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Backgrounder: ASEAN-China Free Trade Area

Updated: 2013-10-08 16:55
( Xinhua)

BANDAR SERI BEGAWAN, Brunei - The ASEAN-China Free Trade Area (ACFTA) is a free trade area between the ten ASEAN member states and China.

The initial framework agreement was signed on November 4, 2002 in Phnom Penh, Cambodia, intended to establish a free trade area among the 11 nations by 2010. The free trade area came into effect on January 1, 2010.

The ACFTA is the largest free trade area in the world in terms of population and third largest in terms of nominal GDP, trailing the European Economic Area and North American Free Trade Area.

Under the free trade agreement, tariffs will be reduced to zero on 7,881 product categories, or 90 percent of imported goods. This reduction already took effect in China and the six original members of ASEAN: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The remaining four countries will follow suit in 2015.

The average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 percent to 0.6 percent starting January 1, 2010. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 percent to 0.1 percent.

In respect to bilateral trade, the two sides are on target to meet the goal of lifting total trade to 500 billion US dollars by 2015. In 2012, bilateral trade value reached 400.1 billion US dollars, 7.3 times as much as that of 2002, according to China's Ministry of Commerce.

China-ASEAN economic cooperation has never been more dynamic and fruitful, as China has become ASEAN's largest trading partner and ASEAN has emerged as China's third biggest trading partner with bilateral trade growing by more than 20 percent annually on average and surging by 37 times over the past two decades.

To date, China has invested a total of close to 13 billion US dollars in ASEAN countries so they are obviously an important destination for Chinese investment.China announced in 2009 that it would provide credit to ASEAN countries and set up a 10-billion-U. S.-dollar China-ASEAN Fund for investment cooperation.

So far, China has provided 12.2 billion US dollars worth of loans to ASEAN for infrastructure projects, such as bridges, roads, and power stations. And ASEAN has become China's fifth largest export market in terms of service trade.

 
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Schedule

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