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中亚南亚经济圈的能与不能

21世纪经济报道 　2005-05-25 16:34:50




　　西域通途·喀什
　　　　
　　目前，我们的黄金、锡、银等有色金属产品特别多，但是没有完整的开采工艺，所以也希望中国商人来我国投资加工这些产品。我们非常需要中国的专家和技术。
　　
　　经济圈的发展都是在要实现“全球化”、“区域经济一体化”的基础上发展的，首要的就是成立自由贸易区，这是全球规律。
　　
　　对话采写：
　　本报记者　唐韶葵　吴迪　阴雪
　　对话嘉宾：
　　孙壮志　中国社科院俄罗斯东欧中亚研究室主任
　　丁力　广东省社会科学院科研处处长
　　卡孜沙木西丁　巴基斯坦西北边境省中巴友谊协会主席
　　阿里木沙　巴基斯坦比沙瓦尔市市长
　　阿里巴哈索夫·布依买买提塔吉克斯坦投资和发展商
　　贸联合社主任
　　齐达扬娜　哈萨克斯坦工商联合会副主席
　　5月18日，在喀什地区会议中心召开的“2005’中亚南亚城市经济合作论坛”上，来自中亚南亚国家的政府官员、专家和企业家充分探讨了该地区的市场需求及良好广阔的城市经济合作前景。喀什在中亚南亚经济圈经贸发展的核心价值成为关注焦点。
　　
　　多边共赢的前提
　　《21世纪》：如何看待喀什作为中亚南亚经济圈的重心城市概念？
　　孙壮志：由于目前还没有具体的多边经济合作项目，中亚南亚经济圈只是一个目前在地图上无法具体标示出来的经济圈，是一个概念之中的跨国的多边合作经济圈。
　　从更广泛的区域经济一体化角度来看，因为地理位置优势，喀什作为中南亚经济圈的重心，更为合适，更有吸引力。相对于上海合作组织等经济合作组织来说，中亚南亚经济圈是具体化的。从喀什角度而言，已经开始有一些国际化动作(例如建立一个公共市场，即自由贸易区)的想法。
　　阿里巴哈索夫·布依买买提：中国的发展速度在当下是处于世界前列的，以后新疆地区就是连接中国内陆与中亚各国的桥梁，而喀什的发展将带动塔吉克斯坦的发展，因此，我们对于喀什占据中亚南亚经济圈核心地位是赞同的。
　　我们也是上海合作组织五个成员国之一，我认为建立自由贸易区的前提应当是五国先联合海关、边建等机构拿出可行的合作方案。听说巴基斯坦和伊朗也想加入，相信他们的加入将令组织更加巩固和更具实力。
　　阿里木沙：中巴两国之间正在酝酿建立自由贸易区，这样一定能刺激供求关系。两国经济有很强的互补性，中国的商人可以获得他们想要的利益，巴基斯坦的商人也可以补充他们的商品种类，还会将烟草、食品、香水等商品带到中国来卖。而对于有可能享受税收优惠的农产品，作为巴基斯坦比沙瓦尔市的市政官员，我认为巴基斯坦的农产品进入中国会使农民受益很多。
　　齐达扬娜：1996年，我曾组织商业团体到过乌鲁木齐，在我眼里，新疆由于地理位置上的特殊性，给贸易带来了许多便利，在这里做生意也成为哈萨克斯坦人最为惯常的一种选择。事实上，作为工商会的负责人之一，近十年来我一直为了促进两国之间的贸易而努力。通常我们所采用的方法是办展览，几乎每一年都会举办与中国相关的贸易展会。
　　2003年，我曾到过广州，在这个经济比较发达的城市，我感受到了更为活跃的商业气氛，这一点与新疆很不同，也很具有吸引力。但是，由于路程限制，我们的企业直接渗入的条件还不成熟，而新疆地区在这一点上则有很大优势，这也是新疆地区占了中哈贸易80％份额的主要原因。此外，语言相近的作用也不可忽视，几乎每一个想在中国投资的企业都会告诉我，他们希望离新疆近一点，只有在新疆的投资才能让他们感兴趣。
