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China-ASEAN

In November 2001, China and the 10-member Association of South East Asia Nations (ASEAN) began negotiations to set up a free trade area.

One year later, a framework agreement for the planned FTA was signed. The FTA, a zero-tariff market of more than 1.7 billion people, has been targeted to come into force in 2010 for the six original ASEAN members (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) and in 2015 for the other four (Burma, Cambodia, Laos and Vietnam). Implementation of the framework agreement would occur in stages. For instance:

- An early harvest programme covering trade in goods came into force in July 2005.
- Negotiations on a dispute settlement mechanism were finalised in 2004 for implementation in 2005.
- Negotiations on trade in services were completed and an agreement signed in January 2007, for implementation in July 2007.
- The China-ASEAN investment agreement was to be signed at the ASEAN Summit in Thailand in December 2008.

Separately, China signed a bilateral FTA with ASEAN member Singapore in October 2008. Beijing has also been hammering out a lot of separate, smaller and more specific bilateral deals with ASEAN neighbours, such as the infamous Philippine-China investment agreements (the subject of huge corruption scandals in the Philippines in 2007), harmonised food safety standards with Thailand (to facilitate agricultural trade) and numerous arrangements with the Mekong Delta countries.

Politics around the China-ASEAN deal are delicate as ASEAN states want to avoid China’s domination and yet build their economies by interacting with China, especially given the slowdown in demand from the US and European markets. At the same time, China is moving up the manufacturing value-chain losing need for primary products that ASEAN states produce while its search for raw materials such as minerals and oil has rapidly gone global. Finally, the coming into force of full-scale zero-tariff farm trade with China from 2010 onward has raised many fears in the ASEAN world.

(Picture: Workers unions in Indonesia protest against the ASEAN-China FTA)

last update: May 2012


ASEAN and China to strive to end talks on upgraded FTA
Chinese commerce minister Gao Hucheng said that both China and ASEAN have agreed to strive to bring to an end their negotiation on an upgraded version of the China-ASEAN Free Trade Area (FTA) before the end of this year.
Indonesia raises non-tariff barrier to protect local batik against imports
Cheaper fabrics from Malaysia and China are flood in thanks to the ASEAN-China free-trade agreement.
China-ASEAN trade negotiations to be completed by year-end
Negotiations to upgrade the China-ASEAN Free Trade Agreement are expected to be concluded by the end of this year. China will expand two-way investment in major sectors involved in the Belt and Road Initiative, including big-ticket projects involving global production, industrial parks and other cross-border projects.
Thailand to lose share of China market under FTA, survey suggests
It is projected that ASEAN could face an annual trade deficit with China as high as US$30 billion within five years under the ASEAN-China Free Trade Agreement
China, ASEAN to accelerate upgraded FTA negotiations
China and the Association of Southeast Asian Nations will accelerate negotiations on upgrading the China-ASEAN Free Trade Area in 2015, a Chinese government official said on Thursday.
China, ASEAN to negotiate on FTA upgrade
China and the 10-member Association of Southeast Asian Nations (ASEAN) agreed Tuesday to negotiate on upgrading a free trade area (FTA) to ensure that it remained dynamic and commercially relevant.
China to negotiate upgraded FTA with ASEAN
China is ready to start talks with the Association of Southeast Asian Nations (ASEAN) over an upgrade of the China-ASEAN Free Trade Area (CAFTA) at an early date, said Chinese Vice Premier Wang Yang here on Friday.
Asean eyes free-trade pact with Hong Kong
ASEAN and Hong Kong plan to start discussing a free-trade deal by early next year in a move to promote trade and economic growth.
China keen to review and improve FTA with ASEAN: PM Lee
Singapore Prime Minister Lee Hsien Loong, who is in China for a one-week visit, has said that China is keen to review and improve its Free Trade Agreement with ASEAN and that Singapore will do its part in this development.
In unprecedented move Asean iron and steel associations seek review of FTA with China
Six regional iron and steel associations have joined forces seeking for a review in the Asean-China Free Trade Agreement following the dramatic influx of steel products from China into Asean over the past three years, said Asean Iron and Steel Council president Chow Chong Long.