The delegations of China and the Association of Southeast Asia will start the first stage of negotiations pertaining to the establishment of a joint free trade zone on April 1. The project is enormous. Some two billion people are living in the countries that are taking part in the talks, and the volume of industrial output reaches a level of more than two billion dollars a year.
The decision to establish a free trade zone was made last November at a summit in Brunei. As is expected, a zone of customs-free trade is to be established in the region spreads from the Russian-Chinese border in the north to the northern coast of Australia in the south by the year 2010. Experts say that this will help to increase the volume of trade between the interested parties by at least 50%. At present, this volume makes up 1.23 billion dollars a year.
China is a sure leader in this integration procedure. It seems there is no other country of the Far East and Southeast Asia that is able to competing with the Chinese economy (except for Japan). Therefore, it is not surprising that China is very interested in the realization of this project. China will be able to replace Japan as the leader of the Asian Pacific region if the project is realized, taking into consideration the fact that the Japanese economy cannot overcome its crisis, whereas the Chinese economy is demonstrating impressive success.
China’s administration has already announced that it plans to cancel tariffs in the trade with APEC (Asian-Pacific Economic Cooperation), in which Russia is incorporated. Therefore, this is the strategy that Beijing will use within the coming decades.
The idea of the free trade zone came up after the notorious economic crisis in Asia that took place in 1997-1998. The crisis caused incredible damage to the economy of this vast region (as well as setbacks in the USA and Japan). At present, the excessive dependence on exports to America is considered to be dangerous. The prime minister of Singapore said at the summit in Brunei that it would create additional difficulties in connection with the setback of the American economy. That is why, he added, there should be a new inner dynamism set up, which implies the strengthening of Asian cooperation.
China is gradually replacing the USA and Japan as the major investor in the economies of Southeast Asia. This does not mean that Chinese businessmen will oust their American or Japanese colleagues. This means increasing and accelerating the integration processes in which the Chinese businessmen are already taking the leading role. China's influence is growing not only in the Asian region. The businessmen of China have recently started investing money in the economies of African countries, which are rich in minerals. Therefore, the predictions for the Chinese economy are really impressive.
The following question comes to mind: what is Russia’s role in all these processes? Cooperation between Russia and China in the energy field and construction of the transport system for bringing Chinese goods to European markets seem to become the most efficient. These are the projects that can bring a large amount of profit very quickly. Furthermore, Russia can sufficiently satisfy the growing needs of China's economy for energy carriers. However, this does not exclude the interest of the parties in other kinds of cooperation, for example, in high-tech industries.
There can be one conclusion made for the time being: China’s role in today's international trade will continue to grow. It is very important to create conditions under which all the interested countries could establish efficient and longstanding cooperation.
Reference. The Bangkok Declaration, which was signed on August 8, 1967, in Thailand, established the Association of Southeast Asian Nations (ASEAN). The five original members were Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Brunei Darussalam joined the association in January 1984 and Vietnam became the seventh member of the ASEAN in July 1995. Laos and Myanmar were admitted in July 1997.
Three main objectives were set by the ASEAN nations:
- To promote economic, social, and cultural development of the region through cooperative programs.
- To safeguard the political and economic stability of the region.
- To serve as a forum for the resolution of intra-regional differences.
In 1980, ASEAN and the the European Community signed an agreement on cooperation. In 1992, ASEAN members agreed on the establishment of the ASEAN Free Trade Area (AFTA). By 1997, the AFTA area represented a market of over 435 million consumers.
Oleg Artyukov PRAVDA.Ru
Translated by Dmitry Sudakov
In a weary world of endless US military interventions, sanctions, trade tariffs and chaos, let’s pause and take stock of the shining house on the hill