By Alex Tangkilisan
Feb. 7 – The ASEAN–India Free Trade Area (AIFTA) is a free trade area consisting of the 10 member states of the Association of Southeast Asian Nations (ASEAN) and India. The initial framework agreement was signed in Bali, Indonesia, on October 8, 2003, and the final agreement was signed on August 13, 2009. The free trade area came into effect on January 1, 2010.
In the aftermath of the recent ASEAN-India Commemorative Summit in New Delhi on December 20-21, 2012, and the subsequent passing of the free trade agreement (FTA) on services and investments, economic ties and prosperity are set to blossom between the two regions. Continue reading
Jan. 28 – China National Petroleum Corporation (CNPC) stated that the long awaited Myanmar-China oil and gas pipelines should be operational by May of this year. The 1,100 kilometer pipeline stretches from Kyaukpyu Port on Myanmar’s central west coast, crosses the country from west to east and terminates at Ruili, near Kunming, in Yunnan Province.
The pipeline contains two feeder pipes: one containing oil shipped to Kyaukpyu from the Middle East and Africa across the Indian Ocean, and the other containing gas from the Shwe gas fields in the Bay of Bengal. The oil route negates the need for China to send shipments through the Straits of Malacca. Continue reading
Jan. 11 – The first issue of Asia Briefing Magazine, titled Are you Ready for ASEAN 2015?, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore through the months of January and February 2013.
Although both China and India have recently signed free trade agreements with ASEAN, many businesses still seem blissfully unaware of the free trade agreements and economic partnerships that are dramatically changing Asia’s business opportunities. These are agreements that do away with customs duties and tariffs on thousands of products. In this first issue of the bi-monthly Asia Briefing magazine, we focus on the new dawn that ASEAN free trade brings to the entire region, as well as the dramatic added impact of pan-Asian free trade agreements such as the Regional Comprehensive Economic Partnership. Continue reading
Though FDI remains a key factor that drives economic growth in Asia, at the same time decision makers need to prioritize growth of domestic industries and products.
By Anthony Gokianluy
Many nations in Asia are considered highly entrepreneurial, with poverty cited as the main reason for this entrepreneurial spirit. In the Philippines, small and medium-sized enterprises comprise the majority of all business establishments and about 60% of the exporting firms in the Philippines. 55% of the Philippine labor force is employed by SMEs, contributing approximately 30% to total domestic volume sales.
However, many entrepreneurs face challenges expanding their businesses in developing countries in Asia due to a lack of research and development, and inadequate access to technology. These are advantages inherent to many large multinational companies. Financing is a grave concern for most start-ups, since most entrepreneurs starting small business in competitive markets have difficulty acquiring capital and suffer from a lack of good marketing advice and various logistical problems. Continue reading
Foreign direct investment (FDI) has helped to boost the economies of many states in Asia. At the same time, however, it has also had a negative effect on local businesses who may experience lower sales and slower growth rates.
By Anthony Gokianluy
FDI has long been a staple source of income for many nations in Asia. In Southeast Asia, FDI is particularly important in stimulating economic growth, capitalizing on human and material resources to manufacture goods for local consumption or for export. This FDI, as the currency of multinational companies, may also increase employment rates in particular industries.
However, most FDI seeks to penetrate Asian markets specifically for the purpose of capturing market share and introducing new products to untapped consumer bases. Many of the multinational companies that provide a majority of the FDI bring highly advanced production processes and marketing techniques in order to dominate certain industries, such as the food industry. Local businesses, in comparison, do not have the resources or the technological expertise to compete with these multinational companies and end up falling behind in sales and overall competitiveness. Continue reading
New Delhi has actively worked with Beijing to address its massive bilateral trade deficit. However, it has another option. India can seek greater economic integration with ASEAN and substitute its imports from China with that of ASEAN. The India-ASEAN Summit on December 20 would be a good place to start.
By Spike Nowak & Daniel Jacobius Morgan
Dec. 19 – In August 2012, at the ninth meeting of the India-China Joint Group on Economic Relations, Trade, Science and Technology in New Delhi, the main point of concern for India’s Minister of Commerce and Industry, Anand Sharma, was the widening trade deficit between the two countries – $40 billion for the year ending in March 2012. India’s trade deficit with China has increased by a massive 4,000% in the last 10 years.
At the meeting, the Indian and Chinese commerce ministers agreed to set up a joint working group to address trade issues, including the trade deficit. However, India has another option. Instead of relying on the working group to fix India’s trade woes, New Delhi can actively seek greater economic integration with the Association of Southeast Asian Nations (ASEAN). It is important for India to pursue this option at the next ASEAN-India Summit scheduled to be held in New Delhi on December 20-21. Continue reading
Dec. 18 – Singapore concluded an agreement with the European Union (EU) this weekend in a deal that will grant both parties improved access to each other’s markets. Singapore is the first Southeast Asian nation to conclude such a deal, with the agreement seeing the EU eliminating tariffs on all imports from Singapore over a five-year period.
The FTA will remove 80 percent of all Singapore-EU tariffs, with exporters of electronics, pharmaceuticals, chemicals and processed foods benefiting the most. Government procurement will also be affected with both sides making extensive commitments that guarantee access to the other’s services markets – good news also for the financial services industry. Continue reading
2point6billion.com provides news and analysis on foreign trade in south east Asia, with a particular focus on China and India. The stories are contributed by the foreign direct investment experts at Dezan Shira & Associates, who have offices throughout China, India and Vietnam.