Resources for China-ASEAN relations.

As a research institute based in Singapore, the EAI monitors developments in relations and interactions between China and the individual countries of Southeast Asia as well as the ASEAN grouping as a whole. This material is presented in the form of (1) a chronology of events, and (2) important documents.

--the Editors

CHINA-ASEAN RELATIONS, OCTOBER 2007 TO MARCH 2008: CHRONOLOGY OF EVENTS

OCTOBER 2007

15th China approves plans for the country's fourth harbour area with preferential tax rates in a major step towards a free trade zone with ASEAN. The State Council, China's Cabinet, authorises construction of the Yangpu bonded harbour area in the Yangpu Economic Development Zone, in Hainan Province, covering 9.21 square kilometres. Three other bonded harbour areas are located in Yangshan of Shanghai, Dongjiang of Tianjin and Dayaowan of Dalian, Liaoning province. China and ASEAN are seeking to establish a free trade area by 2010.

22nd Singapore Prime Minister Lee Hsien Loong sends congratulatory messages to China's President, Premier and Chairman of the Standing Committee following their re-election to the country's Politburo Standing Committee.

In his letter to President Hu Jintao, Mr Lee said the endorsement of the scientific approach to development at the recent Party Congress set the foundation for the next phase of China's development. Mr Lee noted that since China reformed and opened up its economy three decades ago, the Chinese people have overcome many major problems.

In his letter to his Chinese counterpart, Mr Wen Jiabao, Mr Lee says Singapore and China have long enjoyed good relations. Economic and people-to-people links between the two countries are robust and growing stronger. He looks forward to meeting Premier Wen again in Singapore in November to discuss furthering ASEAN-China and Singapore-China ties.

23rd Zhang Xiaoqin, Secretary General of the China-ASEAN Expo Secretariat says China and ASEAN have seen fast growth in bilateral trade with the volume expected to top USD200 billion in 2008, two years earlier than the two sides' expectation. China and ASEAN are now each other's fourth largest trading partners. China and ASEAN have also sped up cooperation and investment on service trade after signing an agreement on service trade in January this year.

28-31st China-ASEAN hold their 4th CAExpo or trade fair in Nanning City. They agree to consider adopting a strategic plan for ASEAN-China Transport Cooperation and an ASEAN-China Maritime Transport Agreement.

Ports play a significant role in bilateral trade and are regarded as a key element for economic development.

The forum was attended by ministers responsible for transportation from ASEAN member countries and China.

The forum also resulted in renewed commitment to improve the investment environment and develop related facilitative policies in order to encourage and further support active participation of the private sector in port infrastructure development.

The forum also undertook joint efforts, under the framework of the International Maritime Organisation (IMO), to further strengthen cooperation in the fields of port state control, maritime safety and security and maritime environment protection.

29th Vietnamese Prime Minister Nguyen Tan Dung visits Yunnan Province to ask the locality to cooperate with Vietnam in exploiting the water resources of the Hong (Red) and Mekong Rivers for mutual development.

In his meeting with Yunnan's leaders, PM Dung also requests the province to continue working with Vietnamese border provinces to accelerate the demarcation and planting of markers on the two countries' borderline to meet the 2008 deadline as agreed upon by their leaders.

29th Vietnam and China agree to adopt measures to maintain bilateral trade growth in order to realise their target of USD15 billion in two-way trade by 2010.

The agreement was reached in Nanning during a meeting between Chinese Deputy Prime Minister Zeng Peiyan and visiting Prime Minister Nguyen Tan Dung. PM Dung and Vice Premier Zeng agree that China would increase the exports of machinery to Vietnam while raising its imports of crude oil, coal and rubber from Vietnam. They said a treaty on animal and plant quarantine is needed to facilitate both sides' imports and exports, contributing to a trade balance between the two neighbouring countries.

They reach a consensus on finalising a five-year plan to facilitate the implementation of an agreement on the expansion of Vietnam-China trade and economic cooperation and a memorandum of understanding on "two corridors and one economic belt."

