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Asia/FTA brings hope to poorest region

Asahi Shimbun, Japan

Asia/FTA brings hope to poorest region


20 August 2005

NANNING, China-Left behind for years while China’s economy was taking off, the Guangxi Zhuangzu autonomous region is finally showing signs of life thanks to Beijing’s free trade agreement with the Association of Southeast Asian Nations (ASEAN) in 2002.

The government of Guangxi Zhuangzu has devised a strategy based on the FTA by taking advantage of its geographical location-along the coast of the Gulf of Tongking and on the border with Vietnam.

The FTA involves not only agricultural products in eight areas but also tariff reductions in other fields.

The local government is now creating a transportation network that will connect the two markets of China and ASEAN.

In Nanning, the capital of the autonomous region, a highway to Youyiguan, a checkpoint at the Vietnamese border, will open in October.

Another expressway now under construction will connect Nanning with Guangzhou, a major city in southern China, in 2006. This highway will serve as the main transportation artery linking southern China with ASEAN countries.

The Guangxi Zhuangzu government in August 2004 set up a 1.8 million-square-meter special economic zone to encourage investment from ASEAN members.

So far, 47 companies, many of them operated by overseas Chinese, have signed contracts to set up factories in the zone. The total value of the contracts is about 2 billion yuan (about 26 billion yen). Some of the companies have already started operations there.

Wei Zhipeng, a senior official in charge of the economic zone, said businesses operating in the economic zone are given favorable treatment offered to companies in autonomous regions or remote areas.

The per-capita gross domestic product in the Guangxi Zhuangzu autonomous region is the lowest among all coastal Chinese provinces and autonomous regions.

In 2004, however, the GDP figure increased by 11.8 percent from the previous year, the highest growth rate recorded since 1995.

The total trade value between the autonomous region and foreign countries in 2004 was $4.288 billion, up 34 percent from the previous year.

Nanning is gradually growing into a center of international business negotiations. The city will host the China-ASEAN Expo in October for the second straight year. The exposition will feature machinery equipment, household electronic appliances, Internet-related products and cars.

Other cities in the province are also gaining economically from the FTA.

Fangcheng Port, about 170 kilometers south of Nanning, has become a hub for exporting raw materials.

Dongxing city, west of the port, is also expected to play an important role for international trade because it is just 100 meters across the river from Vietnam.

The city also has a small port, which features a signboard that reads, "A key port for trade with ASEAN."

At this port, one person can import daily necessities up to 3,000 yuan (about 39,000 yen) a day without paying taxes. Because of the tax break, a steady stream of small boats imports boxes of soft drinks from Vietnam every day.

New houses and buildings owned by those who have profited from the border trade have recently popped up in the city.(IHT/Asahi: August 20,2005)