ASEAN-China Relations: Realities and Prospects

19. Business Environment and Opportunities in Shanghai

Business Environment and Opportunities in Shanghai 273 19 Business Environment and Opportunities in Shanghai Zhang Youwen RAPID ECONOMIC DEVELOPMENT PROVIDING OPPORTUNITY FOR COOPERATION BETWEEN ASEAN AND CHINA China’s twenty-five years of reform has witnessed rapid development in foreign trade. Since the 1990s, especially with the FTA between ASEAN and China being put forward into the agenda, the economic and trade relationship between the two parties has experienced even more rapid development. Like the United States, Japan and the EU, ASEAN has become equally important and will become an increasingly important trade partner for China. ASEAN has been one of the most important trade partners of China. From 1995 to 2002, the bilateral trade volume has increased annually at the rate of 19.1 per cent. The high growth rate has been maintained even though the global trend has been moving in the opposite direction as a result of the global economic depression and “9/11” event. In 2002 the bilateral trade volume broke the historical record, reaching US$54.8 billion with the growth rate as high as 31.8 per cent. According to the statistics, ASEAN has become China’s fifth largest trade partner, with the bilateral trade volume accounting for 9.2 per cent of China’s entire foreign trade volume, next only to Japan, the United States, EU and Hong Kong (Table 19.1). 19 ASEAN-China Relations Ch 19 5/8/05, 9:06 AM 273 274 Zhang Youwen Noticeably, ASEAN has been more important as an import source to China than as an export market. In 2003, while China’s export to ASEAN accounted for 7.1 per cent of China’s total exports, China’s import from ASEAN accounted for 11.5 per cent of China’s total imports. China’s imports from ASEAN is close to its imports from EU or America (Tables 19.2 and 19.3). Although ASEAN ranks fifth among China’s top ten export markets, the export value is only half that of Japan which ranks fourth and one third that of the United States which ranks as the first. In 2003, China’s export to ASEAN was 7.1 per cent of its total value, compared to 21.1 per cent for the United States and 13.6 per cent for Japan (Table 19.4). However, ASEAN seems more important as China’s import source compared with China’s export market. In 2003, China’s import from ASEAN amounted to 11.5 per cent of its total imports from all countries. The figure is very close to the EU’s 12.9 per cent, which is ranked second, and China Taiwan’s 12.0 per cent, ranked third, close to two-thirds of Japan’s figure, which is ranked first and exceeds the sum of U.S. and Hong Kong imports (8.2 per cent and 2.7 per cent respectively), which are China’s two largest export markets (Table 19.5). While the total import growth rate was 39.9 per cent, the import growth rate with ASEAN was 51.7 per cent in 2003. From the perspective of bilateral balance of trade, among China’s top ten trade deficit source countries in 2003, three are from ASEAN: They are Table 19.1 China’s Top Ten Trade Partners (2003) Rank Country/Region Volume (US$ Billions) % of total Total 851.21 100 1 Japan 133.57 15.7 2 U.S. 126.33 14.8 3 EU 125.22 14.7 4 Hong Kong SAR, China 87.41 10.3 5 ASEAN 78.25 9.2 6 Korea 63.23 7.4 7 Taiwan Province 58.37 6.9 8 Russia 15.76 1.9 9 Australia 13.56 1.6 10 Canada 10.01 1.2 Note: Ranking by value of trade. Source: Ministry of Commerce of the People’s Republic of China. . 19 ASEAN-China Relations Ch 19 5/8/05, 9:06 AM 274 Business Environment and Opportunities in Shanghai 275 Malaysia, Thailand and the Philippines. China’s deficits to these countries are US$7.85 billion, US$5.05 billion and US$3.21 billion respectively (Table 19.6). Nonetheless in 2003, among the top ten trade surplus source countries, only Vietnam was from ASEAN with a surplus of merely US$1.72 billion (Table 19.7). Table 19.2 China’s Export Markets (2003) Continent/Region Volume (US...