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ASEAN; China: Investment Deal

(Aug. 24, 2009) On August 15, 2009, the Association of Southeast Asian Nations (ASEAN) and the People's Republic of China concluded the ASEAN-China Investment Agreement, the third trade-related agreement between the two parties. It was signed in Bangkok, Thailand, by the economic ministers of the ten ASEAN nations and by China's Trade Minister, Chen Deming, following seven years of discussions. Speaking about the comprehensive agreement, Indonesian Trade Minister Mari Elka Pangestu said that the “core point is not liberalization, but investment facilitation, promotion and the creation of legal certainty. … Now we have a clear platform to develop economic integration with one of the world's key economic players.” She expressed the expectation that the agreement would lead to increased investment in the ASEAN nations from China. (Sri Wahyuni, ASEAN, China Sign Investment Agreement in Bangkok, THE JAKARTA POST, Aug. 16, 2009, available at

The new Investment Agreement, together with earlier agreements on trade in goods and services, opens the door for the China-ASEAN Free Trade Area (FTA), set for January 1, 2010. Chen described the future arrangement as “an advanced FTA that covers an extensive area of 13,000,000 square kilometers with a population of 1.9 billion.” (China-ASEAN Investment Agreement Signed, XINHUA, Aug. 15, 2009, available at

The Investment Agreement has 27 clauses and provides for a free and transparent investment mechanism for investors from both sides, including most-favored-nation treatment, citizen treatment, and equitable treatment on reciprocal investment. The new accord fits into the China-ASEAN Framework Agreement on Comprehensive Economic Cooperation, signed in 2002. China is considered a major trade partner of the ASEAN nations and is ASEAN's fourth largest export market, as well as being the third largest source of imports into ASEAN and the eighth largest investor in the region. (Id.)