Analysis of Trade Development between China and Association of Southeast Asian Nations

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For export, from 2000 to 2008 China’s value of exports to ASEAN boomed year by year, upped from USD17.341 billion to USD114.142 billion. In 2002, the speed of growing became fast, up 28.3% than the previous year. In 2009, due to the influence of the global financial crisis, total exports crept down to USD106.297 billion. In 2010, China-ASEAN Free Trade Area fully established, China’s trade volume to ASEAN rallied to USD138.207 billion. And China’s export to ASEAN lasted raising sharply from 2010 to 2012, total exports increased to USD204.272 billion in 2012, however the growth rate was crept down year by year. It is obvious that ASEAN is increasingly becoming an important exporter of China. Alpha

For import, the import had the same change trend with export. There was an upward trend of China’s total imports from ASEAN from 2000 to 2008 with increase from USD 22.181 billion to USD 116.974 billion. Especially in 2003, value of imports reached a peak with USD 47.327 billion. In 2004, the growth rate of imports declined, however from 2005 to 2007, the growth rate of imports accelerated year after year. In 2008 imports growth rate began to declined sharply. In 2009 the imports also had a declined trend and fell to USD 106.714 billion with appearance of negative growth of -8.8% among 12 years. Since January 1st of 2010, more than ninety-three percent of products traded between China and ASEAN enjoy zero tariffs, and China’s imports from ASEAN rose sharply to USD 154.569 billion with growth rate of 44.8%. However starting from 2011, the import growth rate decreased gradually, especially in 2012, representing growth rate of only 1.6%.

There was a phenomenon that China had trade deficit with ASEAN’s member countries from 2002 to 2012. The trade deficit increased year by year from 2000 to 2006, however the trade deficit quickly went down to USD 0.417 billion in 2009 and rallied from 2010 to 2011.

Table 2. Merchandise Trade between China and ASEAN by Scale, 200-2012. (USD billion)

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2.2. Merchandise Trade by Country

On the export side in 2012, China’s total exports to the six countries of Singapore, Malaysia, Indonesia, Vietnam, Thailand and Philippines amounted to USD 193.701 billion, accounting for 94.82% of total export volume. There was a big increase compared with 2011, especially China’s exports to Malaysia, upped 31% over the previous year. In contrast, China’s total exports to Myanmar, Cambodia, Brunei and Laos was less, therein China’s exports to Brunei and Laos, accounting respectively for less than 1%. But compared with 2011, the exports to Brunei and Laos upped 68.2% and 96.8% over the previous year, showing significant growth. Although the volume of exports is low, the economic cooperation is becoming increasingly close between Brunei, Laos and other agriculture-based nations. China’s export trade to ASEAN is not only limited to old member states, Vietnam is the country joined ASEAN later, but in 2012, the total exports to Vietnam was USD 34.21 billion, upped 17.6% over the previous year, accounting for 16.75% of the total exports China to ASEAN, exceeding Thailand and Philippines ranked in fourth place. In 2012 the growth rate of China’s export to Laos ranked in first among the ten countries, due to Laos holding the ninth Asia Europe Meeting, China CAMC Engineering Corp., LTD., China State Construction Engineering Corp. LTD. and other Chinese companies specifically provided a lot of projects contracts to guarantee the smooth conduct of the summit, these were the main reason for the rapid growth of the trade between China and Laos.

For the 2012 China’s imports from ASEAN was lower than exports. Import trade with Malaysia, Thailand, Myanmar, Laos, Brunei showed negative growth. Trade between China and Singapore, Malaysia, Indonesia, Vietnam, Thailand and Philippines accounted for 71.65% of China’s total imports from ASEAN. By contrast, imports from Myanmar, Laos, Brunei, Cambodia, and Shikoku were lower than other six countries, accounting for 1.35%.

Table 3. Merchandise Trade between China and ASEAN by Country, 2012. (USD billion)

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China’s imports and exports to ASEAN mainly concentrate on the six countries of Singapore, Malaysia, Indonesia, Thailand, Philippines and Vietnam, therefore China should strengthen the economic cooperation with the six countries to ensure the trade development between China and ASEAN.

2.3. Merchandise Trade by Product

In 2012, Malaysia, Thailand, Singapore and Indonesia are top four trading countries to China among ten ASEAN countries. From Table 4 to Table 7 show the composition of the top ten commodities that the four countries of Malaysia, Thailand, Singapore and Indonesia imported and exported to China in 2012. On the export side, among the commodities that the four countries exported to China, of which the similar are mechanical and electrical products, plastic and rubber, minerals, chemical products, base metals and products, and they were mainly agricultural products and materials products. Especially mechanical and electrical products, accounted for a large proportion of the commodities that four countries exported to China, ranked first among the commodities Malaysia and Singapore exported to China, and the second place of Thailand and the seventh place of Indonesia. China’s great demand for minerals indicated that with rapid economic development the demand for resource products is increasing.

