China, ASEAN urged to strengthen economic cooperation

China and the Association of Southeast Asian Nations (ASEAN) should strengthen their investment and trade cooperation within the framework of China-ASEAN Free Trade Agreement to boost growth amid global economic uncertainty, experts said in Jakarta.

In an interview with Xinhua, Iwan Suyudhie Amri, director for ASEAN Economic Cooperation of the Indonesian Ministry of Foreign Affairs, said China and ASEAN have become the "Center of Growth" and the world is really looking at this region and expecting its continuing growth.

Iwan said that while China is the world's second biggest economy, it is Asia's biggest economy and ASEAN now is also growing and very dynamic. "Improving investment and trade cooperation between China and ASEAN can help drive and contribute to the global economy in terms of growth," he said.

"China-ASEAN Free Trade Area (CAFTA) is a very good platform for China and ASEAN to cooperate and the Chinese and ASEAN people are mutually enjoying the benefits from the establishment of the free trade area," Iwan said.

In 2010, China-ASEAN Free Trade Area (FTA) was launched, which was ASEAN's first FTA with an external party. The CAFTA has the largest consumer market size with 1.9 billion consumers and a GDP of US$9.4 trillion in 2011.

Since 2009, China has overtaken the EU and Japan as ASEAN's largest trading partner, while ASEAN ranks as China's third- largest trading partner, according to Penchan Manawanitkul, a senior officer on enterprise development at the ASEAN Secretariat here.

Penchan said China and ASEAN have vast opportunities for business and industries to collaborate and complement rather than compete with each other.

"The ASEAN member states and China have diverse resources, skills, strengths and talents that could be shared and developed into core competencies and capabilities for domestic businesses to thrive in the regional and global market, given the global economic downturn that stemmed from the euro zone financial crisis," Penchan said.

Director Iwan said that since China became one of ASEAN's dialogue partners, the bilateral relationship between Beijing and the regional grouping has been getting better and warmer, adding that both sides are keen in promoting peace and stability in the region and have realized the role of regional security in the region's overall economic development.

Iwan explained that after the signing of the free trade agreement, huge potentials have been explored. Aside from the two- way trade between China and ASEAN, the agreement has also promoted the development of tourism and cultural exchanges between the two sides.

According to Iwan, China's economic capacity could and should contribute more in promoting the ASEAN Economic Community in 2015, especially in infrastructure development.

Iwan stressed that investments from China to ASEAN totaled only about 2.8 billion U.S. dollars in 2010, which was relatively small compared with investments from Western countries, even behind South Korea. "China's increasing investment can improve ASEAN countries' infrastructure and accelerate the region's economic growth and can increase the income and purchasing power of ASEAN people." Iwan emphasized.

Iwan explained that China has advanced technology and its production process is very efficient and the prices of Chinese products are relatively cheap so some ASEAN member countries are facing big trade deficit with China. "To maintain sustainable trade partnership with ASEAN, China needs to invest and transfer their technologies to this region to offset the trading deficit," Iwan said. Iwan added that there is also a need for ASEAN countries to improve their foreign investment environment by shortening the permit application process, eradicating corruption and by adopting transparency in implementing economic policies.