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Work Begins on ASEAN-China Free Trade Zone

A study has begun into the possibility of establishing a mega ASEAN-China free trade zone, covering 1.7 billion people, Singapore Prime Minister Goh Chok Tong said.

Similar investigations were also under way with Japan and South Korea which join China under an ASEAN plus three umbrella.

"If East Asia gets its politics right it will regain its former dynamism," Goh told high-powered central bankers at a dinner Sunday night opening the 2001 International Monetary Conference.

"A study is under way on the feasibility of an ASEAN-China free trade area. Also under study is how East Asia could gradually evolve into an East Asia community," he said.

China was seen as offering both challenges and opportunities for the Association of Southeast Asian Nations (ASEAN) as they competed for trade and investment.

"In the short to medium term, investments may be diverted from Southeast Asia to China. But in the longer term, Southeast Asia will benefit from greater economic exchanges with China," Goh said.

"Southeast Asia will thrive alongside a prosperous China," he told delegates including European Central Bank President Wim Duisenberg and the Bank of England's Sir Edward George.

US Federal Reserve Chairman Alan Greenspan addressed the conference Monday by video-link from the United States.

The likelihood of a China-ASEAN free trade zone was first raised last November by Chinese Premier Zhu Rongji during the ASEAN plus three summit in Singapore.

It would cover a market area of 1.7 billion people, comprising China's 1.2 billion population and the 500 million inhabitants of ASEAN's 10 member countries.

"It might be advisable in the long run for China and ASEAN countries to explore the establishment of a free trade relationship between them," Zhu said.

"With China's membership in the WTO (World Trade Organisation) in sight and the ASEAN free trade area by-and-large established in 2002, there is a good opportunity for us to enhance our cooperation."

ASEAN -- which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam -- was described by the London-based International Institute for Stragetic Studies as having seriously diminished international relevance.

But closer economic cooperation with its plus-three partners would inject new dynamism into the region.

At a conference in Cambodia last month, ASEAN economic ministers said boosting trade ties with economies outside Southeast Asia, as well as forging greater economic integration within ASEAN itself, were crucial to reducing risks from global developments such as the current US-led economic slowdown.

Within ASEAN, affluent Singapore is the prime advocate of free trade pacts, having signed one with New Zealand and negotiating others with Japan, the United States, Australia and Mexico.

But critics, particularly neighboring Malaysia, warn that Singapore may be giving its free trade agreement partners a back door into the region's own free trade zone.

(chinadaily.com.cn 06/04/2001)


In This Series

Chinese FM Meets EU Trio Foreign Ministers

"Asia-Europe Cooperation Important in New Century": Thai FM

Jiang's Speech at Third ASEM Foreign Ministers' Meeting

Third ASEM Foreign Ministers' Meeting Opens

Foreign Minister: Asia-Europe Links Benefit Both

ASEAN Foreign Ministers to Meet in Yangon Next Month

Free Trade Benefits ASEAN Affinity

China's Entry to WTO Bring Prospects to ASEAN

Premier Arrives in Singapore for ASEAN Summit

Premier to Attend ASEAN Summits

References

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