ASEAN KEY DESTINATIONS
China's investments into Asean to surge
"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 US$1.49 billion in Asean, up by 34.3 per cent 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 per cent" 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 per cent year-on-year to $60 billion. And the first half of this year has seen it rise by 48.2 per cent 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.
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.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below