29th The China-ASEAN Youth Campus is established in Nanning. Part of the efforts to enhance exchanges and cooperation among young people, it was initiated by Chinese Premier Wen Jiabao during the 10th ASEAN-China Summit held in the Philippines on January 14 this year.

China and ASEAN countries have been taking various measures to upgrade cultural exchanges, including holding personnel training, promoting tourism and holding art festivals.

30-1st Nov. Deputy Director-General of Trade Negotiations and head of ASEAN's negotiating group, Winitchai Chamchaeng, reveals that a trade agreement between ASEAN and China has been reached but China is not prepared to liberalise its investment as yet as it has no law concerning the matter.

The deputy director-general expresses his confidence that the agreement will eradicate obstacles in investments between ASEAN and China. He adds that China affirms it will liberalise its investment with ASEAN as soon as it is ready or opens a free market with other trading partners. In addition, ASEAN and China are negotiating their second agreement on liberalising services where both parties are required to submit a list in November. A meeting to review the agreement is scheduled in July next year.

NOVEMBER

1st At the opening ceremony of the 13th ASEAN Transport Ministers Meeting in Singapore, Singaporean Prime Minister Lee Hsien Loong calls upon member countries of the ASEAN to fully liberalise air travel in the region.

Referring to a Roadmap for Integration of the Air Travel Sector, which aims to progressively establish ASEAN-wide open skies, PM Lee said that, "we have to follow through quickly on this, and meet the first milestone of freeing access between ASEAN capitals by December 2008 on time.

"ASEAN transport ministers should therefore step up discussions to achieve an ASEAN single-aviation market by 2015, as envisioned in the Economic Community blueprint." He added that if necessary, ASEAN countries which are ready to move faster could put in place the Open Skies Agreement.

The meeting also saw the signing of the ASEAN-China Maritime Transport Agreement, which provides for greater areas of cooperation between ASEAN member countries and China in maritime matters.

2nd At the Sixth ASEAN-China Transport Ministers Meeting in Singapore, Transport ministers from the 10-member countries of ASEAN and China sign documents on sea and air transport cooperation: the ASEAN-China Aviation Cooperation Framework and an agreement to facilitate maritime links for both passenger and cargo traffic between ASEAN and China.

In a joint statement issued after their meeting, the ministers said they hoped to conclude an air transport agreement aimed at realising a fully liberalised air services regime between ASEAN and China. The air agreement will be in line with the ASEAN-China free trade plan, which both sides expect to achieve by 2010. ASEAN also planned to have a similar arrangement with India later.

6th ASEAN ministers as well as ministers of China, Japan and the Republic of Korea attend the 6th ASEAN Plus Three Ministerial Meeting on Transnational Crime (AMMTC+ 3) held in Brunei.

The ministers note the significant progress of ASEAN's efforts in combating transnational crime through the consolidated cooperation and provision of assistance to ASEAN by dialogue partners, especially China, Japan and the Republic of Korea. During a retreat, the ministers exchanged views on strengthening ASEAN+ 3 cooperation in combating transnational crime by focussing on the emerging challenges of cyber crime and its strong linkages to other transnational crime, such as terrorism and trafficking.

14th The first conference co-organised by ASEAN, the Indonesian authorities, the World Health Organisation (WHO), and Interpol to tackle pharmaceutical counterfeiting in South-East Asia and China opens in Jakarta, Indonesia. The ASEAN-China Conference on Combating Counterfeit Medical Products brought together representatives from drug regulatory authorities, police, customs, pharmaceutical manufacturers and wholesalers, and health professionals from the 10 ASEAN member states plus China. The conference is being held under the auspices of the International Medical Products Anti-Counterfeiting Taskforce, an initiative spearheaded by the WHO that comprises 193 WHO member states and 10 international organisations, including Interpol.

19th More than 100 representatives from China, the United Nations, and ASEAN gather in Beijing for a symposium on UN peace-keeping. The seminar, themed "Challenges for Peace-keeping Activities: Regional Cooperation and Exchanges", was held by the Peace-Keeping Affairs Office of China's Ministry of National Defence.

