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On Nov. 4, 2002, then Chinese Premier Zhu Rongji and leaders of the 10 ASEAN nations signed at the Sixth China- ASEAN Summit the landmark Framework Agreement on ASEAN-China Comprehensive Economic Cooperation, marking the beginning of the process of setting up a China- ASEAN free trade zone.

 

Under the agreement, the free trade zone would be completed by 2010, and the four new ASEAN members -- Laos, Cambodia, Myanmar and Vietnam -- have been allowed an additional transitional period of five years and are slated to complete the building of the free trade area in 2015.

 

The China- ASEAN free trade area, which will comprise China, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, is expected to be one of the biggest free trade areas in the world.

 

The China-ASEAN free trade area will have a total population of 1.8 billion and a combined gross national product of US$2 trillion when completed in 2010.

 

The estimated total trade volume of US$1.2 trillion will make it the third largest market in the world, after the European Union and the North American free trade area.

 

Since 2003, China and ASEAN have held consultations on agreements concerning the building of the free trade area.

 

Beginning from July 1, 2005, China and ASEAN countries started their tariff-reducing process. The two sides will gradually reduce or cancel tariffs on 7,000 kinds of products.

 

By 2010, China and six old ASEAN member nations -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- will impose zero tariffs on most normal products, while China and the other four new ASEAN members -- Cambodia, Laos, Myanmar and Vietnam -- will do the same in 2015.

 

According to official Chinese statistics, trade between China and ASEAN rose to US$130.4 billion in 2005, up 23.1 percent on a year-on-year basis.