　　《21世纪》：喀什的优势是什么？孙壮志：喀什的优势在于，他是新疆最西部的城市，也是南疆地区最大的城市。喀什有888公里长的中国陆地边界，与印度、巴基斯坦、阿富汗、塔吉克斯坦、吉尔吉斯斯坦5国接壤，与乌兹别克斯坦、土库曼斯坦和哈萨克斯坦也非常接近。
　　所谓“五口通八国”，喀什有四个陆路口岸(卡拉苏口岸、红其拉甫口岸、吐尔尕特和红其拉甫口岸)和一个空中口岸(喀什至伊斯兰堡国际航线)。此外，今年中、巴、塔、吉四国已经签署了联运协议。遗憾的是，四国公路联运至今仍未开通，原因是货运量太小。
　　卡孜沙木西丁：我这次来有很多目的，首先就是参加第一届中国喀什贸易洽谈会，签署喀什同巴基斯坦城市阿巴特巴德结成兄弟友好城市的协议，因为这两个城市都坐落在丝绸之路上，都有十分悠久的历史，相互之间具有很强的互补性。为了进一步加强我们与喀什的合作伙伴的友好关系，几天前我们双方签署了一个谅解备忘录。
　　在成功组织了第一届中国喀什贸易洽谈会后，旅游节的举行将再一次引起世界注意。喀什地区的有关领导、旅游节的组织者们为举办这次旅游节所做出的努力是令人钦佩的，他们的工作必将会使不久以后的喀什更加美丽富饶。
　　巴基斯坦西北边境省将全力支持这次旅游节的举办，我将为喀什方面在西北边境省的首府白沙瓦建立办事机构提供方便，组织两地游客的互访，通过这一系列活动来促进两地旅游业的蓬勃发展。
　　
　　发展阻力
　　《21世纪》：喀什如何实现其在中亚南亚经济圈的核心地位？
　　孙壮志：目前喀什的发展方向就是经贸，立足于长期国际贸易。过去很长一段时间内，喀什担当的是内地商品中转站、集散地的角色，现在到了要提升自己的时候了。
　　但喀什也面临竞争，基础设施建设上，北疆地区已经走在前面。
　　而喀什的优势在于文化、旅游，以及水果、动物等特殊产业，对中南亚其他国家而言，还是有产业基础的。
　　目前喀什需要做的是将自身的发展融于国家的发展战略之中。过去南疆以稳定为主旋律，经济发展相对于北疆地区略为落后，现在喀什可以说是赶上了发展的时机。第一届喀交会的成功举办就表明，喀什正向贸易中心、物流中心甚或商品信息中心一步步迈进。
　　喀什语言与中亚国家有相通的地方，内地来的企业不会与边境国家交往，而喀什本土商人则可以利用语言优势，获得更多客户与渠道。对于周边经济发展比中国落后的国家而言，喀什能起到一个带动的作用。
　　以上都是喀什的条件，而喀什要成为这个经济圈的中心，必须要搭建自由贸易区，这是经济区域最初步、最简单的一环。虽然北疆有丰富的油气资源，但大部分城市不与邻国接壤，喀什的通道作用就此得到体现。
　　丁力：喀什要成为区域经济核心，必须具备较大的经济总量、较高的发展水平以及较强的辐射能力。
　　喀什目前人均GDP5000元左右，约为全国平均水平的一半，属于经济发展较低的水平。尽管有旅游业与边境贸易等开放型经济活动存在，但在总体上，由于地处边陲，经济与社会的发展，尤其是工业化进程相对独立与封闭。如果不改变这种现状，喀什的经济与社会要在短期内获得快速发展难度很大。积极融入周边地区进而形成以我为核心的中亚经济圈是喀什经济可能快速发展的惟一选择。