19th Singapore and China mark a new milestone in bilateral ties when Prime Minister Lee Hsien Loong and visiting Premier Wen Jiabao sign a pact to build an eco-city in the Chinese port city of Tianjin.

The two leaders highlight the importance of the new project, which comes 13 years after the creation of another iconic project, the Suzhou Industrial Park. Affirming that the two governments will give their full support to the new project, Mr Lee said he was convinced the eco-city would "become a symbol of cooperation and friendship between our two countries".

Mr Wen, on his part, said that while the Suzhou Industrial Park crystallised bilateral relations, the eco-city project would become another "highlight" of these ties. The two leaders were speaking to the media after the signing ceremony of the eco-city agreements. They signed the Eco-City Framework Agreement, while the Singapore Minister for National Development, Mah Bow Tan, and Chinese Construction Minister, Wang Guangtao, signed a supplementary pact on the implementation aspects of the project.

When completed in 10 to 15 years, the eco-city will showcase how rapid development can be balanced with sound environmental protection. It will have resource-efficient "green" buildings, while fully plugged into the manufacturing, shipping, R&D and logistics activities of the northern Chinese hub of Tianjin.

Mr Lee noted that the project was not just "another commercial venture", but that it "reflects Singapore's continued commitment to share with China lessons from our developmental experience, adapted to China's conditions and needs". It was envisaged to be a city "which is socially harmonious, environmentally friendly, resource-efficient and which can serve as a model for other Chinese cities".

The two prime ministers also launched the Singapore-China Foundation, which provides opportunities for government officials from the two sides to exchange notes, develop mutual understanding and foster closer ties. Since the establishment of the Foundation in 2004, more than 20 Singaporean and Chinese officials have been awarded scholarships to study at universities in the two countries. The scholarship programmes are to be expanded to the private sector, for which the Foundation hopes to raise $10 million.

Mr Wen spoke at the National University of Singapore at the launch of Business China, an organisation that will aim to provide an economic and cultural bridge between the two countries.

19th Provinces along the economic corridor that runs from China's Yunnan province to Vietnam's Quang Ninh commit to work harder to exploit the advantages offered by the corridor. At the third conference on economic cooperation among Yunnan, Lao Cai, Hanoi, Hai Phong and Quang Ninh, held in northern Hai Phong, Deputy Prime Minister Truong Vinh Trong emphasises that the Yunnan-Quang Ninh economic corridor has great potential.

Bordering Vietnam and other members of ASEAN, the development of Yunnan province will have a direct impact on the economic growth of the ASEAN-China free trade zone, and will be key in driving the whole region's economic development in the future, said the deputy PM.

For stronger ties among the five localities, Deputy PM Trong said that Vietnam is speeding up the construction of important infrastructure facilities in the area, including the Hanoi-Lao Cai, the Hanoi-Hai Phong, and Hanoi-Cai Lan (Quang Ninh) highways and railways, the Lach Huyen deep water port and economic zones at border gates in Lao Cai, Hai Phong and Quang Ninh.

In addition, Vietnam and China are negotiating a revised bilateral road transport agreement to allow vehicles to travel to certain destinations in each other's territory.

20th After the plenary session of the 13th ASEAN summit in Singapore, Southeast Asian leaders hold a meeting with China, Japan and the Republic of Korea (ASEAN plus three) and take part in an ASEAN+1 summit with China. Leaders from Cambodia, Laos and Vietnam (CLV) also participate in a meeting with Japan. Leaders from ASEAN plus China, Japan and the ROK ratify the second declaration on East Asian cooperation. The meeting also adopts a 2007-17 working plan to provide guidelines for further cooperation of the ASEAN+3 mechanism, with the long-term objective of setting up an East Asian community.

The leaders also agree to establish an ASEAN+3 fund which will work to support cooperation projects and activities under its framework. Leaders from China, Japan and the ROK confirm their continued support for ASEAN's lead role in building a future East Asian community as well as for ASEAN's efforts to bridge development gaps.

ASEAN leaders confirm support for the six-party talks and for efforts to work out a peaceful solution to the Korean Peninsula nuclear issues. At the ASEAN+1 summit meeting with China, leaders from the 10-member group and China express their confidence in setting up an ASEAN-China free trade area.

