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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


New free trade zone to benefit China
If they dominate the 1.9 billion-population China-ASEAN FTA, Chinese companies could build a platform from which to attack European and North American markets.
Free trade and the role of financial globalization
The debate on the ASEAN-China FTA has somehow ignored the importance of financial globalization.
ACFTA worsens unemployment: INDEF
Around 1 million Indonesians might lose their job because of ASEAN-China Free Trade Agreement
Jakarta bracing for Thursday’s massive rallies
According to rally organisers, the people are not satisfied with the present government, particularly with regard to issues such as the implementation of the Free Trade Agreement (FTA) between Indonesia and China which they said would harm the interest of the people.
Free trade threatens national resilience
Implementation of the Asean-China Free Trade Agreement (ACFTA) will pose a serious threat to the national economic foundation and resilience.
Thousands rally against free trade treaty in Surabaya, Semarang
Thousands of Indonesian workers took to the streets in Surabaya, East Java, and Semarang, Central Java, on Thursday to protest the implementation of the ASEAN-China Free Trade Agreement
Mari Rebuffs Free Trade Agreement Criticism
Indonesian Trade Minister Mari Elka Pangestu on Monday dismissed criticism that she had been slow to respond to concerns about the Asean-China Free Trade Agreement, insisting the ministry has been engaged in “informal communications” about the deal with Asean.
Traditional market is not yet ready for free-trade era
"ASEAN-China free trade is an inhuman and immoral trade," says Hasan Basri, head of the Jakarta chapter of Indonesia’s traditional market traders association
The China-Asean free trade area: Propaganda and reality
The propaganda mills, especially in Beijing, have been trumpeting the FTA as bringing “mutual benefits” to China and Asean. The reality, however, is that most of the advantages will probably flow to China, writes Walden Bello.
China-ASEAN FTA to boost Malaysian palm oil export
The full implementation of the China-ASEAN Free Trade Area (FTA) is expected to boost the export of Malaysia’s palm oil industry, especially to China