ASEAN-China economic relationship will strengthen

Subject

ASEAN-China economic cooperation.

Significance

Trade between China and the ASEAN states has grown fast over the last few years, even amid sluggish growth of global trade overall. Investment in ASEAN countries is already a key part of the globalisation strategies of many Chinese companies. The ASEAN-China Free Trade Area will probably increase its share of global trade as trade within it outpaces that within other major economic blocs, such as the EU and North America.

Impacts

• Investment in ASEAN countries will help Chinese firms reduce production costs, tap local markets and avoid US tariffs.
• Chinese investment will help upgrade the infrastructure and domestic industrial sectors of ASEAN’s poorer economies.
• Competition between China and ASEAN countries will increase as the latter’s own manufacturing sectors develop.