Promoting China-ASEAN economic cooperation under CAFTA framework

Abstract

The implementation of China-ASEAN Free Trade Agreement in January 2010 marks an important milestone in their relations. CAFTA builds on and extends the growing economic relationships between the two sides. The agreement is expected to further promote China-ASEAN trade alongside intra-regional direct investment and extra-regional FDI. However, as a result of the 2008 financial crisis, global economic conditions have changed significantly from those prevailing at the time of drafting the agreement. This may represent new opportunities and challenges. Its future success depends on how its signatory members can work together to overcome the challenges and make good use of the opportunities. Further down the road, ASEAN and China can build on CAFTA to enhance their economic cooperation and integration through coordination in monetary and fiscal policies as well as industrial policies.