　　很明显，喀什现时提出构建“中亚南亚经济圈核心”的主要意图是开拓或占有中亚市场。浙江“小商品大市场”的经验值得喀什借鉴。只有通过建立覆盖中亚12亿人口的大市场，喀什才能为工业和社会经济发展奠定基础，从而确立核心地位。
　　喀什还可以学习广东经验，让所有来喀什的人都有赚钱的机会。这样，将走出去和引进来有机结合，将国内市场与国际市场有机结合，将本地力量与外地力量有机结合，最终形成喀什经济发展的合力。另外，喀什要在短期内创造经济奇迹，首先得在特区市场上下功夫，首先需要获得中央政府的大力支持。
　　《21世纪》：喀什的阻力是什么？孙壮志：中亚南亚经济圈的概念提出后，对喀什的邻国均有吸引力，但这些国家并不重视喀什的中心地位，政治因素是阻力之一。作为一个资源平台，喀什的魅力也许远远不如乌鲁木齐。
　　喀什的国际贸易状况虽然逐渐显现出其地理优势，但目前还不足以让其成为经济圈内的中心，还需要综合性的优势，例如基础设施、技术人才、对周边国家的认识、对国家政策的解读等等。方向是对的，而到达目标的方式方法有很多样，当下国内经济发展势头很好，这就是契机。
　　各方对喀什的影响都在涌现。现在新疆地区人民对周边邻国的认识远远大于前几年。周边的伊朗、阿富汗、俄罗斯等国家也在响应中亚南亚经济圈。因此，必须把边境的安全稳定搞好，才能实现多边合作。而喀什要做自由贸易区，必须在关税和销售贸易壁垒等方面具有优势，而这一点，是要国家扶持的。
　　相对于长三角、珠三角等区域，喀什的国际贸易通道，通向哪里？这是一个长线视野的问题。喀什是国家边陲，统一的国际通道与经贸合作的国际分工，是最需要先确定下来的。很多研究国内经济的专家都提出把国内经验往国际上推，例如技术密集型的日本把技术传到中国东部，而中国东部又把技术往西部、中亚各国转移。但邻国的政策各不相同，例如哈萨克斯坦的知识技能人才很缺乏，但是为了保持原有的人口结构不发生变化，又限制别国的劳力输入。如果中国与之洽谈自由贸易区，最大的困难就是劳动力问题。
　　上海合作组织所提的第一个经贸合作协议就提到要“贸易投资便利化”，其隐藏的含义就是要实现“人才的自由流动”。而国际经济合作的复杂化，导致了国内经验与国际经验的相悖。
　　经济圈的发展都是在要实现“全球化”、“区域经济一体化”的基础上发展的，首要的就是成立自由贸易区，这是全球规律。而中亚南亚经济圈的成员国对于这一点似乎认识不深，他们对中国的印象甚至还是苏联时期的。这一发展轨迹，无可厚非，有点像东南亚的发展。
　　
　　经贸合作征兆
　　《21世纪》：中亚南亚经济圈内各国的经贸合作有哪些？对各国产生怎样的影响？
　　阿里巴哈索夫·布依买买提：自2004年开通卡拉苏口岸以来，两国之间就开始了正式的经贸往来。塔吉克斯坦东部的戈尔诺—巴达赫尚自治州与喀什的经贸活动最活跃，通过喀什进入塔国境内的主要是建材、电器、通讯、日用品等。
　　卡拉苏口岸是临时口岸，开通至今共6个月(2004年5月－2004年10月开通，2005年5月至今开通)，共有400万－500万美元贸易额。今年开通以来(5月15日－5月20日)，恰好有喀交会，中方政府邀请了塔国19人商务团前来参会，我们共购买了30万美元的货品(建材、基建产品、日用百货等)，由中方派了4辆货车(25吨载重／辆)送出境。
　　塔吉克斯坦与阿富汗之间已经修建一座桥梁，中方可以通过塔吉克斯坦进入阿富汗市场，而塔吉克斯坦则收到了很多电器新产品，尤其是日用品，消费成本也降低了。
