The sixth China-ASEAN Expo, to be held next month in Nanning, capital of the
Guangxi Autonomous Region in southwest China, at first sight seems like just
another trade fair, of which there are plenty in Asia, particularly in China.
Most of the attendees will be government officials and company representatives
from China and the 10 countries which make up the Association of South East
Asian Nations.
But an important institutional development lies behind this particular
grouping. The 11 governments agreed in 2002 to set up the ASEAN-China Free
Trade Agreement (ACFTA). Next year its first full phase comes into effect with
the elimination of tariff and non-tariff trade barriers between China and the
original six members of ASEAN - Brunei, Indonesia, Malaysia, the
Philippines, Singapore and Thailand.
A second phase kicks in five years later with the inclusion of the four newer
members of ASEAN: Cambodia, Laos, Myanmar and Vietnam. Other major projects,
such as a railroad from Singapore to southwest China, add to the sense of
growing integration.
ACFTA's influence has already been felt. An "early harvest" scheme brought in
the reduction and elimination of tariffs on certain items from 2005. The
free-trade agreement has had a wider regional impact too, prompting similar
agreements between India and ASEAN and Japan and ASEAN, adding to the already
complex web of regional institutional arrangements spun across East Asia and
beyond into South Asia.
This web is not the result of some bureaucratic inefficiency, much as some
would prefer simple regional structures. Rather, it reflects the complicated
interlocking patterns of relationships in both economic and security areas
within the region and with external actors such as the United States (and under
President Barack Obama, Washington's rhetoric towards Southeast Asia has been
more engaged). These relationships, and the institutions that reflect them,
will continue to shift.
Such regional free-trade agreements are supported by free marketeers, including
those in the Chinese government, who cite research on the positive impact ACFTA
will have on trade and investment flows, and hence on gross domestic product
within the region. Experience elsewhere suggests that overall growth will
improve when trade barriers come down, though given the diversity of wealth,
resources and economic development within the ACFTA countries, there is no
guarantee that those benefits will be spread equally among its nearly two
billion people.
Economic growth in the region has also increased risks of tensions in other
areas, for example in disputes over the rights to exploit energy resources in
the South China Sea.
One question this raises, of interest to those inside and outside the region,
is the role of China in all of this regional activity. Critics suggest that
China's promotion of institutions such as ACFTA reflects some sort of economic
colonialism, an effort to insert its tentacles further into the economies of
its neighbors. They cite, too, territorial disputes in the South China Sea as
evidence of troubles to come, though these do not all involve China.
On the other hand stands China's increasing engagement with multilateral
institutions, welcomed by many as a sign of its intention to build good
neighborly relations, in the process securing its own border regions to
facilitate internal development. Others point to Beijing's 2003 signature on
the ASEAN Treaty of Amity and Cooperation, the progress made in demarcating
land borders such as that between China and Vietnam, or the possibility of
joint exploration of disputed resources.
Against this background, the fair in Guangxi is part of a process of increasing
economic and commercial engagement between governments and companies in East
Asia. Although China does not seek the limelight, it is clearly playing a
strong role in promoting this.
There are some domestic spinoffs within China from this too, particularly for
Guangxi and its neighboring province of Yunnan, both of which have substantial
land borders with Southeast Asia and which see themselves as bridges between
the Chinese and Southeast Asian markets.
An important consequence, therefore, of this commercial engagement is to build
commitments between the 11 countries that go wider than trade between companies
and have the effect of tying regional interests closer together. From a
geopolitical perspective, this can only be welcome. It also suggests that, even
if some of the predictions of raised economic growth on the back of greater
trade are a trifle ambitious, the region has the potential to play an
increasingly important role in the global economy. And this means not just
China, but the wider East Asian region as well.
Tim Summers is an independent researcher and consultant on Chinese
business and political economy, including political risk work and media
commentary. He is a PhD candidate researching Chinese political economy at The
Chinese University of Hong Kong.
(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please
contact us about
sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
