China on Sunday signed an agreement with the Association of South-east Asian Nations that promises to open up key service sectors as the two partners move towards creating what could be the world’s biggest free-trade zone.
The accord, which comes into effect in July, was signed during a meeting between Chinese premier Wen Jiabao and 10 Asean leaders attending the regional group’s annual summit in the central Philippine city of Cebu. Some18 months ago, China and Asean agreed a deal freeing up trade in goods that lowered tariffs on more than 7,000 products.
The deal is seen as a vital step towards the establishment by 2015 of a China-Asean free trade area. Such a zone would bring together China’s 1.2bn people and south-east Asia’s 500m citizens into a single market. It also highlights the growing ties between China and south-east Asia as well as Beijing’s increasing influence as a regional power.
South-east Asian companies should get greater access to rapidly growing Chinese sectors – such as banking, information technology, real estate, health, engineering, education, transport and construction – thanks to the new agreement.
It may also help cut Asean members’ huge trade deficits with China, allaying fears that expanding economic ties with Beijing is disadvantageous for smaller economies.
In his remarks during the meeting with Asean leaders, Mr Wen said the agreement “will mark a key step forward in the building of the China-Asean Free Trade Area and lay the foundation for full and scheduled completion of the China-Asean FTA.”
Asean business leaders said they were looking to the deal to help them gain entry to sectors that are currently off-limits to foreigners in China.
“Many businessmen in the Philippines and other south-east Asian countries are hoping the deal will allow them to provide business and consumer services in connection with the Beijing Olympics in 2008 and the Shanghai World Exposition in 2010,” said Samie Lim, a member of the Asean Chamber of Commerce and Industry’s governing councils.
“China already has the hard infrastructure in terms of roads, hotels and other facilities. We want to provide the soft infrastructure – people and services.”
Asean’s 10 member countries formally agreed this weekend to bring forward to 2015 the establishment of a south-east Asian common market. But analysts have warned that the grouping faces major challenges in achieving that goal.
■ Mr Wen will make an ice-breaking visit to Japan in April, Japanese officials said yesterday, while China warned that the two countries’ wartime past could still derail efforts to heal ties. Mr Wen and Japanese prime minister Shinzo Abe used the Cebu summit to narrow down a time for the first top-level Chinese trip to Japan in more than six years.