Thailand and it will be one-stop service for foreign investors interested in coming into Thailand. The BOI also has an office in Beijing. We would be pleased to welcome people seeking investment in Thailand. And there are incentive schemes that the BOI has currently in place.
As the 2nd largest economy in Southeast Asia and an export-oriented one as well, how will Thailand make use of the new FTA to drive its own economic development? Will there be more economic cooperation between Thailand and other Southeast Asian countries?
FTA goes both ways, beneficial for all members. ASEAN member countries share similar industries and similar kind of production. Now with the globalized world every county belongs to the supply chain. The import of the parts to be produced into final goods will become cheaper. So Thailand is looking into that.
To what extent do you think that the China-ASEAN FTA can help China and ASEAN rise from the current financial crisis?
I believe economists and analysts see what they call decoupling between Asia and other major developed economies. Because previously there was this perception that the crisis was caused by global economic imbalance - Asia export a lot to the developed economy. But after the crisis, especially during 2009, we see huge rise in domestic consumption in Asia. So this FTA is to create opportunities for consumption in Asia.
How this FTA helps promote the consumptions in the Asian countries?
Cheaper goods, together with government stimulus measures. The government sector and the consumer sector together are spending more generally. The production of goods, which requires a lot of intermediate goods, the cost would be lower. So it reflexes in the final prices.
Most of the key existing FTAs are dominated by developed countries, such as the North America FTA and the European Union. So how will this one influence the economic system of the world as a whole? How will it contribute to the global economy?
That's a question that I believe many economists include myself are waiting to see. Economist hope that the emergence of FTA will actually encourage people to come together and see the benefit of FTAs, and try to distribute the concept of free trade to a global leve
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