A free-trade agreement (FTA) between China and ASEAN came into force yesterday, consolidating a sixfold surge in economic activity over the past decade between countries representing a quarter of the world’s population.
The agreement expands a limited 2005 trade area between China and the 10-member ASEAN, scrapping tariffs on about 90 percent of goods. By 2015, duties must be cut to no more than 50 percent on “highly sensitive” items, including ambulances in Brunei, popcorn in Indonesia, snowboard boots in Thailand and toilet paper in China.
China’s economic clout in Southeast Asian countries has risen over the past decade as policy makers slashed tariffs on electronics, automobile parts and computer chips. Japan, India, Europe and the US have followed China in courting ASEAN, home to investments from Intel Corp, the world’s largest maker of computer chips, and Toyota Motor Corp, the biggest automaker.
“This FTA is going to make a difference at the margin to some ASEAN countries, but not others,” said Razeen Sally, a director of the Brussels-based European Centre for International Political Economy, a trade-policy research group. “Basically, it takes down the tariffs, but does little on all the non-tariff barriers where you would have much bigger gains to trade.”
China’s trade with ASEAN has jumped sixfold since 2000 to US$193 billion last year, surpassing that of the US. China’s share of Southeast Asia’s total commerce has increased to 11.3 percent from 4 percent in that time, whereas the portion of trade the US has with the bloc fell to 10.6 percent from 15 percent, ASEAN statistics show.
During that time, ASEAN’s trade deficit with China widened by five times to US$21.6 billion. The bloc reported a US$21.2 billion trade surplus with the US last year, down 12 percent from 2000.
The trade agreement would hit high-tariff industries in Indonesia and the Philippines more than other ASEAN countries, Sally said.
Trade in parts and components, the “central artery” of China-ASEAN economic ties, won’t be affected much because most of those tariffs are already near zero, he said.
Opposition to the trade agreement has been loudest in Indonesia, where the government has sought to placate concerns that industries, including textiles, food and electronics, will suffer. Indonesia should renegotiate the deal because the textile industry may see its domestic market share decline by 50 percent as cheaper Chinese goods enter the market, said Ade Sudradjat, vice chairman of the Indonesian Textile Association.
The government is setting up a team to monitor trade practices, Hatta Rajasa, coordinating minister for the economy, told reporters in Jakarta on Wednesday.
“When a nation has cheap products, we must see whether there’s unfair trade in it, such as unfair subsidies,” Rajasa said. “We must be proactive.”
Indonesia, ASEAN’s biggest economy and home to about 40 percent of the bloc’s 584 million people, has required Chinese exports of garments, electronics, shoes, toys and food be shipped from designated ports, with every container inspected upon arrival.
China, poised to overtake Germany as the world’s largest exporter this year, faces 101 trade investigations in 19 countries, Xinhua news agency reported last month.
ASEAN governments should resist the temptation to raise non-tariff barriers, the association’s secretary general, Surin Pitsuwan, told Xinhua in an interview published yesterday.
To help its exporters, China has halted the yuan’s gains against the US dollar from July last year. Last year the yuan remained largely unchanged against the US dollar, while Indonesia’s rupiah climbed 15.5 percent, Thailand’s baht advanced 4.2 percent and the Philippine peso increased 2.3 percent.
ASEAN includes Indonesia, Thailand, Malaysia, Singapore, Brunei, the Philippines, Cambodia, Laos, Myanmar and Vietnam. Wide economic disparity has hindered the group’s efforts to form a single market, as the purchasing power of the group’s four richest countries was 10 times greater than that of the other members last year, statistics on the bloc’s Web site show.
The Taipei MRT is open all night tonight following New Year’s Eve festivities, and is offering free rides from nearby Green Line stations. Taipei’s 2025 New Year’s Eve celebrations kick off at Taipei City Hall Square tonight, with performances from the boy band Energy, the South Korean girl group Apink, and singers Gigi Leung (梁詠琪) and Faith Yang (楊乃文). Taipei 101’s annual New Year’s firework display follows at midnight, themed around Taiwan’s Premier12 baseball championship. Estimates say there will be about 200,000 people in attendance, which is more than usual as this year’s celebrations overlap with A-mei’s (張惠妹) concert at Taipei Dome. There are
LOOKING FOR WHEELS: The military is seeking 8x8 single-chassis vehicles to test the new missile and potentially replace the nation’s existing launch vehicles, the source said Taiwan is developing a hypersonic missile based on the Ching Tien (擎天) supersonic cruise missile, and a Czech-made truck has been tentatively selected as its launch vehicle, a source said yesterday. The Ching Tien, formerly known as Yun Feng (雲峰, “Cloud Peak”), is a domestically developed missile with a range of 1,200km to 2,000km being deployed in casemate-type positions as of last month, an official said, speaking on the condition of anonymity. The hypersonic missile to be derived from the Ching Tien would feature improved range and a mobile launch platform, while the latter would most likely be a 12x12 single chassis
UP AND DOWN: The route would include a 16.4km underground section from Zuoying to Fongshan and a 9.5km elevated part from Fongshan to Pingtung Premier Cho Jung-tai (卓榮泰) yesterday confirmed a project to extend the high-speed rail (HSR) to Pingtung County through Kaohsiung. Cho made the announcement at a ceremony commemorating the completion of a dome at Kaohsiung Main Station. The Ministry of Transportation and Communications approved the HSR expansion in 2019 using a route that branches off a line from Zuoying Station in Kaohsiung’s Zuoying District (左營). The project was ultimately delayed due to a lack of support for the route. The Zuoying route would have trains stop at the Zuoying Station and return to a junction before traveling southward to Pingtung County’s Lioukuaicuo Township (六塊厝).
The Mainland Affairs Council (MAC) yesterday vowed to investigate claims made in a YouTube video about China’s efforts to politically influence young Taiwanese and encourage them to apply for Chinese ID cards. The council’s comments follow Saturday’s release of a video by Taiwanese rapper Chen Po-yuan (陳柏源) and YouTuber “Pa Chiung (八炯)” on China’s “united front” tactics. It is the second video on the subject the pair have released this month. In the video, Chen visits the Taiwan Youth Entrepreneurship Park in Quanzhou in China’s Fujian Province and the Strait Herald news platform in Xiamen, China. The Strait Herald — owned by newspaper