　　阿里木沙：巴基斯坦对中国货物、商品的需求量是很大的。中国商品的质量很好而且便宜，所以巴基斯坦当地居民喜欢购买中国商品，主要有衣服、电器、化妆品、水泥、建材。中国的商品在巴基斯坦的市场占有率大致为20％－25％。
　　中国和巴基斯坦只是一条边界所隔，可以说是一衣带水，所以对于中国商人做生意来讲是比较容易的。同时现在也有很多巴基斯坦商人到中国的喀什、乌鲁木齐以及内地的义乌、上海等城市，购置大量商品，然后带回巴基斯坦进行销售。巴基斯坦人对中国货物的质量水平很满意。
　　在经贸发展方面，中国发挥了十分重要的作用，特别是在巴基斯坦的大型工程、市政建设上，中国给予了很大帮助，例如瓜达尔港口的建设。
　　《21世纪》：阿伯塔巴德市和喀什签订的友好协议意义何在？
　　卡孜沙木西丁：喀什有很多古迹，是中南亚地区的中心，喀什和巴基斯坦西北边境省阿伯塔巴德市之间相距不远，交通便利。两市缔结为友好地市以后，两个城市之间可以进行很多贸易活动，互相的商品也可以很轻易地进出。
　　我们同喀什发展友好关系比其他城市更便利，今后两地市将安排活动，在贸易、教育、农业、卫生、特种旅游、文化等方面进行交流，并进行经常性的互访，保持紧密接触，就共同关心的问题交换意见和互通信息。两地签订的友协关系备忘录规定，双方友好协会要致力于协助各自地市政府促进双边友好合作，并为建立更多友好地区、城市做贡献。商业活动在两个城市之间将得到很好的发展，人民可以增进了解，促进中巴的共同利益。同时还有很多互惠互利的协议正在签署之中。
　　《21世纪》：希望中方与各国下一步达成怎样的经贸合作？
　　阿里巴哈索夫·布依买买提：目前塔国并没有产品出口到中方，希望今后能出口皮革、药草、高山蜂蜜、彩色石头、大理石等。目前，我们的黄金、锡、银等有色金属产品特别多，但是没有完整的开采工艺，所以也希望中国商人来我国投资加工这些产品。我们非常需要中国的专家和技术。
　　除了天山山脉、全世界最高最长的帕米尔山脉也在塔国境内。雪山自然资源丰富，有待开采。另外，我们还期望与中方共同发展旅游事业。
　　卡孜沙木西丁：通过此次喀交会我们发现喀什建设得非常快，根据在喀交会上的观察，我们可以获得有益的信息，以确立今后想到中国来做生意的巴基斯坦人的发展方向，这有利于他们到这里来建立工厂企业以及进行其他商贸活动。虽然喀什的环境很好，但与中国其他大城市相比，在公路交通等基础设施建设方面还有待改进。
　　齐达扬娜：我们已经考虑在新疆乌鲁木齐成立一个代表机构，可能会派遣一些官员来，也会考虑由一些在中国有经验的商人来代理。
　　据我所了解，哈国在中国内设厂的企业并不多，其中有一家软饮料公司，名叫RAIMBEK，在新疆的投资很成功。其他与中国合作比较多的企业主要涉及行业集中在重卡、机械、棉花、毛皮、印刷设备以及石油等几个方面。
　　作为一个为企业服务的机构，我们在实际的交易中获得的利益非常有限，但我们所看见的交易中，确实有很多回报很高的投资，因此，我相信中哈两国之间的贸易还将逐步增加。由此，也需要更多的信息辅助，这也是我们下阶段工作的重点。
　　
　　图：　　　
　　孙壮志　　资料图片
　　丁力　　　谷坊　摄
　　卡孜沙木西丁　　唐韶葵　摄
　　阿里木沙　　唐韶葵　摄
　　阿里巴哈索夫·布依买买提　　唐韶葵　摄
　　齐达扬娜　　唐韶葵　摄

