The Chinese government has approved plans for the country's fourth harbor area with preferential tax rates in a major step towards a free trade zone with the Association of Southeast Asian Nations (ASEAN).
The State Council authorized the Yangpu Bonded Harbor Area in the Yangpu Economic Development Zone, south China's Hainan Province, covering 9.21 sq km and to be completed in three stages.
By 2010, China and Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, will impose zero tariffs on most products, while China and the four newer ASEAN members of Cambodia, the Laos, Myanmar and Vietnam will do the same in 2015.
The China-ASEAN free trade area has a population of 1.8 billion and two trillion U.S. dollars in gross domestic product (GDP). It will become the third largest global trading region after the European Union and the North America Free Trade Zone.
Bottom line: We need to recognize that Asia is here to stay and is going to be a major competitor. Protectionism will not help us. Congress will have to continue to follow pro-growth and pro-wealth-creation policies.
Investments in Asia, meanwhile, will continue to produce above average returns because of the pro-growth policies followed by the Asian countries.
More on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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