August 17, 2009
Reuters and Xinhua
BANGKOK: China has signed a pact to protect foreign direct and portfolio investment, as well as to offer compensation for damage caused during riots and political disturbances.It is the third free trade agreement (FTA) the country has signed with the 10-member Association of South East Asian Nations (ASEAN) and could prove a major step towards broader economic cooperation.
The deal, which also eases restrictions on equity ownership and land acquisition, marked the end of negotiations over the China-ASEAN Free Trade Area, which is to be realized by Jan 1.China's Minister of Commerce Chen Deming and his ASEAN counterparts from Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Myanmar, Laos and Cambodia signed the FTA on Saturday.
It states all parties will facilitate speedy settlements of business and labor disputes, as well as repatriation of corporate earnings.
"It will be an advanced FTA that covers an extensive area of 13 million sq km and a population of 1.9 billion," said Chen.FTAs on goods and services were rubber-stamped in 2005 and 2007 respectively.
China is the eighth largest investor in ASEAN, with outstanding two-way investment totaling $11.7 billion at the end of last year.
In April, Premier Wen Jiabao announced a $10-billion China-ASEAN Fund on Investment Cooperation to support infrastructure development in the region, while in July around 300 business leaders signed deals committing $590 million of investment in industrial property in Thailand during a seminar in the Thai resort of Pattaya.
China is ASEAN's fourth largest trading partner, with bilateral trade rising to $231 billion last year, up 14 percent on 2007. With most Western economies suffering a severe downturn since mid last year, China has emerged as the biggest buyer of products from member nations.
ASEAN, Australia and New Zealand are also moving closer to a trilateral FTA, a joint media statement said on Saturday after the 14th ASEAN Economic Ministers Closer Economic Relations Consultation.