For import, the four countries have the very similar commodity structure of imports from China, the top ten commodities are mainly mechanical and electrical products, chemical products, transport equipment, plastic and rubber, textiles and raw materials, furniture, toys and miscellaneous manufactured articles. In addition, the mechanical and electrical products, plastic and rubber, chemical products also occupied a very important position. By mechanical and electrical products as representatives of high-tech products, high-tech products accounted for a large proportion of these commodities that the four countries exported to China. However the labor-intensive products also accounted for a certain proportion. Malaysia, Thailand, Singapore imported optical, watches and medical devices from China, indicating there is an increasing demand for these emerging trade products, and the emerging trade products have very potential market prospects. Although Singapore is a developed country, still has the similar import and export commodity structure with other three countries. China and ASEAN should continue to strengthen the development of high-tech products and constantly improve the export structure to get mutual benefits. Manufactured products trade accounted for a larger share of trade between China and ASEAN countries, mainly in the food and beverages and tobacco industry, textile industry, machinery and transport equipment and chemical industry.

Due to the lower level of economy development of the six countries, their imports and exports to China mainly focus on agricultural products. Agricultural products trade between ASEAN and China has developed rapidly. These countries are in great demand for industrial products. Their import products from China are mainly electronics, refined oil, steel, textiles, etc.

Table 4. Merchandise Trade between China and Malaysia by Product (Top 10), 2012. (USD million)

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Table 5. Merchandise Trade between China and Thailand by Product (Top 10), 2012. (USD million)

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Table 6. Merchandise Trade between China and Singapore by Product (Top 10), 2012. (USD million)

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Table 7. Merchandise Trade between China and Indonesia by Product (Top 10), 2012. (USD million)

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2.4. Foreign Direct Investment between China and ASEAN

In 2010 China's utilization of FDI amounted to USD 105.73235 billion of which foreign direct investment from ASEAN countries amounted to USD 6.32368 billion, accounting for abut 6.0%. For the total direct investment from ASEAN into China of which Singapore ranked in first with USD 5.4282 billion, accounting for 86%, and Brunei came in second place. In 2011 China's utilization of FDI amounted to USD 116.00985 billion of which FDI from ASEAN amounted to USD 6.64650 billion, accounting for about 5.7%, decreased compared with 2010. Singapore still ranked first with amount of USD 6.09681 billion, FDI from Brunei into China declined and ranked in third place. However, Malaysian’s FDI increased. Except for Brunei, FDI of Philippines, Indonesia, Laos and Vietnam’s to China all had the decline trend. In contrast, both of FDI from Thailand and Myanmar into China increased.

In 2010, China's outward FDI flows into ASEAN countries was USD 4.405 billion, accounting for 9.8% of outward FDI flows into Asia, and outward FDI stock was USD 14.35 billion, accounting for 6.3% of outward FDI stock into Asian region. In 2011, China's investment flows into ASEAN countries amounted to USD 5.905 billion with an increase of 34.1%, accounting for 13% of investment flows in Asia, and outward FDI stock was USD 21.462 billion, accounting for 7.1% of total outward FDI stock in Asia, Until the end of 2011, China has established more than 2,400 FDI enterprises in ASEAN, hired 117500 local employees. Compared with 2010, China's FDI into ASEAN had an upward trend in 2011.

Table 8. ASEAN’ FDI in China, 2010-2011. (USD 10,000)

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From the perspective of direct investment flows, China's direct investment into Singapore ranked first among other ASEAN countries, and Brunei came in last place. Compared with 2010, China’s outward foreign direct investment flows into Myanmar, Thailand, Vietnam and Malaysia declined in 2011. As for FDI stock, at the end of 2011, Singapore was in first place ASEAN countries, followed by Myanmar and Cambodia, and Brunei was at the bottom in the list.

It can be seen the bilateral foreign direct investment was evolving constantly; Chinese enterprises invested in these countries mainly concentrate in manufacturing, power development, wholesale and retail trade, mining, construction industry and other industries. China should strengthen investment in high-tech industries, while China also needs to maintain development of investing to developing countries, so that to get complementary advantages, optimize their domestic industrial structure and improve the industrial technology and also promote the progress of the host country.

Table 9. China’s FDI in ASEAN, 2010-2011. (USD 10,000)

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