The growing economy of China is serving as an "engine" for the development of the region and even of the world, a Filipino economist said Sunday.

Member states of the Association of the Southeast Asian Nations (ASEAN), in particular, are benefiting from the increasingly extensive and deep cooperation with China, said Ellen H. Palanca, a professor of the Economic Department and director of the Chinese Studies Program in the prestigious Ateneo De Manila University.

"As an engine for the regional economy, China is providing more export opportunities for ASEAN countries," Palanca said in an interview with Xinhua on the eve of the inauguration of a Chinese studies center.

She said the Philippines, for example, has seen its trade with China increasing since 1998.

Official statistics showed that China became the fourth biggest trade partner of the Philippines in 2004 from the 12th in 2001. Bilateral trade hit 13 billion US dollars in 2004, better than expected.

Based on the progress, the two governments have estimated that in five years the Sino-Philippine trade volume could reach 20 billion dollars.

The implementation of the Free Trade Agreement (FTA) between ASEAN countries and China on July 1 this year will, hopefully, give another impetus to the development of their trade, Palanca said.

The FTA, which was signed by ASEAN and China at a summit in Laos last November, set the strategy for expanding bilateral cooperation in trade, service and investment.

The Philippine government expects to see a hike in the two countries' trade as more kinds of merchandise are allowed into each other's market, while bracing for challenges ahead.

"Surely, ASEAN countries including the Philippines will meet great challenges in a more competitive arena, but we are more eyeing the opportunities brought by China," said Palanca.

She noted that whether ASEAN countries can be the beneficiaries or the victims depends on how they prepare themselves within the new cooperation framework.

"China is becoming a center of the segmental production process in the region, and so providing participation opportunities for its neighbors. We can produce the segments for China to assemble them," Palanca said.

Like Japan recovering from the 1997 financial crisis with help from the economic relations with China, the Philippines that is geographically and historically close to China can also take advantage of its growing power, said the professor.

"What matters most is that we have to find our new niches in face of the challenges," she stressed.

The view is shared by Ramon Vincente Kabigting, director of the Bureau International Trade Relations from the Department of Trade and Industry. Kabigting told Xinhua that Filipino manufacturers and exporters have their eyes and ears on the demand of Chinese business partners and consumers while rearranging their production accordingly.

"We are ready for the constructive cooperation and competition with China within the framework of the FTA," said Kabigting.

The economists also see the need to enhance bilateral understanding and exchanges.

Palanca said the Ricardo Leong Center of Chinese Studies, which will be officially launched on Sept. 1, is aimed at helping Filipinos appreciate China in all its aspects, so as to be able to engage China in a constructive way.

"The emergence of China as one of the world's biggest economies,the successful bid of Beijing to host the 2008 Olympics, and the centuries of relations between China and the Philippines are just a few of the reasons why it is important for Filipinos to understand China and engage her for the mutual benefit of both countries," she said.

Source: Xinhua