Scotsman.com Business - Top Stories - Investors can profit by turning Japanese

Scotsman.com Business - Top Stories - Investors can profit by turning Japanese
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Sun 22 May 2005

Investors can profit by turning Japanese

WEALTH WATCH

JULIE DENT


IN RECENT times, investors have been obsessed with China and India, two of the world's most rapidly developing and populous nations. A host of new funds have been launched and one investment trust has even voted to ditch its Latin American investment remit to make a wholesale leap across the globe and recreate itself as an India investment trust.

Listed western companies are at it as well, talking up their "China/India-related" themes, in much the same way that in the late Nineties businesses stressed how they were set to benefit from the internet.

These markets have enormous long-term growth potential and strategically it makes sense to be overweight in these areas. However, on a tactical basis now may not be the most appropriate time to buy.

Global growth is slowing and higher commodity and oil prices are biting. As bearishness has spread across the globe, investors have been quick to take profits and withdraw from riskier areas such as emerging markets. Despite the sharp falls, emerging markets still look vulnerable over the short-term.

So where else should investors be looking for long-term returns? It may surprise some readers that my eye is on Japan. It is an area where the portfolio of British Assets Trust is overweight. This may sound odd to those with long memories of the dramatic rise and fall of Japan in the Eighties, but after a decade of decline I believe it is time for investors to reassess the opportunities afforded by Asia's most mature economy.

While Chinese growth rates outpace Japan, it is important to understand that in a global context the Chinese economy is still relatively small compared with Japan, the world's second largest economy. As the Japanese economy stops shrinking in nominal terms, a domestic demand-led recovery could reawaken this sleeping giant.

The really positive story about Japan has been the gradual resolution of its structural problems. Firms have been quietly reducing excess capacity and exiting unprofitable businesses. Deflation is clearly easing.

Another major past concern for investors has been the slow progress in resolving Japan's nonperforming loan problem and the lack of demand for loans. Here, also, we are seeing improvements. Asset quality at the major banks continues to improve. While progress is hardly rapid, banks are clearly pulling loans from weak companies and putting pressure on them to restructure. Many companies are still repaying debt but there is demand for loans in the economy, driven by smaller, non-manufacturing firms, mainly in the service sector.

The labour market has also become more flexible with an increasing shift to part-time workers, marking a switch away from the "job for life" culture. A new, younger breed of entrepreneurs and company directors is emerging in Japan.

A sign of the renewed vigour in Japan is the pick up in mergers and acquisition activity as companies restructure. This has been further boosted by corporate regulatory changes that will take affect from 2006 which will enable foreign companies to fund acquisitions in Japan through stock swaps, rather than the current situation where purchase can only be made in cash. Many Japanese companies are urgently seeking to get bigger quickly in order to stave off foreign takeovers.

Japanese companies have also recognised the need to shift up the value chain. China is very important in this respect, providing a low-cost manufacturing base while they focus on new product development at home. This is absolutely necessary given Japan's ageing population and the ongoing fall in the number of workers. Despite the recent tensions between the two countries and anti-Japanese demonstrations in Beijing, China is viewed as an opportunity rather than a threat, and now the two can work together for their mutual benefit.

China needs steel, capital equipment and construction machinery - exactly what the Japanese are very good at making. Hence Japanese exports to China are soaring.

While Japan is not without its problems, they are slowly but surely being resolved. There is no doubt that global trends are important, but that is true of all markets. Valuations are reasonable and profitability is improving. Corporate Japan is rising to the challenge and, crucially, the Japanese themselves are starting to believe that the outlook, after a decade of adjustment, is looking brighter.

Julie Dent is head of global equities at F&C Edinburgh and fund manager of the British Assets Trust plc



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Asian integration: Prospects and challenges

The Manila Bulletin Online May 22, 2005 Opinion/Editorial


TWO Sundays ago, in my inaugural column, I spoke of an emergent "PAX ASIA-PACIFICA," a conglomeration of increasingly integrated Asia-Pacific nations encompassing the whole of both continental and archipelagic Asia — including the Philippines — and stretching as far as the western coast of continental North America, and Australia and New Zealand. A "United States of Asia," akin to a "United States of Europe" or European Union (EU), if there is in fact one to be realized in the not-too-distant future, will be dependent on accelerating such unification or integration – geopolitically and more importantly, at this time, economically – at the same dealing with its inherent obstacles. Such a coming together of Asia is manifested by the emergence of both the ten nations of the Association of Southeast Asian Nations (ASEAN) and of China – as a free trade area whose combined populations will soon reach nearly two billion people, almost a third of the world’s population.


Integration is not a novel idea. Long before "globalization" became a byword, political and business leaders already recognized the value of "strength in numbers." And countries sought – in one way or another – to align themselves strategically with other countries, the better to attain their economic and/or political objectives. In Asia, however, countries have tended historically to shun foreign contacts. Japan, China, and Korea – were prime examples of this tendency. During imperialism’s heyday, Japan and China had to be forcibly opened up to foreign trade.

