An Assignment On Sino-ASEAN Bilateral Cooperation

With China's dynamic economic growth, its relations with the Association of Southeast Asian Nations (ASEAN) states have expanded rapidly in recent years, culminating in the conclusion of the landmark China–ASEAN Comprehensive Economic Cooperation Agreement in 2002. Sino-Southeast Asian economic relations are far from impressive[1]. It has been argued that the fundamentally competitive rather than complementary structures of the economies of the two sides have prevented significant growth in trade and investments from taking place, with the possible exception of China-Singapore ties. The economies of the two sides differ markedly in at least three respects: size, economic system and economic development strategy. It has been noted that the ASEAN economies have a higher dependence on trade than does China, with China's trade/GDP ratio at 37% in 1991. This compares with 47% for Indonesia and the Philippines and 148% for Malaysia, although it is not clear how this it can be an obstacle to trade between the two sides. Both sides experience high rates of growth they have also become more differentiated in terms of comparative advantages and at the same time, more interdependent with the global market. For example, the expanded ASEAN just before the July 1997 financial crash was projected to have about two-thirds of Japan's economic strength, with its gross national product of $1.6 trillion. This was deemed to have opened up future opportunities for mutually beneficial exchanges with China's own huge economy.

However, the degree of integration and interdependence between the two sides did not significantly increase. Their mutual trade remained a low percentage of each side's total trade. The same was true for investments, ironically for the reason that their respective trade and investment relations with other partners also increased significantly.
Before the 1990s, there was no official relationship between the ASEAN as a grouping and China, although China had official relations with certain individual ASEAN member states on a bilateral basis. From the late 1980s, China intensified its efforts to establish diplomatic relationship with all the remaining ASEAN states as the final step, leading to its eventual official relationship with the ASEAN grouping. In his visit to Thailand in November 1988, Chinese Premier Li Peng announced four principles in establishing, restoring and developing relations with all the ASEAN states. After establishing diplomatic relations with the last ASEAN country —
Singapore — in late 1990, China pushed for official ties with the ASEAN grouping. On 19 July 1991, Chinese Foreign Minister Qian Qichen attended the opening session of the 24th ASEAN Ministerial Meeting (AMM) in Kuala Lumpur as a guest of the Malaysian Government, where he expressed China’s interest in cooperating with ASEAN, particularly in the field of science and technology.[1] The latter responded positively. In September 1993, ASEAN Secretary-General Dato’ Ajit Singh visited Beijing and agreed to establish two joint committees, one on co-operation in science and technology, and the other on economic and trade co-operation. An exchange of letters between the ASEAN secretary-general and the Chinese Foreign Minister on 23 July 1994 in Bangkok formalized the establishment of the two committees. At the same time, ASEAN and China agreed to engage in consultations on political and security issues at senior official level.[2] In July 1996, ASEAN accorded China full Dialogue Partner status at the 29th AMM in Jakarta, moving China from a Consultative Partner, which it had been since 1991. By early 1997, there were already five parallel frameworks for dialogue between China and ASEAN. China participated in a series of consultative meetings with ASEAN. In December 1997, Chinese President Jiang Zemin and all the ASEAN leaders had their first informal summit (ASEAN plus One) and issued a joint statement to establish a partnership of good neighborliness and mutual trust oriented towards the 21st century. ASEAN-China trade has expanded rapidly, at an annual growth rate of about 15 per cent since 1995, and it jumped by 31.7 per cent in 2002 to US$54.77 billion. ASEAN is now the fifth largest trade partner of China while China is the sixth of ASEAN

[1] Sheng, Lijun (2007), “Forty Years of ASEAN: Relations with China”, paper delivered
at International Conference of “ASEAN 40 Years: Review and Prospect”, Peking
University, Beijing, 15th-17th November.
[2] ibid

[1] Zhao, Jianglin (2007), “Recent Development of China-ASEAN Trade and Economic Relations: From Regional Perspective”, paper for International Conference on “ASEAN-China Trade Relation: 15 Years Development and Prospects”, Hanoi, 6th-8th December.