China's rapid economic development is going to deliver real benefits rather than pose threats to its Asian neighbours, including ASEAN countries and Japan.

This point was forcefully made by Long Yongtu, secretary-general of the Boao Forum for Asia, at the ninth China Daily CEO Roundtable themed "China-Asia Business Partnership: Implications for multinationals" held in Beijing yesterday.

At the conference organized by China Daily, Long pointed out that economic integration in Asia is of strategical importance for all countries in the region as well as those companies including multinationals operating in this region.

This point was also echoed by some 30 China-based chief executive officers and senior executives of leading multinationals, domestic companies and international organizations such as BASF, Shell, Pfizer Investment, BMW Group, British Airways, the Walt Disney Company, Eastman Kodak, China Unicom and Clear Media, as well as the Asian Development Bank, who attended the conference yesterday.

Focus on regional co-operation

China has become a very active participant in regional economic co-operation and integration in recent years. The objective of the initiatives is to let other Asian countries share the economic achievements that China has made in the past decades, said Long.

The country has demonstrated its strong willingness and commitment to regional integration such as establishing a free trade area with ASEAN (Association of Southeast Asian Nations) countries and proposing such an area with Japan and South Korea in recent years.

"The key words during the process are open and responsible," stressed Long.

The former chief negotiator for China's resumption of GATT contracting party status and its accession to the World Trade Organization (WTO), Long said China's WTO membership and its continuing spectacular economic growth had prompted the country to switch from an conservative to an active approach to achieve economic integration in Asia.

"China considered that its active participation in regional integration could be interpreted by the international community that China intends to become open and responsible. That's why China started its long journey of negotiation on the establishment of a free trade area with ASEAN countries," said Long, who is now active in promoting regional economic co-operation.

Meanwhile, China also intended to deliver a strategically important message that it wished to alleviate concerns among its neighbours, including ASEAN countries.

The concerns, resulting from the rapid economic development of China, included issues like China taking away their foreign investment and jobs and the rise of China posing a threat to regional stability.

It was reported that beginning this July, China and the ASEAN countries will implement an agreement on the trade of goods under their FTA pacts.

Tariffs on most goods flowing within the China-ASEAN FTA will be finally cut to zero by 2010.

Figures from the Ministry of Commerce of China show that trade in goods covered by an "early harvest programme" - the prelude to an FTA - between China and ASEAN members, reached US$1.7 billion by the end of last year, up 41 per cent year-on-year. The "early harvest programme" exempts some products from tariffs before the FTA is completed.

"So regional economic integration is a kind of sharing that China wants to show its responsibility to create common prosperity and development in Asia," said Long.

East Asia linking up

Long, a veteran in multilateral economic, trade and legal affairs, continued that China, Japan and South Korea, whose combined GDP accounted for about 90 per cent of the total in East Asia, could play a more important role in this process.

Analysts expected China to lead a feasibility study for an East Asian FTA this year.

The East Asian FTA, bringing together China, Japan, South Korea and ASEAN member states, should be an exciting goal for China and the entire region, although achieving this will not be a simple task. China and South Korea started a non-governmental FTA study two weeks ago.

"Without close economic co-operation among China, Japan and South Korea, it could not be meaningful for East Asia economic integration," he emphasized.

Specifically, China and Japan could make joint efforts in many fields, such as energy, to work towards regional co-operation.

Long indicated that some misconceptions currently exist about Sino-Japanese relations. For example, as many media have reported, China is furiously competing with Japan as both are now the world's major oil importers, both with massive demand for oil.

"I do not agree with that point of view," Long stressed. "I am very optimistic about the overall relationship, especially the trade relationship, because I now see that China and Japan share much more in common than ever before."

Alexander Wan and Jian Er