ASEAN benefits from China's economic growth
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China's high economic growth, which is also becoming increasingly "inclusive" , is producing positive spillovers to members of the Association of Southeast Asian Nations (ASEAN), experts said on Friday.
"China now tends to import more from its neighboring economies than exporting to them," said John Wong, professor and former director of East Asian Institute of Singapore, at the fifth Pan-Beibu Gulf (PBG) Economic Cooperation Forum in the southern Chinese city of Nanning, Guangxi Zhuang Autonomous Region.
In the first half of this year, exports to ASEAN countries reached 64.6 billion U.S. dollars, up by more than 45 percent, and imports from ASEAN countries were nearly 72 billion U.S. dollars, up by 64 percent, according to China's Ministry of Commerce.
This is a sign that China's economic growth is becoming more "inclusive" in the regional and the global contexts, Zhang Yansheng, researcher of international trade at the National Development and Reform Commission, said at the Forum.
The increasing "inclusiveness" is largely driven by China's efforts to shift its economy from excessive dependence on exports towards a more balanced growth pattern, which is more domestic demand-oriented, Zhang said.
In the long run, as China is putting economic restructuring high on its agenda, China's manufacturers will gradually and inevitably pass some of their comparative advantages to the ASEAN region as workers' wages are rising and industries are upgrading, said Zhang.
Experts said even prior to the ongoing government campaign to upgrade its economy, China and ASEAN were highly complementary and mutually beneficial.
China' s economic growth is in need of primary commodities and natural resource products from the ASEAN region, while China, as a large industrial economy, can also supply individual ASEAN countries with a wide variety of manufactured products, Wong said during the two-day Forum meeting, which ended on Friday.
"However, frankly speaking, some ASEAN countries in the 1990s were apprehensive of China's economic rise," recalled Wong
In the early 1990s, China' s economic relations with the Southeast Asian nations were quite weak, with their two-way trade amounting to no more than 2 percent of each other's total trade, with most trade activities concentrated in Singapore and Malaysia, said Wong, citing official figures from ASEAN.
As China' s economy continued to expand, its spillovers into Southeast Asia also increased. In 1995, trade between China and ASEAN was only 20 billion U.S. dollars, but it increased more than tenfold by 2008, amounting to 223 billion dollars.
"China is not just the world's foremost manufacturing base, but also the world's largest processing base, as a little over half of its trade comes from its processing activities," he said.
China imports parts and components from different countries in the region for processing into finished products and then exports them (as "made-in-China" ) to the United States and European markets, Wong said.
In this way, China's export-oriented economic growth actually serves to integrate all the economies in the region with benefits for all, he said.
Apart from its rapid economic growth, China' s expanding economic relations with ASEAN were also assisted by the China-ASEAN Free Trade Agreement (CAFTA) and the framework agreement signed in November 2002, said Zhang.
The CAFTA, which was first proposed by China's former Premier Zhu Rongji in November 2000, came into operation in January 2010, freezing tariffs for 7,881 products, or about 90 percent of the trading commodity categories.
Echoing Zhang, Wong said that ASEAN's economic relations with China are set to strengthen in the years ahead as CAFTA becomes the major platform for both sides to intensify their economic interaction.
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