In this Op-Ed in China Daily, “FTA pushes ASEAN ties,” an associate professor at the School of International Studies of Nanjing University had these interesting statistics about the trade volume between China and ASEAN countries:
A much-anticipated free trade area (FTA) between China and the regional bloc was formally launched in early 2010, which, with a $4.5 trillion trade volume, ranks as the world’s third largest trade zone. The bilateral trade value in the first half of this year reached $136.5 billion, an increase of 55 percent year on year, and the figure for the full year is expected to total $250 billion.
I blogged about the FTA at the beginning of this year, “Xinhua: “China-ASEAN free trade area starts operation”.” What I find the more impressive is given the current global recession, trade between China and ASEAN is actually roaring. My guess is the trade volume may end up well above $250 billion by the end of 2010. Especially if protectionism escalates between the U.S. and China, then bilateral trade between China and ASEAN will exceed the former. In the long run, I expect China-ASEAN trade volume to also be bigger.
When I visited Yunnan a couple of years ago, I experienced firsthand the magnitude of the trade. We were driving along a highway and noticed a nonstop convoy of trucks going one way. Later upon crossing another, we saw another. Oh yes, the driver told us (me and my wife), that first road goes to Vietnam. This one here goes to Myanmar. It’s been busy like that for the last 5 or so years…
The roads were new but sections already appeared worn from the heavy traffic. There were plans to widen and update the roads already…
Furthermore, at a grand level, China’s trade with the world in 2009 amounted to $2.2 trillion. Of that, $298 billion was with the U.S.. The U.S accounts for only 14% of China’s trade activities. The 2009 trade volume between China and Japan, South Korea, Hong Kong, and Taiwan added to $666 billion – more than doubling that with the U.S.. (These are PRC numbers, but the relative scale should be the same even using the U.S. stats.)
r v says
I think many of us have long predicted the eventuality of ASEAN trade increases.
I also think perhaps, in some sense, the old US model of prosperity was simply temporary, and we are witnessing the decline of US economy as a “return to normalcy” in a balanced world situation.
Consider that US’s boom days of the 1950’s was largely build upon a model of US exporting greatly all over the world.
Once the other world nations increased their trade without going through US, (such as in ASEAN countries), US lost its edge in world trade.
ASEAN-Asia trade is natural, because of geographic proximity. It simply makes sense.
*I heard another interesting bit about US economy. One expert’s opinion is that US is too heavily dependent upon very low skilled service industries currently, and that is one major reason why it can no longer compete with the rest of the world. (In the past, the low skilled services in US could be paid well, because the high tech and manufacturing jobs can feed the service industries. But once the high tech and manufacturing jobs started to outsource, the services industries in US suffered as well.)
Well, it’s also natural that the other countries will not pay some Americans high living wages for answering phones in customer service centers.
china is an economic chimera in its own league. on one hand, it is a developing country, with characteristics similar to the Asean members, which vary from the advanced (Singapore) to the poor (Cambodia).
on the other, it is a newly-industrializing economy with affinities to similar such as SK or even developed Japan.
This duality is a win-win situation for all sides, as seen in the booming trade ties; some Indonesian businessmen, reportedly cautious about their competitive edge, wanted to delay the FTA in full.
The Malaysian govt swept aside similar reservations to implement the agreement.
As the East Asian region moves slowly towards economic integration, the role of the United States in this neck of the woods will need to adjust to new realities.
Most countries, inc probably even China, would welcome an American presence as a contribution to the vitality of the region.
But how that presence shapes up remains to be seen. Will it create tension, in order to justify its role – as seen by some from this side of the world – or promote peace, as it insists on presenting itself, esp to its own people?