Saturday, June 11, 2011

ASEAN-China SME Conference

At the ASEAN (Association of South East Asian Nations)-China SME (Small and Medium Size Enterprise) Conference held in Kuala Lumpur, ASEAN Deputy Secretary General Pushpanathan Sundram pointed out that trade between ASEAN and China has the tendency to gradually moving toward trade in services industries. He said that all ASEAN countries must make preparation to reap a share in this cross-border trade of trade in services industries.
Manpower Resource Development
Pushpanathan said that 2010, the volume of trade in services accounted for 46 percent in the total ASEAN-China trade. He expected the percentage of trade in services between ASEAN and China will continue to gradually increase every year.
Pushpanathan also pointed out that ASEAN and China are in the midst of discussing and negotiating on the drafting of a free trade agreement relating specifically to trade in services so that in the near future, both ASEAN and China can open up more trade in services in wider areas. This is especially so now that the middle class population in China is rapidly on the increase. The increasingly large group of consumers in China will cause the demand for trade in services to increase rather than decrease in the coming years.
He added that the trade ties between ASEAN and China is not only limited on product trading alone. Cooperation between ASEAN and China in manpower resource development, banking and finance, trade in services and building construction trade cooperation have also accounted for a very important ratio.
Pushpanathan said this today [ 8 June] when he presented his keynote address on 'How Private Enterprises Can Expand Their Trade Under the ASEAN-China Free Trade Agreement.'
He believed the private enterprises are the main driver of trade cooperation in the overall ASEAN-China trade cooperation development. However, he added that there is also a need for the private enterprises to build good human resource network to connect with one another before they carry out investment cooperation projects with one another.
'As long as the private enterprises have done their liaison and networking job well, they can indeed save up a lot of investment exploration and development cost.'
The organizer for this ASEAN-China SME Conference is Datuk Dr Rebecca Fatima, Secretary-General, Ministry of International Trade and Industry. Other main speakers for this Conference have included Indonesia's Deputy Minister of State for Cooperatives and Small and Medium Enterprises Hailu, Indonesia's Chamber of Commerce President Suryo Bambang Sulisto, Thailand's Deputy Permanent Secretary General of Ministry of Commerce Pimpapaan Chansilpa, and Laos' Vice Minister of Industry and Commerce Siaosavath Savengsuksa.
Implementation and Administration Policy
At this Conference, Indonesia's Chamber of Commerce President Suryo Bambang Sulisto remarked candidly that the role of the ASEAN-China Free Trade Agreement (ACFTA) has not yet been fully utilized. The ACFTA does not even have a clear implementation and administration policy.
He said there is a need for all the ASEAN countries to establish a uniform policy for the small and medium size enterprises; a uniform policy for business standards; some ad hoc support programs, education, and online networking system to match and cater the need of different kind of businesses. He added:
'Yet for sure, the ASEAN - China Free Trade Agreement is the common goal for all governments involved. The ACFTA will certainly be implemented. It is only during the early implementation stage of ACFTA that we are still facing some guessing and exploration difficulties.'
In his address, Suryo Bambang Sulisto praised the Chinese Government for having a strong political will to promote the development of small and medium size enterprises in China. In particular, he said China has made great effort to encourage the Chinese enterprises to explore new markets. He said China's example is worth the effort for ASEAN governments to emulate.
Economic and Trade Development
However, when Thailand's Deputy Permanent Secretary General of Ministry of Commerce Pimpapaan Chansilpa addressed the participants at the ASEAN-China SME Conference, Pimpapaan Chansilpa pointed out after ASEAN as a group, China is Thailand's second largest trading partner. Thailand believed that it was a necessary procedure for all ASEAN countries to continuously carry out trade promotion and networking work with China so that ASEAN can establish an excellent and stable economic and trade development pattern with China.
Pimpapaan Chansilpa disclosed that Thailand has established nine trade offices in China. In this year alone, Thailand has organized 53 trade promotion activities in China. As such, Thailand is able to maintain close and intimate trade cooperation ties with China.
'The bilateral trade contents between Thailand and China have, in addition to the production of computers, chemicals, rubber goods, also included tourism, financial and other trade in services industries.'
Free Trade Agreement
At the ASEAN-China SME Conference, Malaysian Deputy International Trade and Industry Minister Muhkriz Mahathir also admitted that very few Malaysian firms have benefited from the trade advantage provided under the ASEAN-China Free Trade Agreement. As such, he said that the Malaysian Government will have to carry out a series of publicity activities to let Malaysia's small and medium size enterprises to gain a better understanding of the trade opportunities that the ACFTA can bring to them. He said:
'The awareness of the existence of this ACFTA by Malaysia's small and medium size enterprises is very low. As such the Malaysian Government has the responsibility to let them know how they can benefit from the ACFTA.'
He stressed that this is a continual job that has to be carried out by the Government. Currently, many products have already enjoyed tariff-free advantage but many people and many SMEs in Malaysia still do not know about these trade benefits.
'90 percent of the businesses in China and in ASEAN countries are small and medium size enterprises. As such, the small and medium size enterprises do play a very important role in the ASEAN-China trade.'
In addition, Muhkriz Mahathir also commented that some small and medium size enterprises in Malaysia have said that it was difficult for them to find suitable trading partner when they wanted to involve in ASEAN-China trade. In this regard, he said the Malaysian Government will try to look into this problem so that in the future, the small and medium size enterprises in Malaysia can find more appropriate trading partners when doing businesses with China or another country.
When asked to comment on the potential business development areas under the ACFTA, Muhkriz said currently the fastest trade growing area is in the electrical and electronic fields. But there are still other potential trade development areas in ASEAN-China trade such as those in the services industries.
ASEAN-China SME Conference
Muhkriz Mahathir said this after the opening ceremony of the ASEAN-China SME Conference held in Kuala Lumpur.
Participants at the ASEAN-China SME Conference have included Chai Xi, Chinese Ambassador to Malaysia; Datuk Hafsah Hashim, Chief Executive Officer of the SME Corporation Malaysia; Datuk Mohamed Al Amin, Chairman of SME Corporation; Datuk Michael Yeoh, Chief Executive Officer of Asian Strategy and Leadership Institute, among others.

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