Business / Economy

China-ASEAN trade, investment has room to deepen

(Xinhua) Updated: 2014-08-09 14:32

Friday's Chinese customs data showed that trade between China and Vietnam jumped 22.2 percent year-on-year to $43 billion in the first seven months of 2014. China's exports to Vietnam soared 26.2 percent while exports rose 11.4 percent.

In the Jan-July period, trade between China and the Philippines grew 13.8 percent year-on-year to $24 billion. China's exports to the Philippines gained 15.6 percent while China's imports rose 11.8 percent.

Surprisingly, while ASEAN and China trade links are robust, foreign direct investment (FDI) flows between the two are relatively weak, HSBC economists said in the report.

But that will change thanks to further regional integration, a Chinese push to expand direct overseas investment, and rising regional income that will accelerate FDI and service links.

"Investment is set to be the next driver that will deepen economic ties between the two," HSBC economists said.

Chinese companies are venturing abroad to acquire natural resources, find new markets and technology. Rising Chinese direct investment to ASEAN countries, mainly focused on the service industry and property, is growing rapidly.

They maintained that trade and investment between China and ASEAN have a lot of room to deepen further, despite the geopolitical complexities.

A combination of large regional trade pacts, deregulation of China FDI and saturation of China's domestic market, and rising incomes in both China and ASEAN will change the landscape of trade and investment between ASEAN and China in the years ahead, the report said.

"ASEAN and China are only at the beginning of their journey to further strengthen trade and investment links," the report quoted economists as saying. The relationship may not necessarily travel on a linear path, given ongoing geopolitical complexities.

But if recent history is any guide, politicians and business leaders of ASEAN and China will pragmatically choose what is best for their economies and the welfare of their populations, the HSBC economists concluded.

China-ASEAN trade, investment has room to deepen

China-ASEAN trade, investment has room to deepen

Trade surplus skyrockets to hit monthly recorda China remains top importer of Vietnamese fruits, vegetables

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