China Free Trade Agreements

However, the most important free trade agreement that China has negotiated so far is with ASEAN. With the ASEAN bloc, which included Asian tigers from Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, as well as smaller regional players such as Brunei, Cambodia, Laos and Myanmar, this unique agreement alters the development of Chinese and ASEAN production. Many Chinese commentators have focused on increasing the cost of labour in China and have seen how many Chinese companies are now facing rising wages. The ASEAN agreement offers a solution by allowing companies to relocate to other low-priced regions of Asia, to use these lower costs while being able to serve the Chinese market through duty-free imports authorized by the free trade agreement. The RCEP`s signature brings together 2.2 billion people and covers 28% of China`s world trade, which has been signed by 11 free trade agreements, three of which are under negotiation and three more are being considered. Many of them are relatively small, although they are useful for companies in the countries that have them, Chile, Costa Rice, Iceland and Peru. The Pakistani agreement is often used in bilateral Sino-pak relations, which are obviously strong, with Pakistan being the main beneficiary of Chinese foreign investment in Southeast Asia, while China also has an interesting free trade agreement with Switzerland, signed in the middle of last year and expected to come into force later in 2014. In particular, Switzerland is not a member of the EU, although it is a member of the European Free Trade Association and has a bilateral agreement with the European Union. Switzerland is one of the few European countries to benefit from a trade surplus with China, and the agreement was China`s first with a continental nation. Switzerland`s trade surplus with China amounted to about $23 billion in 2012, thanks in part to sales of luxury goods such as watches and chemicals. One of the big winners of the agreement was Nestlé, which, as part of the agreement on reducing consumer prices in China, will pass on the savings needed to make its products more competitive. Further down the pipeline, there are possible agreements with India, South Korea and an agreement between China and Japan and Korea. The 2015 deadline is of paramount importance to China, as it also includes Vietnam, which has gradually become an alternative target for production to China.