China,the world's fastest-growing economy, is becoming an increasingly important export market for Southeast Asia. On average, the country's imports to its southern neighbors has increased by 25 percent annually between 1998 and 2002.

Overall, the total trade volume between China's mainland and the 10-member Association of Southeast Asian Nations, which includes Singapore, Malaysia, Indonesia, Thailand, the Philippines, Brunei, Cambodia, Laos, Myanmar and Vietnam, topped US$54 billion last year.

Premier Wen Jiabao said he was confident that two-way trade between China and ASEAN would exceed US$100 billion by 2005 amid belief that the current pace of growth would continue in the following years.

His confidence was likely bolstered by the fact that in the first half of the year bilateral trade between China and ASEAN jumped 55.5 percent to US$34.2 billion from the same period a year ago.

Furthermore, when a free trade pact between the two parties is signed by 2010, the figure will rise by leaps and bounds, analysts say.

Zhong naiyi, a Shanghai Academy of Social Sciences researcher, said when the agreement is realized, there will be "a more integrated economic picture as China and ASEAN are becoming more economically interdependent."

At present, about 55 percent of China's exports are products that have been processed from imported materials, much of which comes from other places in Asia, Wen said. He added that it means a considerable part of China's export returns are shared by other countries, especially around the region.

The Sino-Thai trade relationship, for instance, got closer on October 1 as both countries began enjoying zero tariffs on fruits and vegetables. The agreement signed in June covers a total of 188 varieties.

"The agreement signals the two economies have taken a big step forward to a fully opened market," said Shen Dayong, secretary general of Shanghai World Trade Organization Research Center.

"It is expected to benefit both countries. Additionally, it is a move to test how things will come out under a free-trade framework (between China and ASEAN)," Shen said.

Thailand is expected to increase its high-end rice exports. As a major rice supplier to China, the country delivered 4.6 million tons to the domestic market last year. Before 2001, Thai sales were only about 250,000 to 300,000 tons annually.

The country is hoping to sell more Thai Hom Mali rice, an aromatic grain which has increasingly been finding favor domestically in recent years, said Pranee Siriphand, director of Thailand's Bureau of Rice Trade.

From china's side, the country sold US$8.47 million worth of vegetables and US$13.7 million fruits to Thailand last year.

As china's economy flourishes, Southeast Asian markets have been a major reason for that growth and increasingly lucrative for domestic suppliers.

The shanghai Foreign Economic Relations and Trade Commission also reported that ASEAN members were a major contributor to the city's growth in overseas outsourcing projects and labor service exports.

The value of Shanghai's overseas outsourcing projects and labor service exports almost doubled in 2002 to US$730 million compared to the same period a year earlier.

"Neighboring countries such as Vietnam and Bangladesh have long cooperated with Shanghai," said Wang Lingyi, another researcher with the Shanghai Academy of Social Sciences. "The firm relationship has helped the city win more outsourcing contracts."

China's consolidated economic ties with ASEAN have also prompted Japan to create a free-trade area.

Japan will begin negotiations by 2005 on an accord with ASEAN which would help companies boost sales in a region that buys about 20 percent of all its electronic exports.

The country, apparently, tries not to fall behind China which is currently negotiating its own free-trade agreement with the region.

(China Daily October 14, 2003)