Approval for a deal with China was reached as the leaders of the Association of Southeast Asian Nations (ASEAN) held separate talks with their key dialogue partners China, Japan, and South Korea on closer integration.

The free trade block could be operating "in five to 10 years," China's Premier Zhu Rongji told reporters after the meeting at Bandar Seri Begawan.

In the consensus-driven ASEAN, Malaysia's objections to an inflexible free trade agenda and concern about China's growing importance were expected to be barriers to an enlarged trading bloc covering more than 1.8 billion people.

But Chinese Foreign Minister Tang Jiaxuan said there were no objections when Zhu met the ASEAN leaders.

As China stands on the verge of entry to the World Trade Organisation, ASEAN has developed an overriding interest to engage Beijing.

"All countries agreed to set up a free trade zone," Tang said.

The agreement highlighted a new urgency to deal with the intense global uncertainty brought on by the economic downturn and efforts to combat terrorism.

"ASEAN must improve its credibility as a regional organisation and respond decisively to challenges," Brunei's Sultan Hassanal Bolkiah, the ASEAN chairman said.

He said Southeast Asia discussed "pushing the frontiers of our economic cooperation beyond existing agreements for free trade ... and go beyond the ASEAN free trade area."

Tang said no country objected to the free trade deal with China, although on the eve of the meeting Malaysian Prime Minister Mahathir Mohamad had expressed fears the benefits could be lop-sided and could wipe out Malaysian companies.

"China is a big producer of goods which are in direct competition with goods produced in the region, and we must make sure the influx will not cause our industries to shut down," he said.

A full East Asia trading bloc covering more than two-billion people was "bold yet feasible," Sultan Hassanal said, but it would expand Mahathir's arguments to include products from South Korea and Japan.

A Japanese government official also downplayed the wider proposal saying "only three or four countries said it was an issue to be considered but there was no in-depth argument on it."

(China Daily November 6, 2001)