Saturday 15th August, 2009 (IANS)
China and the Association of South East Asian Nations (ASEAN) Saturday signed an investment pact that provides guarantees against nationalisation, riots and disputes and is expected to boost investment.
'The ASEAN-China Investment Agreement is expected to boost bilateral investments by 40 to 60 percent over the next two years,' Thai Commerce Minister Porntiva Nakasai said after inking the pact with Chinese Commerce Minister Chen De-ming.
China is currently ranked the eighth-largest investor in South East Asia with $5.6 billion in cumulative investments in the region as of 2008.
Investments in China from the 10 members of ASEAN amounted to $6.1 billion as of last year.
The investment agreement provides Chinese and ASEAN investors guarantees not necessarily proffered to other countries.'
For instance, the agreement will guarantee compensation for investors in the case of nationalisation or riots,' said Krisda Piampongsant, spokesman for the commerce ministry of Thailand, which now holds the rotating chairmanship of ASEAN.
The association agreed to set up a dispute-settlement body soon to resolve legal problems that might arise between investors and the respective states, Krisda said.
ASEAN has already signed a partial free trade agreement with China, which covers trade in goods.
The investment pact, which took six years to finalise, was seen as the second step toward a full free trade pact with China with the third being an agreement in services.'Services is a tougher nut to crack,' Krisda noted.
China was the fourth-largest export market for ASEAN between January to September 2008 when the region's exports to China amounted to $85.6 billion. China's exports to ASEAN during the same period was $107 billion.
The ASEAN-China investment agreement was signed at a meeting of ASEAN's economic ministers in Bangkok. On Thursday, the regional bloc signed a partial trade agreement with India, which was expected to boost bilateral trade to $60 billion by 2016 from $47 billion last year.
ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.