In our time, of course, political, economic, and security groupings are organized no longer by force but by shared interests. Integration nowadays is a compact based on the weighing of costs and benefits. And the main stimulants of regional integration is the development of a global financial market, the establishment of worldwide supply chain networks, and the revolution in information and communications technology (ICT).

Europe and the Americas were the first to form regional blocs. In Asia, political, religious, cultural, geographic, and social diversities prevented integration from taking off so easily. Everywhere, of course, it took visionary leaders to look beyond the inherent differences among countries – and to focus instead on their commonalities.

ASEAN in the beginning

The establishment of ASEAN – the Association of Southeast Asian Nations – illustrates this point. In forming ASEAN in August 1967, Southeast Asian statesmen literally took a leap of faith. At the time the five original members of ASEAN agreed to get together, Indonesia was in a virtual state of war with both Singapore and Malaysia as a result of konfrontasi. Meanwhile, Manila and Kuala Lumpur were estranged over Sabah. In fact, Jakarta and Kuala Lumpur did not even have formal diplomatic relations when they signed ASEAN’s Charter in Bangkok, on August 8, 1967. While ASEAN’s initial motive was principally political, it responded in due time to its need for economic integration – by approving in principle in 1992, the ASEAN Free Trade Area (AFTA).

Now, more than a decade later, the integration of East Asia is slowly becoming a reality. Step-by-step agreements have been arranged that provide neighborly assistance to East Asian countries in distress. For example, we now have the "Chiang Mai Initiative." This makes possible bilateral currency swaps meant to provide countries caught in a financial crisis with additional liquidity to stave off another 1997-type turmoil. Nowadays, bilateral trade pacts not only eliminate trade barriers. Often enough, they also encourage broader areas of cooperation. For instance, the Japan-Singapore Economic Partnership Agreement (EPA) encompasses not only trade and investment but also technical cooperation, information and communications technology, energy, science and technology, human resource development, employment and labor management relations, small and medium enterprises, broadcasting, and tourism. Trade facilitation – through the harmonization of standards, national treatment, and capacity-building – has become the by-word in bilateral and regional economic arrangements. Bilateral agreements are becoming a practical way of overcoming the delays and difficulties besetting multilateral consensus under the World Trade Organization (WTO). Of course, economists still agree that multilateral liberalization is the ideal approach to global trade that mutually benefits the rich and poor countries.

In the hubs-and-spokes model of preferential trading agreements, ASEAN has become the core of East Asian integration. Even Asia’s most powerful economies clearly see the potentials of integration with ASEAN. For one, ASEAN member-states have moved significantly to lower intra-regional tariffs. Already the six earlier ASEAN member-countries have reduced 99% of the products in their Common Effective Preferential Tariff (CEPT) inclusion list to within the 0-5% tariff range. The newer members – Vietnam, Cambodia, Laos and Myanmar – have carried out almost 80% their CEPT commitments. Since the two major economies in the East Asian Economic Grouping – Japan and China – are also political rivals, ASEAN is likely to become the centerpiece of East Asia’s emerging preferential trade agreements. ASEAN plus China is firmly in place, with ASEAN plus Japan, then ASEAN plus Korea, and possibly ASEAN plus India standing in the wings. But if it is to play this key role, ASEAN must quickly become more competitive, more unified, and more closely integrated than it is now. Integration is an area where ASEAN has far from reached its full potentials. Indeed, various studies indicate that ASEAN is losing its competitive edge. And the bulk of the blame lies in ASEAN’s inability to integrate fully within its AFTA framework.

