Will it be the rising tide that lifts all boats from Beijing to Jakarta, or one that further fuels the rise of China's economy but at the expense of many in its neighbouring countries?
The dignitaries were all smiles here at the Association of Southeast Asian Nations (ASEAN) summit, celebrating the free trade in goods accord Monday with China that will take effect July 1.
But, behind the scenes, delegates from ASEAN, some in high positions, were at best ambivalent about what they had gotten themselves into, reports UPI.
"Whether we like it or not, we've got to trade with China," maintained Winichai Chaemchaeng, the deputy director of Thailand's trade negotiations department.
To be sure, there is definitive cause for optimism. The China-ASEAN free trade area will be a market of two billion people with a GDP of around $2 trillion.
Total trade between the two was worth $80 billion in the first 10 months of 2004 alone, and may well reach $100 billion by the end of the year, ASEAN Secretary General Ong Keng Yong said.
Trade in produce between China and ASEAN, which saw reduced tariffs as of this year, is up 42 percent in the first 10 months of 2004.
Moreover, trade is growing at a remarkable rate already. Just two years ago China exported $23.2 billion to ASEAN, while ASEAN exported $19.5 billion worth of goods to the Middle Kingdom. A conservative estimate, Yong said, would see ASEAN-China trade grow to $140 billion by 2010 - but it could very well be over $200 billion.
The US is currently ASEAN's largest trade partner with trade estimated at $120 billion this year. The European Union is second and should hit $110 billion with ASEAN in 2004.
So how big will ASEAN's piece of the pie be?
In some sectors, mainly natural resources and middle-range electronics, ASEAN countries may reap a windfall by adding a tariff-free market that includes more than 100 million middle-class people.
The seemingly insatiable Chinese appetite has been gobbling up nearly every power source it can get its hands on.
In a multi-pronged approach to make up for some of the trade balance it will lose, ASEAN is taking steps to re-brand itself as a place for foreign investment.
The favourite child of foreign direct investment before the Asian financial crisis, ASEAN is attempting to draw back some of that money from Europe, the US, and Japan which has increasingly flowed to China.
One clear advantage to the FTA with China will be more and cheaper goods for domestic consumption in ASEAN countries, which will benefit the domestic economies, a spokesman said.
--Indo-Asian News Service