Acfta

3. ASEAN-China Trade Relations

With growing number of FTAs   the ASEAN-China FTA seems a natural development.   A FTA has many advantages and the most obvious is a preferential trade access for the members and more exposure for outsiders to become involved with the member states. In this paragraph we will discuss the ASEAN and China’s trade policies and the intra-Foreign Direct Investments (FDI).

3.1. Integration and Economic cooperation

At the ASEAN summit in 2000; China and ASEAN leaders agreed to communicate on the accession of China in the WTO and to further enhance integration and economic cooperation. This was a logic response on the important global and regional developments. First, there has been a significant growth in the number of regional trading arrangements. The second development is the emergence of China as an economic force in the global economic system. China’s economy became very dynamic and China established itself as a major exporter and a FDI magnet. A number of ASEAN members had the same experience as China at that moment; however not at the same scale and pace. The third was the 1997 financial and economic crisis. As a result   of the crisis the ASEAN process progressed (N., 2001).

In the present all Southeast Asian Countries have diplomatic relations with China. China’s proposal for an ASEAN-CHINA FTA was accepted fast.   China and ASEAN countries started investing in each other’s country as well; transport links have been built or improved. China assisted to ease arising tensions because of conflicting territorial claims in the South China Sea. China did this by dialogue with ASEAN instead with individual member states (Severino, 2008).