In a 2004 study, McKinsey’s Quarterly pointed out emphatically that ASEAN could no longer compete with China and India in labor costs. To regain its competitiveness, the consultancy firm recommended that Southeast Asia economies raise workers’ productivity and cut costs across the supply chain in order to attract Foreign Direct Investments (FDI), boost demand, and increase regional exports. The McKinsey study pointed out that ASEAN must also find a way to reduce tariffs and non-tariff barriers that raise the costs of doing business across the region. In addition, ASEAN consumer prices – which, in theory, should converge towards a standard floor level in an integrated free trade area – have continued to be highly divergent with an average variation of 31% across our sub-region. McKinsey’s says ASEAN is paying the price of fragmentation, since the costs of transacting business in Southeast Asia contrast poorly with China’s relatively better-integrated economy. As a result, ASEAN firms cannot fully take advantage of the economies of scale their internal market of nearly half a billion people theoretically gives them. In October 2003, the ASEAN countries agreed to create a Common Market by 2020. The member-states committed themselves to accelerating the pace of integration in eleven priority sectors. They also drew up a "road map" to guide them toward their vision of an ASEAN Economic Community.

China As the Catalyst For Asian Integration

Undoubtedly, China’s fast-growing economic, military, and political power is helping drive Asia toward regional integration. The Asian states all seek to mitigate business competition from China, while benefiting from its illimitable market. The framework for comprehensive economic cooperation that ASEAN and China signed in November 2001 immediately expanded two-way trade. In 2003, China’s exports to ASEAN increased by 31.2%, while its imports grew by 51.8%. The "ASEAN-10 plus China" free trade area is scheduled for completion by the year 2010. By that time, it will encompass a market of more than 1.7 billion people, a collective GDP of almost US$2 trillion, and intra-regional trade of US$1.2 trillion. ASEAN is also negotiating economic partnerships with Japan and Korea, India, and Australia-New Zealand. In this regard, we must always remind ourselves that, despite Japan’s economic slowdown in recent years, it remains as ASEAN’s top export market, its number one source of investment capital and most generous donor of official development assistance (ODA). Japan’s economy still is roughly eight times larger than ASEAN’s – and about five times larger than China’s.

What do these changes in China mean for the rest of us in Asia, especially Southeast Asia? East Asian economies that are complementary with China’s – like those of Hong Kong, Taiwan, and to a lesser degree, Singapore, South Korea, and Japan – are benefitting from China’s integration with the global economy. Given the downturn in ASEAN’s traditional markets, China has emerged as an engine of growth for Southeast Asia. If current trends continue, China will soon surpass America’s total trade with our sub-region. But, the ASEAN countries also face competitive challenges from China itself on many fronts.

The most immediate is competition in labor-intensive industry. China’s labor costs are the lowest in the whole of East Asia – outside of Indonesia’s. Already China has become the pre-eminent producer of labor-intensive manufactured goods in the world. A second front in ASEAN-China relations is the competition for capital. At the beginning of the 1990s, Southeast Asia was taking in 61% of all Foreign Direct Investment (FDI) flowing to developing economies in East Asia – while China was receiving only 18%. Ten years later, it is China that was gaining 61% of FDI, while ASEAN’s share had dropped to a mere 17%. In 2002, FDI going to China (which now makes up nearly four-fifths of all the FDI coming into East Asia) surpassed that going to the United States – traditionally the number one destination for migratory capital.

Competition between China and ASEAN for third-country markets has also become intense. The export structure of the more-developed ASEAN economies – just like China’s – is built around electronic products, but China is now both a more efficient and lower-cost producer of electronics. In 1990, China had only a 2% share of American electronics imports. By 2000, its share had reached 9.7% – topping those of Singapore, Malaysia, Thailand and the Philippines together. A fourth China-ASEAN arena is competition on the value-added chain. For China’s competitors, therefore, the only viable long-term strategy is to move up the technology ladder – keeping always ahead of China’s lower-cost manufacturing. But the ASEAN economies are finding this difficult – because China is large enough, and sophisticated enough – to be able by itself to enhance every link on the production chain. Since China has such a large domestic market, its corporations enjoy built-in economies of scale. Already, China’s larger corporations are moving up the value chain – into sectors where Chinese products could challenge even the western and Japanese manufacturers that now supply the capital goods for China’s light industries. If it is to compete with China – and with all other comers – ASEAN must raise worker productivity and cut costs across the board. And the only way it could do so is by integrating the Southeast Asian market more effectively than it is doing now – to gain economies of scale, force convergence toward regional best practices, reduce transaction costs, and create a unified market attractive to foreign investors.