Free Trade with China: ASEAN’s Winners and Losers

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This article focuses on the competitive aspects of trade and the benefits and losses that accrue from these aspects that come from the expansion of free trade relations to capture China. What makes this article desirable in research is the fact that it captures the concept of integration and globalism from a higher level by pulling in China as the probable economic power in Asia.

What is the economic implication of the extension of the inclusion of China in the free trade agreement by ASEAN member states? This is the main question that is explored in the article. The author notes that sour lessons are bound to be witnessed by countries in the region, particularly when it comes to the capitalization of China’s potential in the region. The article argues that given the fact that the Chinese economy is larger than most of the other economies in the region, Chinese companies, which are larger in size, are bound to invest more in the other economies in the region. This will make China the main gainer in the free trade agreement. At the same time, China will limit the economic potential of the states that seem weaker in the ASEAN trade bloc.

It is worth nothing that the author does not take a uni-directional approach in assessing the possible implication of including China in the ASEAN free trade agreement. At this juncture, it is critical to bring out another dimension of the article to explore the benefits accrued by the other countries. Thought not directly, the article points to nationalization of the globalized economy in the region, where other national entities from other countries can draw a lot of economic benefits from China. An example that can be drawn from the article is the existence of a vast market in China, where other benchmark organizations in the region like the HSBC can take advantage of the vast investment opportunities in China. Nonetheless, the author points to diverse resource endowments by the countries in the region, which points to competitive advantage and the probability of all the economies in the region to benefit when they centre on the production and exchange of products and services in which they are more competitive than China (Chowdhury 2010).  

Though the author points to optimism, more so when it comes to deriving the benefits of the domestic economy in China by the members of the ASEAN, he does not expand the discussion to completely bring out the impediments to investment in China, more so by weaker economies in the region (Chowdhury 2010). 

Chowdhury, N 2010, ‘Free trade with China: ASEAN’s winners and losers’, Time World, Friday, Jan. 22, 2010, viewed 13 February 2013, <http://content.time.com/time/world/article/0,8599,1955863,00.html> 

Aga Rianta

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