ASEAN–China Free Trade Area

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China–ASEAN Free Trade Area
ASEAN–China Free Trade Area.svg
  ASEAN–China Free Trade Area
Chinese name
Simplified Chinese 中国―东盟自由贸易区
Traditional Chinese 中國─東盟自由貿易區
Vietnamese name
Vietnamese alphabet Khu vực mậu dịch tự do Trung Quốc – ASEAN
Indonesian name
Indonesian Kawasan Perdagangan Bebas ASEAN-Cina

The ASEAN–China Free Trade Area (ACFTA), also known as China–ASEAN Free Trade Area is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and the People's Republic of China. The initial framework agreement was signed on 4 November 2002 in Phnom Penh, Cambodia, with the intention to establish a free trade area among the eleven nations by 2010.[1][2] The free trade area came into effect on 1 January 2010.[3][4] The ASEAN–China Free Trade Area is the largest free trade area in terms of population and third largest in terms of nominal GDP.[5][6]


ASEAN members and the People's Republic of China had a combined nominal gross domestic product of approximately US$6 trillion in 2008.[7][8] The free trade area had the third largest trade volume after the European Economic Area and the North American Free Trade Area.[6]

Flag Country Capital Area (km2) Population
(2008 unless noted)
GDP (nominal)
(bln USD, 2008, IMF)
Currency Official languages
Brunei Brunei Darussalam Bandar Seri Begawan 5,765 490,000 19.7 dollar Malay
Myanmar Burma (Myanmar) Naypyidaw 676,578 50,020,000 26.2 kyat Burmese
Cambodia Cambodia Phnom Penh 181,035 13,388,910 11.3 riel Khmer
Indonesia Indonesia Jakarta 1,904,569 230,130,000 511.8 rupiah Indonesian
Laos Laos Vientiane 236,800 6,320,000 5.4 kip Lao
Malaysia Malaysia Kuala Lumpur 329,847 28,200,000 221.6 ringgit Malay, Mandarin, English, Tamil
Philippines Philippines Manila 300,000 92,226,600
166.9 peso Filipino, English
Singapore Singapore Singapore 707.1 4,839,400
181.9 dollar Malay, Mandarin, English, Tamil
Thailand Thailand Bangkok 513,115 63,389,730
273.3 baht Thai
Vietnam Vietnam Hanoi 331,690 88,069,000 89.8 đồng Vietnamese
China People's Republic of China Beijing 9,640,821 1,338,612,968
4,327.4 renminbi Mandarin


Members of ASEAN have a combined population of more than 580 million.

Indonesia accounts for more than 40 percent of the region's population, and its people have voiced the greatest amount of opposition to the agreement.[9][10] Several days following the implementation of the free trade area, it announced plans to renegotiate tariffs on 228 product categories. In exchange, Indonesia would accelerate implementation of the agreement on 153 categories.[11]

People's Republic of China[edit]

China first proposed the idea of a free trade area in November 2000.[12][13] It had overtaken the United States as the third largest trading partner of ASEAN, after Japan and the European Union, when the free trade area came into effect.[14] Between 2003 and 2008, trade with ASEAN grew from US$59.6 billion to US$192.5 billion.[6] China's transformation into a major economic power in the 21st century has led to an increase of foreign investments in the bamboo network, a network of overseas Chinese businesses operating in the markets of Southeast Asia that share common family and cultural ties.[15][16] China is also the world's largest exporter.

Framework agreement[edit]

Leaders of ASEAN and China, during a meeting in Singapore in November 2000, decided to explore measures aimed at economic integration within the region. In Brunei the following year, they endorsed the establishment of an ASEAN–China Free Trade Area.[17]

The framework agreement was signed on 4 November 2002 in Phnom Penh by eleven heads of government.[1]


Amendments for the framework of the free trade area mostly concerned Vietnam. These amendments were designed to assist Vietnam lower tariffs and put forth dates as guidelines.[18]


Negotiations on upgrading the Free Trade Area are expected to conclude in 2015.[19] The upgrade will allow more goods to be traded tariff free and normalize procedures for services, investment, and customs.[20]


The free trade agreement reduced tariffs on 7,881 product categories, or 90 percent of imported goods, to zero.[21] This reduction took effect in China and the six original members of ASEAN: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The remaining four countries will follow suit in 2015.[22][23] The average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 to 0.6 percent on 1 January 2010 pending implementation of the free trade area by the remaining ASEAN members. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 to 0.1 percent.[10]

