Yang detailed these measures to ambassadors of ASEAN countries in Beijing on April 12. He said the measures would not change despite the postponement of the summits. "China will firmly support ASEAN's integration process, community building efforts and leading role in regional cooperation as always," he said. "We are confident about the prospects of ASEAN and the friendly cooperation between China and ASEAN."

Free trade area

Having learned a lesson from the Asian financial crisis in 1997, ASEAN took greater precautions against possible financial crises as it tried to address non-performing loans, regulate financial institutions and strengthen cooperation with East Asian countries, Xu said. He believes these earlier efforts have prepared them for confronting the current international financial crisis.

Shi echoed Xu's views, saying the ongoing financial crisis has not had severe consequences for most East Asian and Southeast Asian countries' financial systems because of the financial reforms they initiated in the wake of the Asian financial crisis in 1997. Its impact has instead been felt in their export sectors. As a result, countries in the region, including China, are seeking to stimulate domestic demand to lessen their dependence on foreign markets, he said.

Against the backdrop of the financial crisis, the countries have also shown a growing desire to establish a regional financial market, he added. However, since their economic development remains at a low level, they may find it difficult to realize the goal at present. First of all, they need to agree on the rules for their regional financial market, Shi said.

He pointed out that when the China-ASEAN free trade area is established next year, they would have a greater need for a regional financial market to facilitate their trade and investment.

According to previous plans, China would sign an investment agreement with ASEAN after the ASEAN Plus China Summit to mark the conclusion of their free trade negotiations. The China-ASEAN free trade area is expected to take shape as scheduled in 2010.

The China-ASEAN free trade area, with a population of 1.9 billion, is poised to become the third largest market in the world, after the European Union (EU) and the North American free trade area.

China and ASEAN began the process of setting up a free trade area in November 2002, when they signed a framework agreement on comprehensive economic cooperation at the Sixth China-ASEAN Summit. Under the agreement, they will establish a free trade area by 2010, while allowing the four new ASEAN members-Laos, Cambodia, Myanmar and Viet Nam-an additional transitional period of five years before they fully join the free trade area in 2015.

In July 2005, their agreement on trade in goods went into effect, leading to tariff cuts for more than 7,000 kinds of commodities. The two sides signed an agreement on trade in services in January 2007.

The China-ASEAN free trade area will contribute not only to economic and trade cooperation between China and ASEAN, but also to the economic growth of all countries in the region and to East Asian economic integration, said Xu.??

He believes the huge market potential that has yet to be developed in both China and ASEAN is a major advantage of the China-ASEAN free trade area. Complementariness is also important. China needs to import mineral resources, rubber, oil, gas and coal from ASEAN to power its growing economy, he said.

One of the prime reasons why ASEAN has been able to move out of the dark shadow of the 1997 Asian financial crisis and generally maintain a good momentum of economic growth in recent years is that its exports to China have been growing rapidly, much faster than the growth of its exports to Japan, the United States or the EU, he added.

According to China's Ministry of Commerce, trade between China and ASEAN exceeded $230 billion in 2008, up 13.9 percent over the previous year and making ASEAN China's fourth biggest trade partner. By the end of 2008, their mutual investment had reached nearly $60 billion.

Following China's lead, ASEAN's other dialogue partners such as Japan and South Korea are also building free trade areas with ASEAN, moves that are conducive to ASEAN's integration and efforts to cope with the financial crisis, he said.