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China Free Trade Area (CFTA), also called as China–ASEAN Free Trade Area is a free trade area among the ten member states of the Association and the People's Republic of China. The initial framework agreement was signed on 4 November 2002 in Phnom Penh, Cambodia, with the intention to establish a free trade area among the eleven nations in 2002 The free trade area came into effect on 1 January 2010.
Several days following the implementation of the free trade area, it announced plans to renegotiate tariffs on 228 product categories. In exchange, Indonesia would accelerate implementation of the agreement on 153 categories.
People's Republic of China
China first proposed the idea of a free trade area in November 2000. It had overtaken the United States as the third largest trading partner of ASEAN, after Japan and the European Union, when the free trade area came into effect.[14] Between 2003 and 2008, trade with ASEAN grew from US$59.6 billion to US$192.5 billion.China's transformation into a major economic power in the 21st century has led to an increase of foreign investments in the bamboo network, a network of overseas Chinese businesses operating in the markets of Southeast Asia that share common family and cultural ties.China is also the world's largest exporter.
Tariffs
The free trade agreement reduced tariffs on 7,881 product categories, or 90 percent of imported goods, to zero.This reduction took effect in China and the six original members of ASEAN: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The remaining four countries will follow suit in 2015. The average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 to 0.6 percent on 1 January 2010 pending implementation of the free trade area by the remaining ASEAN members. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 to 0.1 percent.
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