The six original ASEAN members also reduced tariffs on 99.11 percent of goods traded among them to zero.[24][25]

See also[edit]


  1. ^ a b "Framework Agreement on Comprehensive Economic Co-Operation Between ASEAN and the People's Republic of China". ASEAN. 5 November 2002. Retrieved 1 January 2010. 
  2. ^ de Castro, Isagani (6 November 2002). "'Big brother' China woos ASEAN". Asia Times Online. Retrieved 1 January 2010. 
  3. ^ "China-Asean Trade Deal Begins Today". Jakarta Globe. Bloomberg. 1 January 2010. Retrieved 1 January 2010. 
  4. ^ Chan, Fiona (31 December 2009). "Asean-China FTA to kick off". The Straits Times. Retrieved 1 January 2010. 
  5. ^ Walker, Andrew (1 January 2010). "China and Asean free trade deal begins". BBC News. Retrieved 1 January 2010. 
  6. ^ a b c Gooch, Liz (31 December 2009). "Asia Free-Trade Zone Raises Hopes, and Some Fears About China". The New York Times. Retrieved 1 January 2010. 
  7. ^ equivalent to US$11.4 trillion by PPP in 2008
  8. ^ Brown, Kevin (1 January 2010). "Biggest regional trade deal unveiled". Financial Times. Retrieved 1 January 2010. 
  9. ^ Ten Kate, Daniel (1 January 2010). "Free-trade agreement between China, ASEAN grouping comes into force". The China Post. Bloomberg. Retrieved 1 January 2010. 
  10. ^ a b Coates, Stephen (31 December 2009). "ASEAN-China open free trade area". Agence France-Presse. Archived from the original on 1 January 2010. Retrieved 1 January 2010. 
  11. ^ Rosendar, Yessar; Ariffahmi, Dian (4 January 2010). "Indonesia Notifies Asean of Plan To Renegotiate China FTA". Jakarta Globe. Retrieved 4 January 2010. 
  12. ^ Richardson, Michael (27 November 2000). "Asian Leaders Cautious on Forging New Regional Partnerships". The New York Times. Archived from the original on 11 April 2012. Retrieved 3 January 2010. 
  13. ^ Asmoro, Andry (23 December 2009). "ASEAN-China free trade deal: Let's face the music". The Jakarta Post. Retrieved 1 January 2010. 
  14. ^ Moore, Michael (30 December 2009). "China and South East Asia create huge free trade zone". The Daily Telegraph. Retrieved 1 January 2010. 
  15. ^ Quinlan, Joe (13 November 2007). "Insight: China’s capital targets Asia’s bamboo network". Financial Times. 
  16. ^ Murray L Weidenbaum (1 January 1996). The Bamboo Network: How Expatriate Chinese Entrepreneurs are Creating a New Economic Superpower in Asia. Martin Kessler Books, Free Press. pp. 4–8. ISBN 978-0-684-82289-1. 
  17. ^ Wattanapruttipaisan, Thitapha (April 2003). "ASEAN—China Free Trade Area: Advantages, Challenges, and Implications for the Newer ASEAN Member Countries". ASEAN Economic Bulletin (Institute of Southeast Asian Studies) 20 (1): 31 – via JSTOR. (subscription required (help)). 
  18. ^ "Protocol to Amend the Framework Agreement on Comprehensive Economic Co-Operation Between the Association of South East Asian Nations and the People's Republic of China". ASEAN. 6 October 2003. Archived from the original on 17 May 2012. Retrieved 2 January 2010. 
  19. ^
  20. ^
  21. ^ "ASEAN-6 zero tariffs take effect immediately". The Jakarta Post. 2 January 2010. Retrieved 2 January 2010. 
  22. ^ "China-ASEAN FTA pact set to boost trade volume". China Daily. 30 December 2009. Retrieved 1 January 2010. 
  23. ^ Li, Qiaoyi (30 December 2009). "New Year, new ASEAN free trade bloc". Global Times. Retrieved 1 January 2010. 
  24. ^ Dyer, Ellie; Kunmakara, May (1 January 2010). "With new year, Kingdom joins world's largest FTA". The Phnom Penh Post. Retrieved 2 January 2010. 
  25. ^ "Zero tariffs for ASEAN-6 starting". The China Post. 2 January 2010. Retrieved 2 January 2010. 

External links[edit]