Access to a bigger market

Trade and investment measures undertaken in the South-East Asian region are non-discriminatory and complementary in nature. These nations are increasingly driving down differences among each other in the form of tariff barriers and other border costs. Most of the items are traded at zero tariffs among the member countries. Thailand, Laos, Cambodia, Viet Nam, and Myanmar are all part of ASEAN. As on January 01, 2010, duties on 99.65% of all tariff lines under the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area have been eliminated. For the newer ASEAN Member States – Cambodia, Laos, Myanmar and Vietnam – 98.96% of total tariff lines are within the tariff of 0 to 5% range. Since October 2003, China and Thailand have taken the lead in implementing zero tariffs on agricultural products, covering 200 types of fruit and vegetables. China has also granted zero tariffs treatment to Cambodia (83 products), Laos (91 products) and Myanmar (87 products). Free market access for Chinese exports into this region means a larger market for their manufacturers.

Balanced regional growth within China

When compared with the other provinces like, Shandong, Guangdong, Hainan, Jiangsu, Beijing, Shenzhen, and Tianjin, the provinces of Yunnan and the Guangxi (bordering South-East Asia), are relatively underdeveloped. Given their geographical proximity to South Asia and the ASEAN markets, China can gain substantially by developing these two regions. Yunnan province shares border with Myanmar in the West, Laos, and Vietnam in the South. A direct access from Kunming (capital city of Yunnan) to the sea ports of Myanmar would mean China can export products directly to South Asia, Middle East and Europe without going all the way through Malacca Strait, resulting in savings on transport costs and time. Guangxi is located adjacent to the economically developed pan-Pearl River Delta, Hong Kong and Macao. Guangxi also neighbors Vietnam, which means Chinese factories can set up base there, and still continue to get access to the ports at Hong Kong in the North and Singapore in the South.