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Features - 27 August 2014

Upgrade of ASEAN-China FTA to be Negotiated

At the 13th AEM-MOFCOM conference held earlier this week in Naypyidaw, Myanmar, it was agreed to upgrade the ASEAN-China Free Trade Area (ACTFA) in order to ensure that it remains relevant in today's economic climate. The AEM-MOFCOM (ASEAN Economic Ministers-Ministry of Commerce People's Republic of China) meetings formed part of the broader 46th ASEAN Economic Minister Meeting. The topic of Custom Procedures and Trade Facilitation (CPTF) negotiations was also raised, as well as the need to review the Sensitive Track and Rules of Origin, with a progress report to be made at the next AEM-MOFCOM consultation.

Statistics reveal that China remains ASEAN’s biggest trading partner, with total trade reaching US$350.5 billion. Trade with China makes up 14% of ASEAN’s total trade and reflects an increase of 7.7% year-on-year. ASEAN was the recipient of US$ 8.6 billion in foreign direct investment from China, being an increase of 60.8% year-on-year, and totaling 7.1% of total foreign direct investment in ASEAN member countries – Indonesia, Philippines, Malaysia, Thailand, Singapore, Brunei, Laos, Cambodia, Myanmar and Vietnam.

The initial concept of the ASEAN-China Free Trade Area (also known as China-ASEAN Free Trade Area – CAFTA) was signed in November 2002 and came into effect in January 2010. ACFTA is the world's largest free trade area measured in population, and the third largest in nominal GDP. With China's continued development as an economic power in the 21st century, it is anticipated that ASEAN-China trade will grow substantially. The proposed Asian Infrastructure Investment Bank (AIIB), which aims to rival the World Bank, Asian Development Bank and IMF, will no doubt play a major role in trade growth. While the AIIB is still in the founding process, in June 2014, China proposed increasing the bank's registered capital to US$ 100 billion, doubling the original amount of US$ 50 billion.


Foreign Automakers Gain Market Share in China - 13 August 2014

A recent report revealed that domestic automakers in China are losing market share to foreign automakers at a steady rate that appears set to continue as multinational corporations set up manufacturing plants in China. With an increasing number of China's citizens gaining wealth, new car sales are soaring, and more affluent consumers are choosing global brands which are seen as being safer, more reliable and more luxurious than locally produced vehicles. Moreover, restrictions on the number of license plates issued each year in Shanghai, Beijing and Guangzhou has made choosing a car an important decision, and buyers appear to be prepared to spend more on a car when they receive their much sought-after, and often long-awaited, license plates.


China and Cuba Discuss Trade and Investment - 23 July 2014

As the last stop on his four-country Latin American tour, Chinese President Xi Jinping met with Cuban President Raúl Castro to discuss, among other things, increasing bilateral trade and investment. President Xi was greeted with military honors at Cuba's Palace of the Revolution, the venue for talks between the two leaders. As the only single-party communist state in the Americas, Cuba started opening up its economy in 2008 with limited success, but observers note that Cuba appears to be following in China's footsteps with regard to economic and trade reforms, which lays a foundation for increased cooperation between the two countries.