Wei Hua, a 35-year-old businessman in Nanning, capital of Southwest China's Guangxi Zhuang Autonomous Region, has long intended to expand his business to Southeast Asian countries.

And that interest was greatly aroused following his visit to the First China-ASEAN Exposition which concluded at the weekend.

"I have talked with businesspeople from ASEAN countries and listened to lectures given by their governments," said Wei.

"I have a feeling that it is a big market beckoning me," he added.

Wei is among an increasing number of Chinese firms and individual investors who are beginning to eye the growing market of 400 million consumers.

With the China-ASEAN free trade area (FTA) gradually coming together, two-way trade and mutual investment is set to thrive in the coming years, market observers suggest.

China and 10 ASEAN members signed agreements in 2001 to complete the world's largest FTA in terms of population by 2010.

The tariff cuts on merchandized goods will be implemented next year and will lead to a booming trade scenario.

China's inexpensive and quality household electrical appliances, textile goods and machine products are among the most needed goods in the ASEAN market, said officials and merchants attending the expo.

"Demand for these goods will go all the way up in the coming years," said Situ Dilin, a Chinese entrepreneur who has been doing business in Indonesia for more than five years.

Demand for infrastructure construction in some developing ASEAN nations will also offer a wealth of business opportunities for Chinese companies specializing in the field, said ASEAN and Chinese officials.

Welcoming messages

The four-day expo saw ASEAN countries rolling out the red carpet to Chinese enterprises, commenting their entry will help solve the capital shortage that faces most developing ASEAN countries as they gather momentum for a predicted economic rebound.

"We welcome Chinese investors," said Zaw Min Win, vice-president of the Federation of Chambers of Commerce and Industry of Myanmar.

The country is striving to absorb foreign investment to revitalize its economy and create jobs.

Currently it has some US$7.6 billion in foreign investment from 27 countries and regions, with China ranking 15th.

Zaw Min Win listed the priority sectors he believes are most attractive to overseas capital, which includes oil, gas, real estate, agriculture and mining.

"Relatively speaking, we have abundant natural resources and cheap labor," he told a meeting during the expo, which brought together hundreds of Chinese firms and exporters.

Cambodian officials also called for Chinese investment in the sectors of water management and highway construction.

They vowed to give equal treatment to foreign investors and further liberalize the market.

Other countries such as Viet Nam, Indonesia and Laos made similar overtures.

Singapore, the most developed member of ASEAN, continues to welcome Chinese firms with open arms.

Officials from the nation's investment promoting departments stressed the advantages of investing in Singapore, including its large international fund pool, advanced research and development support, and easy access into international markets.

Who should be ready?

Exporters, including small and medium-sized enterprises (SMEs) and individual traders will benefit from the FTA and closer economic ties between China and ASEAN.

"What comes with the tariff reduction is a fattened wallet," said Wei. He has conducted trade with Thailand and Viet Nam for more than a decade, and finds his business profit margin has increased by some 20 percent after the early-harvest program was implemented this year.

The program aims to facilitate the trade of fruit and vegetables by reducing or eliminating tariffs.

Wei said he and his foreign partners are confident about business prospects in years to come.

"We have talked about diversifying our trade," he said. "With tariff cuts extended to more products, we should try to trade more items other than fruit and vegetables."

Wei also believes Chinese SMEs and individual traders, able to act swiftly when it comes to decision-making and adept at reacting to market changes, would find opportunities by participating in explosively expanding China-ASEAN trade.

The trade volume is expected to exceed US$100 billion by the end of the year, representing an increase of more than 30 percent year on year, said Chinese Vice-Premier Wu Yi at the expo.

In terms of products, consumer goods and machinery are most favorable in the ASEAN markets, said a Cambodian official.

These goods include television sets, mobile phones, clothing, tool-making machines and telecommunications equipment.

In addition to trade, Chinese firms seeking to invest in ASEAN will find that the time is ripe for them to do so, said Fan Ying, a professor at the Beijing-based Foreign Affairs University.

ASEAN generally witnessed a foreign investment slow down in the past years and has not seen a rebound until recently.

"With ASEAN economies ready to take off after digesting the impact of the Asian financial crisis in the late 1990s, they need capital," said Fan.

And there are many sectors that Chinese firms could find themselves competitive in, said Situ.

Traditional Chinese medicine is an example in kind, he said.

Situ is the executive director of the Sunny Group with its headquarters in Macao and has penetrated a variety of sectors in ASEAN.

"In ASEAN, people believe in TCM," he said. "Herbal medicine resources are also rich."

On a different front, demand for infrastructure construction is experiencing an unprecedented surge, said Diao Chunhe, vice-president of the China International Contractors Association.

China's leading construction companies such as China Railway Engineering Corporation and China Harbor Engineering Corporation have defined ASEAN as their business focus.

And smaller-sized firms and equipment providers can also benefit from this emerging market, said Diao, adding they should be keen on the opportunity.

In terms of service sectors, tourism service providers can be winners thanks to the intensified people-to-people exchanges between China and ASEAN.

Warnings and suggestions

Insiders and forerunners cautioned that Chinese firms and traders should not ignore the obstacles in their rush to ASEAN.

The first obstacles include red tape and market irregularities in some ASEAN nations and regions.

"Sometimes we feel frustrated as we have to deal with all these," said a Chinese exporter of small goods who only gave his surname as Zhou.

"Occasionally, poor infrastructure there gives you a hard time," he added, saying his goods were sometimes delayed.

"The situation is fortunately improving, but still not perfect," he said. Zhou has been doing business in ASEAN for more than seven years.

Zhang Weidong, a senior official from China's sole export credit agency, the China Export and Credit Corporation, advised Chinese exporters to insure their exports.

"They should learn to leverage their risks when heading for the ASEAN market," he cautioned.

Situ advised Chinese exporters to pay more attention to brand-building and after-sale services.

"The hit-and-run attitude should be abandoned," he said. "Otherwise, you will lose consumers hearts."

Situ elaborated his point with a well-known example from the annals of business.

Chinese motorcycles once occupied 40 to 50 percent of the market share in Indonesia. That proportion has shrunk to about 10 percent due to poor after-sales services.

He suggested Chinese firms find a local partner and establish a joint venture before seeking to make big inroads in ASEAN.

(China Daily November 9, 2004)