Other statistics showed that between 2003 and 2007, the trade volume between Guangxi and ASEAN countries tripled; paid-in investment to Guangxi from the ASEAN area increased 1.8 times and that from Guangxi to ASEAN increased 5.4 times.

Development strategy

To better take advantage of the CAFTA, a Beibu Gulf Economic Zone was created in March 2006. Guangxi is at the northernmost point of the gulf, which is the largest in the northwest part of the South China Sea.

In January 2008, the Chinese Government approved the development plan of the Beibu Gulf Economic Zone, including it in the national development strategy blueprint. This is China's first and only regional and international economic cooperation area.

"The development of the four cities in the Beibu Gulf features the heavy chemical industry and port logistics and relies on supporting industries in other parts of Guangxi. It's like the relationship between forefront and rear," said Du Ping, an official with the National Development and Reform Commission.

With the support of the Central Government, a batch of key industrial projects were started in the Beibu Gulf Economic Zone. Projects under construction, and those planned add up to a total investment of 300 billion yuan ($43 billion). Now the economic zone has become the engine for the economic development of the whole region.

"The growth rate of the Beibu Gulf zone surpassed 16 percent over the last two years. In the next three years its economic aggregate should take up 33 percent of the whole region," said Guo.

Though the international and domestic economy is slowing down, the Beibu Gulf zone has maintained strong growth momentum in the first half of 2008, achieving an increase of 17 percent over the same period last year, 4.5 percentage points higher than the region's average, according to Chen Ruixian, an official with the management committee of the economic zone.

Chen also noted that Guangxi has decided to allocate an annual 1 billion yuan ($144 million) for the next five straight years from 2008 toward infrastructure construction in the key industrial parks in the gulf economic zone. "Such a big allocation indicates the region's resolution and confidence to step up gulf zone economic development," said Chen.

"We are expanding our cooperation to let more investors into the gulf zone," said Guo. By 2010, the gulf zone will become a nest for such pillar industries as petrifaction, metallurgy, food processing and electronic information, achieving a total industrial output value of 300 billion yuan ($ 43 billion), doubling that of 2007.

In May 2005, the Qinzhou Bonded Harbor Area was sanctioned to be established as the core platform of the development of the Beibu Gulf Economic Zone. This is China's sixth economic zone and the first in the country's western region, with a planned area of 10 square km.

"The establishment of the Qinzhou Bonded Harbor Area is an important means for the gulf zone to be involved in the global economy," said Chen, who added that Guangxi would earmark a special fund of 445 million yuan ($64 million) to support the project's construction in the harbor area.

Beibu Gulf has a big development potential because of its rich resources and favorable ecological system, said China's reputed economist Fan Gang.

The gulf zone will be China's fourth growth powerhouse after the Yangtze River Delta, the Pearl River Delta and the Bohai-rim Economic Circle, according to Li Wuwei, Vice Chairman of the 11th National Committee of the Chinese People's Political Consultative Conference.