At the CLV-Japan summit, the CLV Prime Ministers confirm their decision to strengthen cooperation and integration, increase their efforts to narrow the development gaps and also to link CLV cooperation with ASEAN's integration initiatives. Japan pledges its support for the development of CLV, especially in infrastructure investment.

ASEAN and China agree to strengthen efforts to ensure food safety between the two sides, especially farm produce imports. A pact underscoring the agreement is signed between the 10-member group and China on the sidelines of the ASEAN 13th Summit. According to the agreement, ASEAN and China will set up an information system related to laws, regulations and standards to be followed by China and ASEAN's member countries. It is also hoped that the system will provide information on diseases, harmful insects and toxics as well as quarantine procedures.

21st At the 11th ASEAN-China Summit held in conjunction with the 13th ASEAN Summit in Singapore, China reiterates its commitment to ASEAN with Chinese Premier Wen Jiabao saying that it remains a key foreign policy of China to develop its strategic partnership for peace and prosperity with ASEAN. He says that in the coming year, China will work with ASEAN in several areas to strengthen their strategic partnership and "elevate our win-win relations".

At the summit, ASEAN and China reaffirm their determination to ensure the early and full implementation of the Declaration on the Conduct of Parties in the South China Sea towards the eventual adoption of a regional code of conduct in the South China Sea. Both sides also agreed to examine ways to promote tourism and work towards a fully liberalised air services regime between ASEAN and China.

ASEAN leaders also note the proposals by China to have an ASEAN-China Environmental Protection Cooperation Strategy conduct a defence scholars programme and host a seminar on enhancing regional capacity for responding to catastrophes. ASEAN leaders also express their appreciation for China's role in the efforts to denuclearise the Korean peninsula.

DECEMBER

2nd China and Vietnam hold a conference in Vietnam's Sa Pa Township in northern Lao Cai province with the participation of 150 economists, strategists and entrepreneurs from both sides, focussing on forming a general mechanism for the Kunming-Lao Cai-Hanoi-Haiphong corridor. China is seeking to expand its export market to Southeast Asia by planning infrastructure development of "Two Corridors, One Economic Belt".

"If the two sides closely cooperate with each other, I believe, the construction of two corridors, one belt between our two countries will be prompted. China has completed building an expressway linking Nanning city to Vietnam's Lang Son, and we are looking to efforts from Vietnam," said the Chinese ambassador to Vietnam, Hu Qanwen. China wants to sign a framework agreement to open border trade, simplifying customs and tax procedures and building an international forex centre to help avoid risks for companies of both sides.

8th At a one-day conference entitled "ASEAN-China Trade Relations: 15 Years Development and Prospects" held by the Centre for ASEAN and China Studies under the Vietnamese Academy of Social Sciences, the academy's vice president Nguyen Xuan Thang says "the CAFTA will create a new foundation for economic and trade relations between the two sides to thrive". Under the CAFTA, China and the older ASEAN members--Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand--will impose zero tariffs on most goods in 2010, and Cambodia, Laos, Myanmar and Vietnam will follow suit in 2015.

29-30th At a two-day forum on cooperation and development in Nanning, business leaders and representatives from China and ASEAN vow to forge close strategic ties among their chambers of commerce and enhance economic cooperation and development.

The participants agree to establish a Sino-ASEAN federation of chambers of commerce. China aims to set up a free trade zone with Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand by 2010. Free trade zones with Cambodia, Laos, Myanmar and Vietnam are expected to be put in place by 2015. China and the ten ASEAN members are speeding up tariff reductions to facilitate a China-ASEAN free trade zone.

China's average tariff on ASEAN goods has been slashed from 9.9 per cent to 5.8 per cent and will further drop to 2.4 per cent by 2009. By that time, the free trade zone will have been established and 93 per cent of products from ASEAN countries will be tariff-free.

