A BEACON FOR COOPERATION: The 11th China-ASEAN Expo is held in Nanning International Convention and Exhibition Center on September 16-19 (HUANG XIAOBANG)

Financial connectivity

"We should actively advance preparation for the establishment of an Asian infrastructure investment bank, so as to address financing bottlenecks in the region, especially in Southeast Asia, and promote common development among countries," said Zhang at the opening ceremony.

The proposal has gained extensive support from a number of ASEAN countries. Thai Foreign Minister General Thanasak Patimaprakorn expressed his belief that the bank will facilitate mutual connectivity and speed up the integration of China and the ASEAN member countries.

Since 2009, the People's Bank of China has striven to eliminate restrictions on the use of renminbi in the settlement of cross-border transactions and to formulate a policy framework for cross-border renminbi use. So far, policy barriers hindering cross-border renminbi pricing and settlement have been largely removed in terms of cargo and service trade, and inward and outward foreign direct investment.

Yang Hongsen, General Manager of Xinhua Zhejiang Bulk Commodity Exchange Center, said that the renminbi exchange rate reform should begin with the establishment of a regional currency trade system in ASEAN countries. China's predominant position as well as extensive cooperation with these countries has engendered a favorable environment in which to realize the regionalization of the renminbi.

He noted that the Chinese banks should set up more exchange centers for the renminbi and currencies of ASEAN countries to extend the channel for the renminbi beyond borders. In this way, the renminbi will be widely used in lending and borrowing, settlement and payment, asset management and exchange risk control, meaning people in other countries will stand to benefit more from China's high-speed economic growth.

Beyond that, the innovation of cross-border renminbi business will also facilitate regional trade and investment and push the countries involved to establish closer financial ties. Zhu Mengnan, Vice Dean of the School of Economics at Xiamen University, argued the innovations would primarily relate to China's capital account and current account.

As far as the capital account is concerned, Zhu said the focus should be on opening overseas renminbi bond markets. Meanwhile, efforts should be made to tap into the potential of the current account. According to statistics, roughly 16 percent of Chinese offshore trade is settled in renminbi. In stark contrast, 80-90 percent of American offshore trade was settled in dollars in 2013.

Accompanying the process of innovating cross-border renminbi business, financial supervision departments should also attempt to fend off potential risks, said Zhu. He suggested that a refined monitoring mechanism should be put in place to supervise the flow, stock and scale of renminbi in the overseas market, ensuring that positive results can be generated for all.

Key Points of Chinese Vice Premier Zhang Gaoli's Speech

Deepening mutual political trust

China is willing to be the first country to enact a treaty with ASEAN countries on good-neighborliness, friendship and cooperation. China proposes that an informal meeting among Chinese and ASEAN leaders be held in China on an irregular basis in conjunction with the China-ASEAN Expo and the Boao Forum for Asia.

Improving the quality and performance of the CAFTA

China welcomes the official launch of negotiation between the two sides on upgrading CAFTA and suggests that a working plan for the next stage be determined as soon as possible.

Both sides should open the market wider, reduce tariffs, carry out a new round of negotiation on service trade commitments, sign cooperation agreements on small and medium-sized enterprises, energy, the environment and sustainable development, as well as deepening economic, trade and investment cooperation.

China welcomes the efforts of ASEAN countries in setting up industrial parks in China, and is willing to discuss with ASEAN countries the possibility of establishing cross-border economic cooperation zones in border areas.

Strengthening connectivity

Both sides should enhance planning and focus on key corridors, links and projects, in addition to stepping up efforts to build networks for maritime and river transport, high-speed roads, high-speed railways, aviation and optical cable communications.

They should accelerate the building of the China-ASEAN Port Cities Cooperation Network and the China-ASEAN Public Information Platform for Port Logistics, and push forward preparation for the establishment of an Asian infrastructure investment bank.

Both sides should also widen the scale and scope of arrangements for bilateral local currency swap, expand the cross-border renminbi trade settlement, set up a trading center for the renminbi and currencies of ASEAN countries, and advance cross-border cooperation in financial infrastructure development and financial services.

Conducting maritime cooperation

China hopes to exchange views with ASEAN countries about designating next year as the "Year of China-ASEAN Maritime Cooperation," to strengthen dialogue and communication between departments in charge of maritime affairs, to enhance exchanges and cooperation on maritime policies, and to explore the possibility of setting up an exchange and cooperation mechanism between maritime law enforcement agencies.

Both sides should make full use of the China-ASEAN Maritime Cooperation Fund to boost exchanges and cooperation on marine and maritime economy, connectivity, environmental protection, safety and culture.

Pushing forward sub-regional cooperation

Efforts should be made to push for progress in the building of the Nanning-Singapore Economic Corridor. China is ready to set up a dialogue and cooperation mechanism with countries along the Mekong River.

Increasing cultural and people-to-people exchanges

China will deliver on its commitment of providing 15,000 university scholarships for students in ASEAN countries. Both sides should ensure the success of the over 100 cultural events jointly held, strengthen cultural links and friendship between the people of the two sides, jointly cement the public and social foundation for their relations, and promote the Asian spirit of unity, cooperation and mutual assistance.

(Source: Xinhua News Agency)

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