China's has big appetite for Asean's goods

NANNING: China's hunger for goods from Asean is expected to continue and this spells opportunity for Malaysian exporters.

China is already Malaysia's largest trading partner with trade at US$36.3 billion (RM114 billion) last year. It has also signed its first-ever free trade pact with the Asean grouping.

"The Chinese government encourages imports from Asean, of which annual import value has exceeded US$1 trillion (RM3.13 trillion) for two straight years.

"We expect such momentum to accelerate," the China-Asean Expo (Caexpo) secretariat's secretary-general Zheng Jun Jian said. He was speaking to reporters at the seventh Caexpo promotional conference here yesterday.

Under the trade pact, known as the Framework Agreement on Comprehensive Economic Cooperation, 90 per cent of goods traded between China and the six original Asean members - Malaysia, Brunei, Indonesia, the Philippines, Singapore and Thailand - are tax-free from this year.

The other four Asean members, namely Cambodia, Laos, Myanmar and Vietnam, will only enjoy this tax-free trading environment on goods from 2015.

This year's Caexpo, an event which started in 2004, will showcase exhibitors from the food and beverage industry, small- and medium-scale enterprises, and the services sector, such as construction, property investment, port management and logistics, education and tourism.

It will be held here from October 20 to 24. Zheng is expecting 30,000 buyers to visit. Last year, Caexpo attracted 2,450 exhibitors and concluded sales of US$1.65 billion (RM5.16 billion). China's Ministry of Commerce has listed Caexpo as one of its major trade fairs. The Caexpo series is the only international expo jointly sponsored by the governments of China and Asean.

Malaysia External Trade Development Corp (Matrade) is coordinating Malaysia's participation. This year, Caexpo aims to further promote the China-Asean Free Trade Area (Cafta) and bring about opportunities for growth in investment cooperation and trade services. The Cafta market covers 1.9 billion people.

As Asia's biggest economy, China is committed to growing trade and investment with Asean. Last year, it allocated US$25 billion (RM78 billion) for two separate funds. 

The first was a US$10 billion (RM31 billion) China-Asean Investment Cooperation Fund administered by The Export-Import Bank of China.

The second initiative, which spans the next five years, sees Chinese banks offering loans amounting to US$15 billion (RM47 billion) to Asean countries, with preferential terms such as lower payback rates. Businesses in Asean are also encouraged to apply for the cheap loans through the Chinese embassy in their respective countries.

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