JANUARY 2008

2nd The Head of the National Border Committee hails the progress made in the Vietnam-China border marker planting with the recent completion of the work in Lao Cai province as meeting the two nations' public aspirations. Vu Dung, who is also Deputy Foreign Minister says that the event is not only of primary significance to the province but also makes a positive impact on the entire Vietnam-China border area and helps boost friendship and cooperation between the two countries.

The border between Vietnam's Lao Cai province and China's Yunnan province is now clear and marked with a modern system of border markers, enabling the local authorities to manage the border area in an efficient way, contributing to the maintenance of border security.

Dung said that China's establishment of San Sha city, which includes Vietnam's Hoang Sa and Truong Sa archipelagos was not compatible with the agreements between the two countries' leaders and the spirit and content of the ASEAN-China Declaration on the Conduct of Parties in the South China Sea. The Vietnamese leaders and Foreign Ministry had taken measures regarding that erroneous action.

He affirmed that Vietnam would continue direct contact with the Chinese side to resolve the issue. He held that Vietnam had full legal and historical evidence proving its sovereignty over Hoang Sa and Truong Sa archipelagos.

4th A new tariff structure is introduced under Decision No. 106/2007/QD-BTC by the Ministry of Finance in Hanoi. The import-export tariffs of 1,741 categories of goods have been readjusted as of 1 January 2008 to comply with the ASEAN harmonised tariff nomenclature and with the nation's WTO commitments.

The import taxes levied on over 1,700 categories of goods were reduced by 1-6 percentage points. Import sectors included farm produce, fresh fruits, coffee, tea, cooking oil, processed meat, alcohol, beer, cigarette and cement among others. This measure was a conservative reduction from previous levels in a bid to prevent disorder in the country's trade.

Export tariffs were increased as part of the country's target to restrict exports of mining resources and unprocessed products. For example, export taxes on titanium surged from 10 to 20 per cent, 5 to 7 per cent for other processed metals and from 10 to 15 per cent for other unprocessed metals. By contrast, export taxes on scrap metal dropped from 33 to 30 per cent and tariffs on scrap lead also decreased from 40 to 37 per cent. According to the Finance Ministry, the new tax system also matched Vietnam's commitments to the already-signed free trade area agreements of ASEAN-China and ASEAN-Republic of Korea, as well as the others in process: ASEAN-Japan, ASEAN-Australia-New Zealand, and ASEAN-India.

10th According to a study by the Thailand Development Research Institute (TDRI), Thai businesses have failed to take advantage of favourable tariffs under the ASEAN-China free trade agreement (ACFTA) to build up their presence in one of the world's fastest growing economies.

Somkiat Tangkitvanich, a TDRI research director, said Chinese imports under the ACFTA with certificates of origin amounted to merely $251 million, or 1.76 per cent of Thailand's total imports from China.

The figures suggest that Thai companies did not take advantage of the opportunity to import raw materials at preferential tariffs from China. The trade pact took effect between the ten-member ASEAN bloc and China in July 2005, covering both farm and industrial goods. The agreement, covering an economic region of nearly 1.8 billion consumers, represents the largest free-trade agreement area in terms of population, with annual trade estimated at $1.23 trillion.

Thai exporters had been more active in taking advantage of benefits offered under ACFTA, Mr Somkiat said, based on data from certificates of origin issued by Thailand's Foreign Trade Department. "But the figures are still relatively small, accounting for just 12.3 per cent of Thailand's total exports to China," he said.

21-24th Vietnamese Minister of Culture, Sports and Tourism Hoang Tuan Anh attends the 27th ASEAN Tourism Forum (ATF) 2008 held in Bangkok, at which Minister Anh joins his Thai counterpart in presiding over the ASEAN National Tourism Organisations and the meetings of ASEAN Tourism Ministers; ASEAN, China, Japan and the Republic of Korea Tourism Ministers; and ASEAN + India Tourism Ministers.

Discussions at the meetings focused on measures to deal with the impact of tourism crises, promotion of youth and sea tourism, tourism service quality, provision of training for tourism staff and the devising of a mutual recognition agreement for tourism. Vietnam is to host the ATF 2009 ASEAN meeting, "Tourism: Striving for a New Height" in Hanoi, 5-12 January 2009. At the forum, Vietnam also joined the ATF 2008 Travel Exchange with a press briefing introducing the results of Vietnam's tourism activities and its development policies.

