From July 20, China and ASEAN member states will formally in accordance with the provisions of the "Trade in Goods Agreement", originating in China and ASEAN's 7,000 tax items to give each other preferential tariff treatment to the free trade zone tax rate to achieve each other's goods clearance. At the same time, suffered from Europe and the United States special protection of Chinese textile enterprises will also get new trade opportunities.
Benefiting 1.8 billion consumers
Lu Jianren, deputy director of the APEC Policy Research Center at the Chinese Academy of Social Sciences, said the establishment of CAFTA will benefit 1.8 billion consumers in the region, who will have access to good and inexpensive goods and services.
Along with the approaching implementation of CAFTA's tax reduction program, the schedule of China's famous Southeast Asian business expert and the Chinese chairman of the China-ASEAN Business Council has become more and more dense. He told reporters that he has already made 100 presentations nationwide and has been invited to do so recently because domestic enterprises know little about CAFTA and related contents. He believes that with the formation of a unified market between China and ASEAN, there are huge business opportunities for Chinese companies.
According to the report, China's main commodities exported to ASEAN are automatic data processing equipment and its components, textile yarn and motorcycles. The main commodities that China imports from ASEAN are integrated circuits and microelectronic components, automatic data processing equipment parts, plastics in primary shapes, crude oil, refined oil products, natural rubber and so on. For agricultural products, China needs to import some tropical fruits that are only produced in Southeast Asia, and China is the main supplier of pecans, apples, pears, oranges, strawberries, grapes, asparagus and processed tomatoes in ASEAN. The study showed that China's exports to ASEAN would increase by $10.6 billion, or 55.1 percent, and ASEAN's exports to China would increase by $13 billion, or 48 percent, after CAFTA is completed.
China's trade with ASEAN has been in deficit since 1997, but from the first quarter of this year, the growth rate of China's exports to ASEAN (41 percent) has been higher than that of ASEAN's exports to China (16 percent). And last year, China and ASEAN's trade volume reached 105.9 billion U.S. dollars, an increase of 30 percent over the previous year, reaching 100 billion U.S. dollars a year ahead of schedule, which is inextricably linked to last year's China and ASEAN's implementation of the early harvest program, easing investment restrictions.
Textile enterprises have a new way out
In fact, the implementation of the CAFTA tax reduction program has also brought a new way out for Chinese textile enterprises that have hit a brick wall in all directions.
Although China and ASEAN countries Vietnam, Thailand, Indonesia and other textiles in the international market is a competitor, but the ASEAN textile industry is not as developed as China. For China and ASEAN mutual liberalization of the market, these countries are also more worried. China's textile enterprises can invest in the textile industry in ASEAN countries, where the construction of processing plants, re-export trade. This will alleviate the quota pressure in Europe and the United States.
According to expert analysis, the more suitable country is Laos, because Europe and the United States on the implementation of preferential policies in Laos, there is no export quota restrictions, and China and Laos are members of the "Bangkok Agreement", Laos is currently the only one to join the "Bangkok Agreement" of ASEAN member states, so Chinese enterprises can take orders and raw materials to Laos to produce, and then sold to the European and American markets. Told reporters that the president of the Lao Garment Association came to Beijing two days ago and said that he was very willing to Chinese garment enterprises to invest there.
And according to the analysis, China and ASEAN countries in the textile industry is complementary, ASEAN countries need China's textile machinery products, but also need to import cotton from China, in addition to some of the clothing accessories also need to be imported from China. After the formation of a unified market, the China Textile Industry Association, clothing associations and other industry associations can be with the ASEAN Textile Chamber of Commerce for exchange and cooperation and resource integration, in the international market to form a comprehensive regional competitiveness.
Enterprise investment in ASEAN still need to guard against barriers
Currently, China and ASEAN investment agreement is still in the negotiation stage, but Southeast Asian investment in China to be far more than China's investment in Southeast Asia to the end of last year, Southeast Asian countries invested 25.8 billion U.S. dollars in China, while China's investment in Southeast Asia is less than 2 billion U.S. dollars, but after the full implementation of the CAFTA, our country to ASEAN's investment will certainly accelerate. will certainly accelerate.
However, to remind aspiring investors in the ASEAN market, the establishment of CAFTA does not mean that everything will be smooth and unimpeded, some countries also have trade and investment barriers.
According to incomplete statistics, more than 80 trademarks on the Chinese side are currently being grabbed in Indonesia. The Vietnamese government still implements a compulsory import licensing system for seven important products: including petroleum, glass, iron products, vegetable oil, sugar, motorcycles and nine-seat motor vehicles, in addition to Vietnam's higher excise taxes on many imported products, while individual automotive products and even a 100% special excise tax. Thailand is not a signatory to the WTO's Agreement on Government Procurement (GPA), and in government procurement tenders, Thailand has set a series of restrictions on foreign bidding enterprises, such as for government procurement contracts exceeding 300 million baht, the winning foreign bidder must barter back Thai products worth no less than 50 percent of the contract amount. In Malaysia, accounting for 17% of the total customs tariff number of products subject to non-automatic import license management, such as construction equipment, agricultural products, minerals and automobiles, etc., which has caused some obstacles to the entry of similar products from China into the Malaysian market. Therefore, experts suggest that enterprises should consult more with local Chinese embassies and relevant organizations before investing in ASEAN.
Related China-ASEAN Free Trade Area
The China-ASEAN Free Trade Area (CAFTA) is a free trade arrangement established between China and 10 ASEAN countries.
On November 29, 2004, the two sides signed the Agreement on Trade in Goods in Vientiane, Laos. The agreement stipulates that from July 2005, except for the early harvest products and a small number of sensitive products for which duty reductions have already been implemented in 2004, the two sides will implement duty reductions on about 7,000 other tariff lines. By 2010, China and the six old ASEAN members - Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand - will have eliminated tariffs on most of their products and completed a free trade area. The four new ASEAN members - Cambodia, Laos, Myanmar and Vietnam - will enjoy a five-year transition period until 2015 to realize free trade with China.
Bangkok Agreement
The Bangkok Agreement, known as the First Agreement on Trade Negotiations among Developing Member States of the Asia-Pacific Economic Community (APEC), is a regional trade arrangement between developing member states of the United Nations Economic and Social Council for Asia and the Pacific (UNESCAP) that is more favorable than most-favored-nation treatment. The aim of the arrangement is to expand trade and promote economic development among member countries. It was signed on July 31, 1975, and on May 23, 2001, China formally acceded to it. Currently, the Bangkok Agreement includes six countries: Bangladesh, China, India, South Korea, Laos and Sri Lanka.