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China, Japan, S. Korea should strive for FTA

July 17, 2006

SHI GUANGSHENG
Chairman of the China Association of Enterprises with Foreign Investment, former minister of China's Ministry of Foreign Trade and Economic Cooperation

Asian countries have developed to what they are today with remarkable spiritual strength and enormous efforts. But the level of economic development differs from country to country, and there are mutually exclusive problems that remain unsolved in the region.

There is now a major global trend toward forming free trade zones. But the state of economic cooperation in Asia still leaves much to be desired when compared with that in Europe and North America.

Already, leaders of Asian countries have agreed to pursue the creation of an East Asian Community as a long-term goal, bringing economic cooperation in the region to a new stage. ASEAN, China, Japan, South Korea and India should work together to build a free trade zone for further development of regional economic cooperation.

In particular, China, Japan and South Korea - which all occupy an important economic position in the world - should actively explore ideas to promote free trade among them. In November 2002, the leaders of the three countries agreed to jointly examine the feasibility of creating a free trade zone. The research has made great progress, with 70-80% of the companies in each of the countries supporting the idea in expectations of many new opportunities to earn huge profits.

This initiative should be developed further into a process to establish an East Asian free trade zone. This process should then be widened to cover other parts of Asia, such as South Asia, Central Asia and West Asia, to build up effective systems for cooperation among areas.

The fundamental principle for this effort should be that private businesses play central roles in seeking efficiency. In order to ensure freedom and convenience in trade and investment, the creation of a fair environment for corporate development should be accelerated.

Let me quote Huang Zunxian, a famous poet of the Qing Dynasty. "Both located in Asia, the neighboring countries have repeatedly swung between friendship and alienation. What is more important than anything else is that all the countries (in Asia) acquire the ability to help each other by becoming stronger."

We will be able to make great contributions to the future prosperity of Asia and the world by helping each other to grow and develop.

Since China joined the World Trade Organization in December 2001, the economic and trade environment in the country has changed dramatically. I believe WTO membership has brought many good changes to the country.

Tariffs have been reduced, while reform and liberalization have made progress in a wide range of areas, including the service sector. As many as 2,300 related statutes have been created. All these changes have stimulated growth of the domestic economy and increased China's trade with other countries.

China has also been playing an active role in the Doha round of world trade talks and making consistent efforts to ensure widespread compliance with WTO rules. I know there are a variety of opinions and complaints (about China's systems and policies). We intend to take your opinions seriously and make further efforts toward improvement and reform.

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.