ASEAN-China FTA Agreement: Impact on ASEAN

Publication type Article
Status Published
Occupation: Junior Research Fellow, Centre for Comprehensive European and International Studies, National Research University Higher School of Economics
Affiliation: National Research University Higher School of Economics
Address: Russian Federation, Moscow
Journal nameAsia and Africa Today
EditionIssue 12

The article analyses the impact of the ASEAN-China Free Trade Area agreement on the development of trade, economic and investment cooperation between the parties with an emphasis on the ASEAN member states. The work reveals the main reasons for the increase in export supplies from ASEAN to China, as well as the volume of Chinese foreign direct investment in the countries of the Association. In particular, it is alleged that this trend is mainly conditioned by the high level of industrial development and services sector, a significant innovative potential in a number of ASEAN countries (Singapore, Malaysia, Thailand, Indonesia), which turns them into large technological and production hubs in the Asia-Pacific region. Beyond that, China’s increased interest in investing in Vietnam, Malaysia and Indonesia is also dictated by the degree of involvement of states in the Chinese «Belt and Road» initiative (BRI). 

The article also examines the problem areas within the ASEAN-China FTA, as well as the main «growth points» that help strengthen bilateral trade and economic ties. The former includes growing fears among ASEAN countries over further trade liberalization under the FTA agreement, Beijing’s use of unfair competition practices and China’s lobbying for more active use of the yuan in trade settlements with ASEAN member states. The prospects for strengthening ASEAN’s positions in trade with China are in turn related to the overall economic recovery of the Association, the positive demographic changes in ASEAN, the growth of the urban and middle class in China, the boom of online trade in ASEAN and China and the promotion of the BRI.

The paper concludes that ASEAN-China FTA serves as an example of an effective form of trade and economic cooperation, allowing both sides of the agreement to successfully advance their strategic interests.

KeywordsASEAN, China, FTA, FDI
Publication date20.12.2018
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