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Laos-China trade reaches new high
Trade between Laos and China amounted to US$566 million in the last six months, a 59.3 percent year-on-year rise, thanks to the establishment of the Asean-China Free Trade Area (FTA).
The growth of trade between China and Laos was higher than the 54.7 percent average increase in trade between China and all Asean countries, according to Chinese customs statistics qouted in a report issued by the Chinese Embassy to Laos.
Exports from Laos to China were valued at US$284 million, a 55.6 percent increase, while imports from China to Laos were worth US$283 million, a 63.2 percent rise.
Laos’ major exports to China are mineral resources, furniture, agricultural products and handicrafts, while the main goods imported from China to Laos are electrical equipment, construction materials, power, automobile accessories and commodities.
During the global financial crisis, China and Southeast Asia pressed on with developing their free-trade area with great success.
Sino-Lao trade increased against the wind. According to an Asia Bank survey, Laos’ import and export trade volume was US$3.38 billion in 2009, a drop of 10.08 percent compared to the previous year.
However, Sino-Lao trade increased in spite of these conditions. According to statistics from China, Sino-Lao trade in 2009 reached US$744 million, a 77 percent increase from the previous year. Among all East Asian countries, Sino-Laos trade grew the most.
Since the Asean-China FTA was established on January 1, 2001, average tariff rates from China to Asean have decreased from 9.8 percent to 0.1 percent, with a zero tariff being imposed on more than 90 percent of Asean products, according to the Chinese Embassy to Laos.
At the same time, the average tariff from Asean to China has decreased from 12.8 percent to 0.6 percent, with the six older member countries (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand) imposing a zero tariff on more than 90 percent of Chinese products. The four newer Asean member countries (Laos, Vietnam, Cambodia, and Myanmar) will achieve this target by 2015, but currently benefit from the unilateral zero tariff from China.
For the six months just gone, Lao investment in China was worth US$8.93 million, a 267.5 percent year-on-year rise; and non-finance investment in Laos from China was worth US$140 million, a 136.5 percent increase on last year, according to a report from the Chinese embassy.
By the end of June 20l0, cumulative direct investment in China from Laos had reached US$37.09 million, and non-finance investment in Laos from China had reached a cumulative figure of US$628 million.
The report quoted statistics from the Ministry of Planning and Investment saying, in the first half of the year, Chinese enterprises have invested in 16 projects in Laos to the tune of US$340 million, replacing Thailand for the first time as Laos’ biggest foreign investor.
Since the foundation of the Asean-China FTA in 2001, the improvement of convenient leverage has been the most significant factor in the rapid progress of Chinese investment in Laos.
So far, 18 Chinese-funded hydroelectric development projects have been permitted in Laos, with gross installed capacity up to 5.3 million kilowatts. Chinese companies have also carried out projects in mining and other sectors.
Chinese enterprises have been granted approval for tens of thousands of hectares of processing space for agricultural and forestry activities, such as rubber, rice, sugarcane cassava and paper production.
It is believed that increasing Chinese investment in such areas will provide more employment in Laos, speed up social and economic development and increase exports.
Vientiane Times
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