China-ASEAN FTA sets model for mutually beneficial cooperation among developing countries

Source:Xinhua Published: 2019/10/26 14:17:48

People pose for photos with the Indonesia pavilion during the first China International Import Expo (CIIE) in Shanghai, east China, Nov. 5, 2018. (Xinhua/Liu Dawei)

On Feb. 21, 2019, after the Chinese New Year holiday, dozens of container trucks parked side by side in an open space in West Java's Sukabumi Regency, with big banners writing "mangosteen" "for China", hanging in front of the truck.

This is the export releasing and send-off ceremony of 933 ton of mangosteen held by Indonesian agriculture ministry.

The then Agriculture Minister Andi Amran Sulaiman hailed this direct export of mangosteen from Indonesia to China export, saying, "The export process will be much and much easier in the future."

According to Amran, the export of mangosteen has been experiencing rapid growth with 38,000 ton mangosteen export in 2018 from 9,000 ton in 2017, thanks to the direct export process to Chinese market, the country's largest mangosteen export destination.

The close China-Indonesia mangosteen trade is the miniature and the fruit sown of expanding and deepening cooperation of the China-ASEAN Free Trade Area (FTA). Since the full establishment in 2010, the implementation of the free trade agreement has brought visible and tangible benefit to the people in this region.

Take the agricultural sector for example, the preferential policies of the FTA have enabled tropical food of ASEAN to enter the lives of ordinary Chinese people and let China's fruit go to the supermarkets in ASEAN countries.

Wan Latiff, CEO of Malaysia External Trade Development Corporation, a government agency oversees external trade, told Xinhua earlier that, Malaysia's specialty fruits and others have been welcomed in the Chinese market.

The land-sea freight train of the New International Land-Sea Trade Corridor heading for Indonesia waits to depart in southwest China's Chongqing, April 26, 2019. (Xinhua/Liu Chan)

Starting this year, Malaysia's Musang King durian is available in Chinese market after the country's authorities approved import of whole frozen durian and it shows the encouraging progress of the China-Malaysia trade cooperation, Latiff said.

China has been the largest trading partner of ASEAN for 10 consecutive years, with bilateral trade surging 10 fold from 16 years ago to 587.8 billion US dollars in 2018, while ASEAN overtook the US as China's second-largest trading partner in the first half of this year.

Against the slowdown of global economic growth and the prevalence of trade protectionism, the two-way trade between the two parties continues to maintain a sound momentum and it stands head and shoulders above other major trade relations.

The free trade zone has accelerated the two-way investment between China and ASEAN countries.

Feeding on the robust investment, regional economy has been drawing strengths to thrive.

The Indonesia Morowali Industrial Park (IMIP), local smelting investment from China's Tsingshan Iron and Steel, has make a total accumulated investment of more than 7 billion dollar, elevating Indonesia to the second largest stainless steel producer after China.

Chea Vuthy, Deputy Secretary General of the Council for the Development of Cambodia, a government agency oversees investment, highly praised the FTA, saying, "With the continuous implementation of FTA and the introduction of favorable measures, we can see that the constantly strengthening of our cooperation at the political, social and economic levels."

Secretary-General of ASEAN Lim Jock Hoi told Xinhua previously that China is the second largest economy in the world and has greatly contributed to the growth of ASEAN.

"Since the entry into force of the ASEAN-China FTA, the ASEAN-China FTA has been upgraded and work is underway for its implementation to bring further benefits to ASEAN and Chinese businesses." He said.

Porters load goods to a ship at Sunda Kelapa port in Jakarta, capital of Indonesia, Jan. 30, 2010. (Xinhua/Yue Yuewei)

China and ASEAN signed a free trade agreement (FTA) in 2004 and in November 2018, the two sides upgraded the protocol of their FTA agreement to build the largest free trade zone (FTZ) among developing countries.

The upgraded protocol of China-ASEAN Free Trade Agreement took effect on Oct. 22. According to the new protocol, the new rules of origin are more flexible and convenient in the determination of the origin, which would help companies from both sides enjoy more tariff preferences and promote trade between the two sides.

Analysts pointed out that the upgraded FTA has lowered the threshold in terms of country of origin, customs, as well as the service trade and investment, and will pose a positive effect on further integration of the region.

"The upgraded version of the FTA will provide more tariff concessions and injecting new impetus into the trade between the two sides," Chinese Ambassador to ASEAN Huang Xilian said during a joint interview with Chinese media this October.

The China-ASEAN Free Trade Area, which covers some 1.9 billion population with a total gross domestic product of around 17 trillion US dollars has effectively promoted the stable and rapid development of bilateral economic and trade ties. Experts said it has ever since become a successful model of win-win cooperation.

Bambang Suryono, an Indonesian scholar and president of the Jakarta-based think tank Nanyang ASEAN Foundation, told Xinhua that ASEAN is one of the world's largest producers of commodities. China's rapid economic growth makes it a major commodity importer, products of both sides are highly complementary.

"Against the backdrop of global economic slowdown and rising protectionism, China and ASEAN have been staunchly upholding the concept of mutual benefit and win-win cooperation, and set a fine example for mutually beneficial cooperation among developing countries," He said.

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