Folk dancers at the 8th China-ASEAN Expo, held in Nanning, capital of
Guangxi Zhuang autonomous region, in October, 2011. The annual expo was
initiated by Premier Wen Jiabao in 2003 as a platform to promote trade ties and
good-neighborly relations. During the first half of the year, Chinese companies
invested as much as $1.49 billion in ASEAN, up by 34.3 percent year-on-year.
China's investments into members of the Association of Southeast Asian
Nations will increase greatly in the long term, a result in part of Chinese
companies' greater determination to invest abroad, said Gao Hucheng,
vice-minister of commerce, on Friday.
"Greater cooperation on
investment will lead to mutual benefits for China and ASEAN," Gao said
during a news briefing at the 9th China-ASEAN Expo and the 9th China-ASEAN
Business and Investment Summit.
Gao said there is a
"possibility that some individual Chinese projects could be affected by
the world economic situation and foreign governments' policies and markets for
some definite period of time". Even so, he said, the effects will be
"temporary" and will not overshadow China's investments in ASEAN.
Some ASEAN countries, including
the Philippines and Vietnam, have entered into disputes concerning the
sovereignty over islands in the South China Sea. The disagreements could affect
economic and trade relations between China and ASEAN, experts said.
During the first half of the
year, Chinese companies invested up to $1.49 billion in ASEAN, up by 34.3
percent from a year earlier, according to the Ministry of Commerce.
By the end of June, China's
cumulative investment in the region reached $18.8 billion, of which "more
than 70 percent" was made during the past four years, Gao said.
"From the long-term
perspective, we are confident that China's investments in ASEAN will increase
quickly, in light of the trust" that exists between the two sides and the
ways in which their economies strongly complement each other, Gao said.
China and ASEAN signed the
Framework Agreement on Comprehensive Economic Cooperation in November 2002,
marking the beginning of the China-ASEAN free trade agreement.
The pact called on China and
ASEAN to remove restrictions that limit their investments into each other.
There are vast opportunities for
the two sides to cooperate more on transport, tourism, power, machinery,
household appliances, textiles and mining, Gao said.
China and ASEAN are
"discussing or moving toward establishing a series of large cooperative
projects in infrastructure, agriculture, manufacturing and processing".
As part of its 12th Five-Year
Plan (2011-2015), the Chinese government is encouraging domestic companies of all
types to invest abroad through mergers and acquisitions.
In 2011, China's outbound direct
investment increased by 1.8 percent year-on-year to $60 billion. And the first
half of this year has seen it rise by 48.2 percent year-on-year to $35.42
billion.
Also in the first half, countries
and regions including Hong Kong, ASEAN, the United States and Russia witnessed
the amount of capital they receive from China increase by double-digit
percentages.
"Indonesia, Thailand and
Cambodia led the way in the ASEAN region" in absorbing Chinese investment,
Gao said.
Gao attributed the increase to
Chinese companies' greater ability to compete in capital, technology, design
and management, the "comprehensive policy system" established by the
Chinese government, "strong complementary areas" and the
"dynamism of Southeast Asian economies".
While Chinese ODI is expected to
increase in the years ahead, emerging markets in the ASEAN region, Africa and
Latin America will be attractive to Chinese companies, Chinese experts and
officials said.
By 2011, China had been the
largest trade partner for ASEAN for three consecutive years, and ASEAN has
overtaken Japan to become the third- largest trade partner of China. China is
also the fourth-largest export market for ASEAN, and its third-largest source
of imports.
Meanwhile, ASEAN's direct
investments into China have been increasing. In 2002, the region invested $3.26
billion in China, and the amount increased to $7 billion in 2011.
Chinese financial institutions
have been adopting financing conveniences to encourage investment between China
and ASEAN members.
In 2009, the Chinese government
announced it would provide $15 billion in loans to ASEAN nations in the next
three to five years. Last year, the country said it would add $10 billion to
that total.
Ding Qingfen
Business & Investment Opportunities
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