KUNMING, April 5 - The Secretary-General of the Association of Southeast Asian Nations stressed today China's stake in the economic recovery of Southeast Asia. The recovery, he said, would restore ASEAN as a market for Chinese exports, a source of investments for China, and a profitable venue for Chinese investments.
Mr. Rodolfo Severino, the Secretary-General, told the fifth annual meeting between senior ASEAN and Chinese diplomats that ASEAN finance ministers, international financial institutions and independent analysts had concluded that ASEAN's economic recovery could begin this year. He cited the stability of foreign exchange markets, lower inflation, the substantial decline in interest rates, and the resumption of growth in industrial production.
The Chinese delegation was led by Vice Foreign Minister Yang Wenchang and included Assistant Minister Wang Yi. ASEAN was represented by their counterparts, led by Datuk Abdul Kadir Mohamad, Secretary-General of the Foreign Ministry of Malaysia, ASEAN coordinator-country for the ASEAN-China "dialogue." Other ASEAN members are Brunei Darussalam, Indonesia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The Chinese hosted the meeting in the capital of Yunnan province, which borders on three ASEAN countries - Laos, Myanmar and Vietnam.
Briefing the meeting on the latest developments in ASEAN, Severino warned that ASEAN's prospects could nevertheless be obstructed by such external factors as protectionism in the developed countries, a sharp reversal in the United States stock market, the continuing weakness of the Japanese economy, "misalignments" in the exchange rates of major currencies, and the uncertainty of financial flows. He reiterated the ASEAN hope that China would maintain the value of its currency, the renminbi.
He expressed ASEAN's gratification over the cooperation being undertaken at various levels between ASEAN and China, Japan and South Korea in responding to the global and regional financial turmoil.
Severino emphasized that a major response of ASEAN to the global financial tun-noll and its impact on the region was the faster and deeper integration of the ASEAN economy. He recalled that the completion of the ASEAN Free Trade Area had been advanced to 2002. He noted, however, that, by next year, the free trade area would be subtantially realized, with almost all of ASEAN's trade within the region subject to no more than five percent tariff and much of it having no tariffs at all.
He informed the meeting that a new, wide-ranging round of negotiations on trade in services among ASEAN countries would be launched this year and scheduled for completion by 2001.
The Secretary-General also cited the agreement under which each ASEAN country would extend national treatment to investments from other ASEAN countries in its manufacturing sector. This means that the country would treat such investments as if they were made by its own nationals.
Severino recalled the "bold measures" agreed upon by the ASEAN leaders at their summit in Hanoi last December, which underscored the vital importance of drawing investments into ASEAN as a response to its economic setback.
The measures provide that investments in ASEAN applied for in 1999 or 2000 would receive corporate income-tax exemptions and the right to be wholly foreign-owned, import capital goods duty-free, hire foreign personnel and lease industrial land for an extended period. This, he said, was in addition to the incentives and privileges already being extended to foreign investments by individual ASEAN countries.
Severino informed the meeting that the ASEAN finance ministers had exchanged detailed information in March on what their countries were doing to revive domestic demand, protect the poor, revitalize the financial and corporate sectors, strengthen transparency and good governance, and mobilize additional resources to finance growth.
He pointed out that the significance of this was that the ministers now had a common understanding of what was going on in the region in terms of economic policy and developments. This was, he said, part of the "peer review" provided for under the "surveillance process" established by the ministers last year.
That process, operated by the ASEAN Secretariat with funding and technical support from the Asian Development Bank, is a system in which macroeconomic data would be collected, assembled and analyzed and reported to the finance ministers.
At the ASEAN-China consultations, the Chinese officials gave a comprehensive briefing on domestic developments in China and on China's foreign policy and relations with the United States, Russia, Japan, India and the European Union.
The meeting reviewed the state of ASEAN-China relations, which, apart from the annual political consultations, have been marked by active cooperation in trade and investment promotion, information exchanges, and science and technology.
The ASEAN and Chinese officials also discussed the situation in the South China Sea.
