Treasuring the ASEAN-China Free Trade Area (ACFTA) with 1.8 billion consumers, Laos is further promoting exports to and luring more investment from China, a local senior official told Xinhua in an exclusive interview Wednesday.

"We're encouraging our farmers, our people to grow more, to produce more for export to countries in ACFTA, especially China, Chinese border areas. We'll also improve infrastructure or banking sector to reduce transaction cost and facilitate business," said Somchith Inthamith, Director General of the Department of Economic Affairs under the Ministry of Foreign Affairs.

Lao authorities have actively informed local people, the business circle, especially those in the country's northern part about golden trade and investment opportunities brought about by ACFTA, he said, noting that due to the realization of the area in general and the Early Harvest Program (EHP) in particular, trade volume between Laos and China has recently increased considerably.

"We'll fulfill the trade target of 200 million US dollars this year, up from 141 million dollars last year. Our exports to China grew over 50 percent in the first half of this year, reducing the trade deficit," Inthamith stated.

"By last June, Laos enjoyed zero tariff unilaterally offered by China on 200 lines of products exported to the Chinese market under the EHP, an advanced program of ACFTA," the official said, noting that 91 more items will be added by next January.

"We mainly export agricultural products to China, and imports machines, equipment and consumer goods. In the future, we will export minerals to China," he said. Because ACFTA covers not only trade, but also services and investment, Laos, like other members of the Association of Southeast Asian Nations (ASEAN) is striving to attract more foreign investment, especially from China, he said.

"We should have more promotion activities, like investment road-show in Chinese localities, especially those in the southern part. We're offering many tax and non-tax incentives so that foreign investors, including Chinese investors, will come to Laos to produce and export back to China."

"Now, we try to merge two main markets in Southeast Asia and Northeast Asia to link people and the market of 1.8 billion consumers. We've already implemented the ASEAN-China Agreement on Trade in Goods. We're now in the process of negotiations on trade in services, and then investment," the Lao official stated, adding "The Agreement on Trade in Services is expected to be signed at the 11th ASEAN Summit in Kuala Lumpur late this year."

New progress in realization of ACFTA will benefit all stakeholders, and make it an outstanding area in the world, not only in terms of trade liberalization, but also service and investment, he concluded.

During the ongoing 37th ASEAN economic meeting held in Lao capital Vientiane, the delegates are expected to explore ways of speeding up regional economic integration and cooperation, especially the realization of the ASEAN Economic Community by 2020 the ASEAN Free Trade Area by 2015, as well as negotiations with its partners for free trade areas, including ACFTA.

ASEAN became China's fourth biggest trading partner in the first half of this year with the two-way turnover reaching nearly 59.8 billion dollars, up 25 percent against the same period last year.

The China-ASEAN trade stood at 105.9 billion dollars in 2004, realizing the target of 100 billion dollars one year ahead the schedule.

The 10-member ASEAN has a population of about 500 million, a total area of 4.5 million square kilometers, a combined gross domestic product of 737 billion dollars, and a total trade of 720 billion dollars.

Source: Xinhua