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NEWS UPDATES 18 April 2010

Asean-China FTA woes need to be resolved

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There are still challenges and difficulties that need to be resolved between the member countries of the Asean-China Free Trade Area (ACFTA) to tap the benefits of the coalition, Malaysian business daily the StarBiz quoted Bank of China (M) Bhd chief executive officer Zheng Jingbo as saying.

He said since the setting up of ACFTA, competition between member countries and cross-border investment opportunities had increased. To avoid vicious competition, investing activities must be conducted in an orderly manner.

“Overlapping of businesses or industries would also exist as China and Asean are still considered developing countries,” he said in his public lecture on “China-Asean Free Trade Area: Dancing With Opportunities and Challenges”, which was organised by Universiti Tunku Abdul Rahman Saturday.

He also said the uncertainties or internal dispute among some of the Asean countries, if not addressed properly, would affect the business activities in the ACFTA.

Zheng, who is also chairman of China Enterprises Association in Malaysia, said the effectiveness of ACFTA would help internationalise the yuan and promote it to be a regional currency.

“The conditions for yuan to be international have been set, given the accelerated growth of the Chinese economy and its economic strength as well as the improved international credibility and stability of the currency,” he said.

ACFTA, which came into effect on Jan 1, is the world’s biggest trade area by population with a consumer market of 1.9 billion.

On the poor interest in Chinese companies listed on Bursa Malaysia, Zheng said it was due to lack of understanding and information among local investors.

“Investors have to understand the businesses in order to realise the potential of particular companies,” he said.

For Chinese companies that were interested to invest in Malaysia and vice versa, he said understanding the business nature and the policies of the Government were crucial before making business decisions and it was important to reduce the investment risk.




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