China-ASEAN FTA  Benefits China's Textile Export

Since China and the ASEAN started their tariff reduction process on July 1, 2005 on the basis of the China-ASEAN Free Trade Area agreement, the ASEAN would gradually lower its tariff upon Chinese textile and apparel, which may increase China's textile export to this region.

According to figures from the China Chamber of Commerce for Import and Export of Textiles, Thailand and Malaysia's previous tariff rate upon textile and apparel import from China averaged at 21.5% and 16.8%, and the rate dropped to 16.9% and 15% from July 1, 2005, and will drop to 10.6% and 9.2% from Jan. 1, 2007.

The two countries will lower their tariff upon Chinese textile goods to zero in 2010, and the Philippines will reduce its textile tariff in a similar way.

Indonesia, with its tariff rate against Chinese textile goods below 5%, will directly lower it to zero in 2009. 

Vietnam's previous textile tariff rate was as high as 36.6%, and it dropped to 31% after July 1, 2005, and will drop to 27.2% in 2006. It is expected to reach 26.6% in 2007, 22.8% in 2008, 19% in 2009, 12.6% in 2011, 5.8% in 2013 and zero in 2015. 

Beginning from July 2005, China, Brunei, Malaysia, Indonesia, Myanmar, Singapore and Thailand gave tariff cuts to each other on 7,455 kinds of commodities. The practice was launched in compliance with the Trade in Goods Agreement of a Framework Agreement for Overall Economic Cooperation between China and the ASEAN countries.

By 2010, China and six old ASEAN member nations, including Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, will impose zero tariffs on most normal products, while China and the other four new ASEAN members of Cambodia, the Laos, Myanmar and Vietnam will do the same in 2015.

The China-ASEAN FTA has a population of 1.8 billion and two trillion U.S. dollars in gross domestic product (GDP). It will become the third largest global trading region after the European Union and the North American Free Trade Zone.

During the January-November period of 2005, China exported textile and apparel worth 5.08 billion U.S. dollars to the ASEAN, growing 22.4% year on year and accounting for 4.8% of China's total textile export. 

Meanwhile, China imported textile and apparel worth 620 million U.S. dollars from the ASEAN, growing 5.8% year on year and making up 4% of China's total textile import.

Back to Index of January 2006