No use bargaining

China invested 1.5 billion Yuans in the construction of the first free trade area (Horgos checkpoint). There are more than two hundred ventures operating there and their number is constantly growing. The second trade area will be located in the North of Xingjian Uigur Autonomous Region (Jimunai checkpoint) - the construction of first facilities has already started. The volume of investments in the zone establishment is estimated in 20 million yuans, but it is not excluded that this amount will be much higher.

It is interesting that the Chinese side creates free trade areas quicker than the corresponding documents are inked between the sides. Kazakhstan and China have not defined the taxation and investment regime, which will operate in such areas. There is no clarity with the visas either. It is suggested that the Chinese citizens entering a free trade zone will be able to produce their ID, while Kazakhstani people will still have to pass a simplified registration and stay in the area for one day without a visa.

However, China is not satisfied with a prospect of trading with sole Kazakhstan anymore. It would like to have an access to the entire Central Asian region. That is why at the last session of the Shanghai Co-operation Organisation (SCO) Wen Jiabao, premier of the China State Council expressed an idea of creating a common Asian market.

Actually the SCO plans do include a creation of a free trade area, but originally it was planned not earlier than 2020. Now it is obvious that China does not have an intention to wait too long for this.

Xinhuanet, Chinese information agency, reports that judging from the current development of China, the total volume of its export-import will surpass USD 1.2 trillion this year and that the speed of growth will reach 30 per cent. If such tendency is maintained, then in the nearest future China will become the third trade power in the world after the USA and Germany (in 1978 China was at the 32 place in the world foreign trade rating and at the fifth one in 2002). Non-government ventures have become the motive force in the development of Chinese foreign trade. Their production share in the total export volume of the country has grown from 7 per cent in 2001 to 13.7 per cent in 2003.

But these successes are accompanied with big problems, the chief one of which is a growth of commercial disputes. The leading commercial countries to protect their domestic market more and more often use the anti-dumping and technical trade barriers. According to Chinese officials, in the last few years a number of countries uses too many anti-dumping measures. China has already become a country, against which the biggest number of anti-dumping measures were applied, regarding first of all non-precious metals, chemicals, machine engineering products, audio- and video equipment, mixed types of products, textile, glass and porcelain exported by China.

It is clear that the international protectionism restrains the development of export and China has to seek new ways of commercial co-operation.

But in the case with the SCO China almost doesn't have any supporters. Only Uzbekistan shows its loyalty towards an idea of creating a common market. Other countries are afraid that the opening of borders for foreign commodities can harm their national producers, which still stand firm on their feet. And if Asian countries prefer to avoid an unpleasant subject in an Oriental manner, Russia openly discusses it, moreover, the estimations of this initiative are chiefly negative: such a hurried creation of the common market will not be useful for anyone except for China. That is why Russia says that bargaining on the reduction of terms is not adequate.

While there are discussions in the Central Asian region about advantages and disadvantages of the free movement of commodities, at the other end of the subcontinent there is a number of countries that, on the contrary, initiate a creation of free trade areas with China, without putting this necessity under doubt. The Association of South East Asian Nations (ASEAN) expressed its interest in an accelerated formation of a free trade area with China at a commercial investment forum as of November 3 in China.

In particular, heads of ASEAN member states note that the integration of regional economy has already become a tendency. The volume of bilateral trade last year reached USD 78 billion and according to preliminary estimations it will surpass 100 billion in 2004. Several ASEAN countries actively co-operate with China in agriculture, textile industry, oil & gas, electric power, human resources, but the format of co-operation must be widened. There are 500 million persons living in South East Asia, its GNP is nearly equal to China. Therefore commercial and economic co-operation should be strengthened and the competitiveness should be increased. It is more realistic to achieve this by means of creating a free trade area.

In the relations between the ASEAN countries and China political implications are unlikely to become a decisive factor, unlike the relations between China and Central Asia. Political scientists already now are trying to guess what is more important for China - to win the markets of Kazakhstan, Russia, Uzbekistan, Kyrgyzstan, and Tajikistan or to establish its domination in the region. There are many points of view on this, all of them different.

Perhaps, it is true that behind the economic interests of China there are real ambitions. It is well-known that currently the region has become a crossroads, where Russia, USA and China met. Each of them has its own interests here and each would like to dominate over the whole of Central Asia. No concessions are expected. Perhaps that was the reason why China initiated an establishment of the SCO and became its full member - it is the only international association in which the Celestial Empire participates. And therefore the creation of a common Asian market is of utmost importance for it.

But of course, one can't say that economic interests are completely absent from this idea of China's. On the contrary, they are primary. Without a discovery of new Americas, the Chinese economy and the Chinese people are approaching an economic disaster. China already takes measures to restrain the economic growth. Each able-bodied Chinese person should have a job, which is impossible when the economic growth is stable. Therefore China has nothing to choose apart from expansionist policy.

It is obvious that we are already under its influence. But how much we are going to perceive it in the future depends solely on us.