29th Vietnam will see a sharp increase in Chinese investment inflow in the coming years, especially in heavy industry, mining and infrastructure construction, says a senior analyst from the Institute of Chinese Studies in Hanoi. Le Tuan Thanh, vice head of the institute's Vietnam-China Relations Department, says Chinese investors poured $369 million into Vietnam in 2006, accounting for nearly half of the investment capital of $740 million that the investors injected into the country between 1991 and 2005.

In the first ten months of last year, the figure was $301 million, raising total Chinese investment capital in Vietnam to $1.5 billion in about 500 projects, thereby ranking in the top 15 foreign investors in the country. Thanh added that more impressive figures will be seen soon, noting several factors that are expected to attract more companies from neighbouring countries.

As China's foreign exchange reserves have increased sharply, it has accelerated its investment activities abroad and in Vietnam. With abundant and cheap labour and its favourable location, Vietnam is considered as a key market and gateway for Chinese investors to promote relationships with other ASEAN countries. He also noted that the two countries are negotiating for many big projects, particularly the bauxite project in Central Highlands Dak Nong province worth over $1 billion. The Vietnamese government has recently agreed to several Chinese investors' building of a 600-hectare industrial-urban-services area in southern Tien Giang province.

FEBRUARY

1st Aat Pisanwanich, Director of the Centre for International Trade Studies at the University of the Thai Chamber of Commerce reveals that Thailand's trade deficit with China is expected to decline to about 45-50 billion baht this year because of expanded exports under the ASEAN-China free trade agreements. The country has seen exports to China increase every year, with the figure rising to 9.7 per cent of total shipments last year against 5 per cent a year earlier.

The healthy export increase came despite the baht's appreciation against the Chinese yuan, which averaged 4.5 baht in 2007 compared with 5.00 in 2001. According to Mr Aat, Thailand's trade deficit with China has dropped every year since 2005 when the country registered a deficit of 80 billion baht. In 2006, the figure fell to 75 billion baht, and to 50 billion in 2007.

Last year, Thailand exported 510.75 billion baht worth of goods to China, up 14.25 per cent, with imports worth 564.91 billion baht, up 8.26 per cent. Imported products are mainly chemicals, fertilisers and electrical appliances. Mr Aat said Thai exports were expected to increase for agricultural products, rubber and tapioca.

However, he warned that Thailand's exports might be affected over the next five years after China announced a "soft landing" policy to limit its strong economic growth to less than 10 per cent. Major imports were machinery and parts, mobile phones and digital processing machines.

4th Indonesian Statistics Agency indicates that the trade deficit with China in the non-oil and gas sector skyrocketed by more than 3,500 per cent from USD35 million in 2006 to $1.28 billion last year. In its latest report, the agency also shows that China emerged as Indonesia's biggest import source for non-oil and gas products in 2007 with total imports of $7.95 billion, superceding Japan's $6.46 billion.

Compared to the country's total non-oil and gas imports, which reached $52.5 billion last year, China dominated with approximately 15.14 per cent, followed by Japan with 12.3 per cent and the United States with 8.98 per cent.

Indonesia's total imports from China within the category jumped by 44.5 per cent that year from the total of $5.5 billion made in 2006, far above the average increase from 2002 until 2006 of 29.6 per cent.

18-20th Thailand holds the 28th ASEAN-China Free Trade Agreement (FTA) conference. Deputy Director-General of the Department of Trade Negotiations, Winijchai Chaemchang, reports that issues discussed during the conference include investment liberalisation. China has refused to liberalise its investment and ASEAN wants to conclude the issue during the conference, he says.

While China has submitted proposals on the ASEAN-China FTA to the ten ASEAN countries, only four countries (Indonesia, Singapore, Myanmar and Thailand) in the region have submitted the same kind of proposals. Mr Winijchai says that the conference will revise trade agreements and cancel non-tax barriers between ASEAN and China. It will also consider expediting tax reductions and outlining measures to facilitate trade.

