Sea row set aside as China, ASEAN seek trade boost

29 August 2012
By Michelle Fitzpatrick (AFP)

SIEM REAP, Cambodia — China and Southeast Asian nations pledged Wednesday to strive for closer economic ties, setting aside regional tensions over a territorial row in the resource-rich South China Sea.

Trade between China and the Association of Southeast Asian Nations (ASEAN) jumped to over $200 billion in the first seven months of 2012, up nine percent year-on-year, Chinese Commerce Minister Chen Deming said during a meeting with regional economic ministers in the Cambodian tourist hub of Siem Reap.

The business relationship between ASEAN and China was "particularly important" amid global economic gloom, he said, adding that both sides have "a solid basis for cooperation" and "bright prospects".

China is ASEAN's largest trading partner, while the 10-nation bloc last year overtook Japan as Beijing's third-biggest trading partner.

"China is willing to be ASEAN's good neighbour, good friend and good partner," Chen said in his opening remarks.

This week's talks between regional economic ministers mark the first high-level gathering of ASEAN members since a foreign ministers' meeting in July ended in acrimony over how to deal with a dispute in the South China Sea, exposing deep divisions within the bloc.

The tension that hung over those meetings appeared absent from the cordial gathering in Siem Reap, suggesting that ASEAN members do not want the maritime row to hurt business.

"It's a completely different ballgame," said Southeast Asia expert Carl Thayer, emeritus professor at the University of New South Wales in Australia.

The foreign and economic ministers have "completely different agendas", he added.

Friction within ASEAN also eased significantly after Indonesia got the bloc to agree on six key points on the South China Sea following intense diplomatic efforts in the days after the failed ASEAN summit, Thayer said.

China claims sovereignty over almost all of the resource-rich sea, which is home to vital shipping lanes, but ASEAN members the Philippines, Vietnam, Malaysia and Brunei have overlapping claims.

Hanoi and Manila have recently accused Beijing of increasingly aggressive behaviour in the disputed waters.

The ASEAN group, which also includes Cambodia, Indonesia, Laos, Myanmar, Singapore and Thailand, saw its economies as a whole grow by 4.7 percent in 2011, down from 7.6 percent growth in 2010, according to ASEAN data.

"We recognise the external environment has become more hostile," Malaysian Minister for International Trade and Industry Mustapa Mohamed said, in a nod to the economic troubles of the key eurozone and US markets.

Nonetheless, "we consider ourselves to be one of the most dynamic regions in the world under the circumstances", he told AFP on the sidelines of the talks.