The second China-ASEAN Expo was held in Nanning, Guangxi last October where more than 2,100 companies from 31 countries and regions signed 389 agreements. The Pan Pearl River Delta (PPRD) region is involved in more than two thirds of these projects.

The PPRD is evolving into a key bridgehead of trade and economic cooperation between China and ASEAN, which jointly boast 1.7 billion consumers and are planning to build a free trade area before 2010.

The PPRD region, also know as "9+2", is the largest regional combination in China, encompassing Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Hainan, Sichuan, Guizhou, Yunnan as well as the Hong Kong and Macao special administrative regions.

Gateway to China's market

The rapid development of the PPRD bloc in the past two years had helped it gain more attention from ASEAN member nations. For example, in a 2004 visit to China, the Thailand Prime Minister Thaksin Shinawatra was impressed with developments in Guangdong, and was attracted to opportunities offered by "9+2". Later, he sent his Director-General of Trade to lead a delegation to attend the second PPRD Forum in Chengdu, Sichuan province last July to observe the proceedings of the regional cooperation. Since then Thailand has expressed growing interest in expanding economic opportunities offered by ASEAN and the PPRD region.

According to the Xinhua News Agency, the ASEAN business circle has witnessed several proposals to China's "eleventh five-year plan" saying the country plans to encourage provinces to join hands in development during the next five years. Such cooperation is expected to generate new opportunities for foreign businesses to interact with China. The PPRD will prove to be the best gateway for ASEAN businessmen to enter China's market.

Energy & Raw Material Imports

For the PPRD, ASEAN is a strategic international market and a major exporter of energy and raw materials. In the first half year of 2005, the PPRD purchased finished oil, liquefied petroleum, gas and coal valued at 530 million USD, 160 million USD and 150 million USD respectively from ASEAN countries. Also within those six months, ASEAN countries sold 190 million USD worth of timber and natural rubber to the PPRD.

The PPRD's foreign trade with ASEAN countries in the first half of 2005 reached 21.22 billion USD, up 14.7 percent from 2004. The PPRD purchased 13.46 billion USD worth of products from ASEAN countries while its export to those countries was 7.75 billion USD, an increase of 8.4 percent and 27.5 percent respectively. Thanks to the China-ASEAN tax deduction scheme launched in July, 2005, ASEAN became China's fourth largest trade partner, further enhancing its ties with the PPRD region.

Cooperation Prospects

Besides import and export, resource exploitation projects such as forestry, fishing and farming have created better business opportunities for the PPRD and ASEAN. ASEAN countries' agricultural products, especially fruits that grow only in tropical areas, have huge market potential in China. Meanwhile, Guangdong's manufacturing sector, Hong Kong's and Macao's service industry and mining industries in Yunnan, Guizhou and Guangxi have existing and potential business partners in ASEAN countries.

Finally, there are growing economic and social gaps between PPRD members, which also exist among ASEAN countries. Closer cooperation between these two regions will increase opportunities for the underdeveloped areas to receive industries relocated from prosperous areas.

Editor: Yan