MARCH

3-5th The 9th meeting of the China-ASEAN Joint Cooperation Committee is held in Chongqing. Senior officials from the foreign ministries of China and ASEAN member states attend the meeting. There is an exchange of views on facilitating substantial and all-round cooperation between China and the ASEAN, and on implementing follow-up actions for the China-ASEAN summit held last year. The Joint Cooperation Committee, set up in 1997, acts as an annual dialogue and coordination mechanism between China and the ASEAN

4th The China-ASEAN Business Council says China and ASEAN became each other's fourth-largest trading partners last year when total bilateral trade rose 25.9 per cent to USD202.5 billion. The two partners met the agreed trade level three years ahead of the mutual target.

The Secretary-general of the ASEAN Chambers of Commerce and Industry, Arin Jira, says further increases were expected and that it was hoped that China would lift duties on some export goods, such as semi-processed steel products. China is currently imposing taxes ranging from 5 to 25 per cent on goods such as slabs.

12th Scholars from China and ASEAN gather at a dialogue in Beijing to discuss measures to increase military modernisation and strengthen regional security and mutual trust. The 10+1 dialogue, the first of its kind, focuses on the causes, measures and ways to achieve military modernisation and mutual trust in regional security.

It also seeks to implement the consensus reached at the 11th China-ASEAN leaders' meeting. The President of the Chinese Academy of Military Science, Liu Chengjun, the organiser of the "China-ASEAN Dialogue Between Senior Defence Scholars" said that discussions would help strengthen the strategic partnership between China and the grouping and play a positive role in safeguarding regional peace and stability.

13th Cebu Representative Antonio Cuenco notes Beijing's apparent influence in the continued delay of the House of Representatives' final approval of the bill defining the Philippine's territorial baselines.

In a news forum, Cuenco, chair of the House Committee on Foreign Affairs, says Chinese Charge d'Affaires Deng Xijun met with him in January to express Beijing's displeasure over the passage of House Bill No. 3216 on second reading last December. The bill defines Philippine territory as including the Kalayaan Islands and Scarborough Shoal in the disputed Spratly Islands.

Cuenco also says he had received from the Philippine Embassy in China a copy of a "note verbale" from the Chinese government dated December 2007. In it, Beijing made reference to the Joint Marine Seismic Undertaking (JMSU) among the Philippines, China and Vietnam after saying that the baselines bill might affect bilateral cooperation in the South China Sea.

By signing the Declaration on the Conduct of Parties in the South China Sea, China and ASEAN countries all committed to exercise self-restraint and refrain from taking actions that would have a negative impact on peace and stability in the region. The document said the JMSU had achieved substantive progress and was "a historical breakthrough in handling the South China Sea issue".

China was said to be shocked by and gravely concerned with this negative development. However, in its latest statement, the Chinese Embassy said the maritime survey in the South China Sea is in line with Beijing's policy of "shelving disputes and going in for joint development".

The Chinese Embassy said the joint accord "complies with the principles of the ASEAN-China Declaration on the Conduct of Parties in the South China Sea and is conducive to maintenance of peace and stability in the South China Sea and the Region at large".

16th According to a Chinese official who asked not to be named, Chinese loans and other forms of aid to the Philippines are not linked to territorial disputes in the South China Sea. He noted that Beijing committed a package of assistance in 2005 to all developing countries in ASEAN and not to the Philippines alone.

"Chinese help to ASEAN countries is sincere", the official said. "We do not attach any political conditions. It's mutually beneficial and will result in a win-win situation." Recently, the spokesman for the Chinese Embassy said the government is worried about the furore over the joint seismic undertaking between the two countries in the Spratly Island Group, with Vietnam later joining in.

Critics say the seismic study violated the Philippines' sovereignty and jeopardised its claim in the Spratly Islands. They also suspect that the undertaking was a precondition for multibillion-dollar official development assistance (ODA) from China that became a funding source for projects now mired in controversies, including the broadband deal with ZTE Corporation as well as the Southrail and Northrail projects.

