Saturday, April 16, 2011

Achievements of CAFTA

After 10 years of relentless efforts, the China-ASEAN Free Trade Area (CAFTA) was finally established on 1 January 2010. CAFTA is not only the very first free trade area established by China with other countries, but also the largest free trade area in the world. The establishment of the CAFTA marks the beginning of a zero-tariff era for a region formed by China and the 10 ASEAN member states, with a total Gross Domestic Product (GDP) of approximately $6,000 billion and a total trade value of $4,500 billion.

As is well known, all strong countries will tend to become hegemonic. The development of China has certainly triggered fear and worries of some countries and this may affect the development in China and ASEAN. In fact, these worries are unnecessary. China has always practiced a good neighbor diplomatic policy while ASEAN has always been a good neighbor, good friend and good partner of China. Over the years, China and ASEAN have continuously deepened and expanded their cooperation in politics, economy, social culture, and other areas. They have been supporting each other and collaborating closely with each other in international affairs.

China wishes to strengthen its friendly cooperation with ASEAN member states to realize common development and prosperity and to expand the communications and cooperation in international and regional affairs. China is in support of the integration of ASEAN member states and supports ASEAN to continue its dominant role in the development of the East Asian cooperation. China is willing to promote the East Asian cooperation proactively. In the issue of South China Sea, China is willing to set aside dispute for joint development to make the South China Sea a "sea of friendship and cooperation" between China and ASEAN. China will also fulfill its pledge on peaceful emergence through mutual benefiting cooperation.

National Security

ASEAN is a neighbor of China. Strategically, ASEAN is a region related to China's national security. For ASEAN, China is another option in addition to Europe, the United States and Japan. China and ASEAN currently have extensive cooperation in many areas and dimensions. It is a successful relationship between neighboring countries. China and ASEAN will continue to expand and deepen their cooperation as they develop increasingly closer ties. China and ASEAN have had effective cooperation on matters such as anti-narcotics trafficking, counter terrorism, safety at sea, combating against smuggling and cross border crimes, preventing diseases from spreading and environmental protection.

Following the establishment of the CAFTA, China and ASEAN have opened up their service, trade and investment markets. The economic and trade cooperation between China and ASEAN has entered into a brand new stage of development. One of the objectives of the CAFTA is to create a new industry chain by opening up the markets to each other in order to improve the capability of the CAFTA and enhance the competitiveness of major CAFTA products in the international market. This requires timely coordination and reasonable division of work between both sides based on the ever developing and changing situation, so that the goal of achieving mutual benefiting and win-win results could be realized.

China's Trade and Investment in ASEAN

Since the implementation of the CAFTA in 2010, from January to July 2010, China's trade with ASEAN soared 49.6 percent to $161 billion. Out of this total, China's exports and imports with ASEAN rose 43.2 percent and 56.1 percent to $76.73 billion and $84.27 billion respectively.

China's investment in ASEAN has also increased rapidly. In the first half of this year, China's new non-financial direct investment in ASEAN soared 125.7 percent to $1.22 billion. The 10 ASEAN countries have become the destinations of Chinese tourists. Both China and ASEAN have become each others' major source countries of tourists. The year of 2005 recorded 6,594,200 mutual visits between China and ASEAN. The figures soared after the establishment of the CAFTA. There will be more than 10 million mutual visits between China and ASEAN and this will make a substantial contribution to the promotion of bilateral economic and cultural exchanges.

Advantages and Disadvantages

The ASEAN Plus Three youth exchange program has been launched in China. China has trained more than 6,000 professional talents for ASEAN countries. China and ASEAN help each other train professional talents and work together to promote technological exchanges and sharing among East Asian countries. There is a tremendous space for educational and cultural exchanges between China and ASEAN. China will further its cooperation with ASEAN countries in mutual recognition of academic qualifications and expanding bilateral student exchange by increasing the numbers of students studying overseas.

All in all, we see numerous advantages and no disadvantages in the establishment of the CAFTA. As long as all countries abide by their pledges and act in accordance with the agreement on dispute resolution mechanisms between China and ASEAN, both China and ASEAN will see a rapid economic development and realization of the goal of joint development. This will be a new chapter of excellence in the history of East Asia.

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