What Is Asean China Free Trade Agreement
Since ACFTA came into force, China`s share of total ASEAN merchandise trade has increased from 8% in 2004 to 21% in 2018. The ASEAN region, with its total population and strong growth potential, continues to offer many opportunities for businesses. ASEAN members together have a population of more than 650 million. Indonesia accounts for more than 40% of the region`s population and its population has been the most opposed to the agreement.   As more and more countries appear to be opting for increasing protectionism, the Southeast Asian region and China are actively working to build stronger regional and global trade and investment relationships. In addition, China and ASEAN are also working quickly to conclude the Comprehensive Regional Economic Partnership (RCEP) agreement, which aims to promote trade and economic integration between ASEAN members and their six trading partners, namely China, Japan, South Korea, Australia, New Zealand and India. The framework agreement was signed by eleven heads of government on 4 November 2002 in Phnom Penh, Cambodia. : Hassanal Bolkiah (Sultan of Brunei Darussalam), Hun Sen (Prime Minister of Cambodia), Megawati Soekarnoputri (President of Indonesia), Bounnhang Vorachith (Prime Minister of Laos), Mahathir bin Mohamad (Prime Minister Minister of Malaysia), Than Sh (Prime Minister of Burma), Gloria Macapagal-Arroyo (President of the Philippines), Goh Chok Tong (Prime Minister of Singapore), Thaksin Shinawatra (Prime Minister of Thailand), Phan Ven Khi (Prime Minister of Vietnam) , Zhu Rongji (Prime Minister of the State Council of the People`s Republic of China).   In the China-ASEAN Strategic Partnership Vision 2030 adopted last year, the two sides agreed to reach a target of $1 trillion in bilateral trade and $150 billion in investment by 2020. The WIG agreement, signed on 29 November 2004, is one of the enabling agreements under the framework agreement. It has set the terms and conditions for reducing and eliminating tariffs for tariff lines either on the normal route or on sensitive rail.
The economic ties between aSEAN and China are moving in a new direction. In November 2001, ASEAN and China agreed to conclude a free trade agreement between ASEAN and China in ten years. More than a strategic step to show China`s interest in Southeast Asia, there are implications of such an agreement. There should be net trade benefits for both parties: the creation of trade would compensate for trade diversion, with ASEAN being slightly diverted, while the same trade shift would not be obvious to China. Given Indochina`s strong growth, it would appear that China would need more inputs and that it could provide ASEAN with an alternative source of inputs for natural resources and inputs into a free trade agreement. BOTH ASEAN and China`s hope for prosperity will be closely linked to their external orientation and the role of developed countries in providing more opportunities and thus creating a stronger foundation for growth and stability. A new free trade agreement has also opened up a debate on the possible creation of an “Asian Economic Community”. In the absence of an end to the trade war between the United States and China, the updated protocol of the ASEAN-China Free Trade Agreement also allows China to have better access to the entire neighbouring region and to diversify its focus from the European and American markets. In 2002, China and ASEAN countries signed the Framework Agreement on Global Economic Cooperation, which formed the legal basis for the creation of the ASEAN-China Free Trade Area (ACFTA).
Under the ACFTA, these are three agreements for the free movement of goods, services and investment. The ASEAN-China Investment Agreement was signed on 15 August 2009 and came into force on 1 January 2010. It aims to create an environment conducive to investors and their investments from ASEAN and China and thus establishes essential safeguards that ensure fair and equitable treatment of investors, non-discriminatory treatment in the event of nationalisation or expropriation and