The Chinese official noted that Manila and Beijing had been contemplating joint oil exploration in the Spradys since 1984, when China was under the leadership of Deng Xiaoping. He also pointed out that there is no specific amount of Chinese ODA committed by Beijing to Manila.

On 12 December 2005, during a meeting in Malaysia for leaders of ASEAN, China and South Korea, Chinese Prime Minister Wen Jiabao reaffirmed Beijing's commitment of $3 billion in aid and loans to ASEAN, with no amount specified for the Philippines.

"China does not make empty promises," the Chinese official said. "It was just a friendly assistance to ASEAN developing countries, so they could catch up with the developed ones and the region could speed up economic integration. It has nothing to do with the South China Sea." The only funding released so far by Beijing to Manila since 2005, the official said, was $270,000 which the previous Chinese ambassador turned over to Vice President Noli de Castro in April last year. The money was to be used for a feasibility study for a low-cost housing project mostly for victims of natural disasters across the country.

The Chinese official also defended a joint agricultural project covering one million hectares in the Philippines, with land to be planted in hybrid rice and corn, with Chinese companies participating. It would be up to farmers and landowners to participate in the project, he said, noting that it would generate jobs and rent for participants.

18th The Secretary-General of ASEAN, Dr Surin Pitsuwan, meets a group of media representatives from ASEAN+3 countries at the Ministry of Foreign Affairs in Bangkok when delivering a keynote address on "ASEAN: Entering a New Decade of Caring and Sharing Community 2015". This address was included in the programme of the East Asia Media Forum on Media Dialogue and Cooperation, hosted by Thailand from 17-21 March.

This forum was one of four activities organised under the theme of East Asia Festival and the Cultural City of East Asia, the initiative of which was endorsed at the ninth meeting of ASEAN+3 Directors-General in 2007 to commemorate the 10th anniversary of ASEAN+3 cooperation. The purpose was to promote people-to-people contact at all levels.

According to Dr Surin, the gathering of media personnel in East Asia for discussions on their cooperation and networking was the first step towards a longer process of consultation. He hoped that the consultation would be extended to other dialogue partners in Asia and beyond, such as India, Australia and New Zealand.

21-24th Media representatives from ASEAN member countries, China, Japan and Korea agree to set up an East Asia Media Forum (EAMF) to boost regional media cooperation. They agree to share news and information, particularly through the internet, with the possibility of creating a common website. They also agree on the need to enhance programmes on media capacity by having internships, fellowships and workshops.

24th The Bank of China (BoC) agrees to cooperate with the Southeast Asian Bank, Vietnam (Seabank), in international payments. Under the agreement, BoC will transfer funds to the Chinese market for Seabank as well as provide letters of credit and handle orders of payment in US dollars. Seabank leaders say as China is a promising market for Vietnamese businesses, the bank has had to establish the relations with a major local bank like BoC in order to meet growing client demands.

The two banks' cooperation will also help Seabank expand its service network and cooperation with other banks over the world. BoC is one of China's four largest banks and among the 20 top banks in the world. In addition to its network throughout China, the bank operates in 28 other countries. The bank has been selected as the sole provider of banking services for the Beijing Olympics.

31st Young people from across the Mekong region arrive in Vientiane in three caravans to attend the first ever Greater Mekong Sub-region (GMS) Youth Forum. The Forum begins as part of activities associated with the Third GMS Summit, and bought together 37 young people representing the six countries sharing the Mekong River to deliver a regional youth message to the prime ministers and other high-ranking officials attending the Summit.

This chronology of events in ASEAN-China relations was sourced mainly from the ASEAN Secretariat web <http://www.ASEANsec.org/>; Straits Times; Bangkok Post; Bernama (Barisan National News Agency); Comparative Connections: An E -Journal on East Asian Bilateral Relations <http://csis.org/pacfor/cc/>; Chinese Ministry of Foreign Affairs <http:www.fmprc.gov.cn>; Far East Economic Review; Peoples' Daily; South China Morning Post; Manila Standard; BBC; Jakarta Post; Borneo Bulletin; Associate Press Newswire and Xinhuanet <http://www.xinhuanet.com>.

Compiled by TENG Slow Song