China and the Association of South East Asian Nations (ASEAN) took a major step yesterday to broaden economic cooperation by signing an agreement to promote investment.
The investment pact is the third free-trade agreement concluded between China and the 10-member Asian regional group following separate FTAs on trade in goods that took effect from mid-2005, and on services two years later.
China is the eighth biggest investor in ASEAN, with outstanding two-way investment that totaled US$11.7 billion at the end of last year.
PHOTO: EPA
ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Myanmar, Laos and Cambodia.
PROTECTION
The investment FTA calls for host countries to provide protection for foreign direct and portfolio investments, and compensation against damages caused by riots and political disturbances.
The agreement also eases restrictions on equity ownership and land acquisition.
The pact, which was signed by Chinese Commerce Minister Chen Deming (陳德銘) and his ASEAN counterparts, requires their governments to facilitate speedy settlement of business and labor disputes and the repatriation of corporate earnings.
CHINESE INVESTMENT
Chinese investment in ASEAN has jumped in recent years. Late last month, about 300 Chinese businessmen, attending a seminar in Pattaya, Thailand, signed deals committing about US$590 million of investment in industrial property in Thailand.
In April, Chinese Premier Wen Jiabao (溫家寶) announced China was setting up a US$10 billion China-ASEAN Fund on Investment Cooperation to support infrastructural development in the region.
China is ASEAN’s fourth-largest trading partner, with bilateral trade rising to about US$231 billion last year, up 14 percent from a year earlier.
With most Western economies facing a severe downturn since last year because of the global financial crisis, China has this year emerged as the biggest buyer of products from ASEAN members such as Thailand.
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