"The average tariff rate on products originating from Asean [countries] will be lowered to 6.6 per cent by 2007 and 2.4 per cent by 2009," Bo said. "By 2010, China will have removed tariffs on 93 per cent of the goods from the Asean countries."

The tariff reduction is part of the progress on the free-trade agreement between the two. So far, China has lowered its average tariff rate on Asean-made goods to 8.1 per cent from 9.9 per cent last year.

Bo said Asean countries would also cut tariffs on goods from China. For example, Thailand is scheduled to implement a zero tariff on more than 90 per cent of Chinese goods.

"Besides carrying out the agreement on cargo trade, China and Asean will prioritise negotiations on service trade and investment in the coming years," Bo said.

China's service trade with Asean countries concentrates mainly on tourism. As of March, China had attracted nearly US$40 billion (B1.5 trillion) of direct investment from Asean countries. And an increasing number of domestic enterprises now see Asean countries as an important investment destination.

According to the Ministry of Commerce, China's imports from Asean countries soared to $81.6 billion between last July and this June, up 20.4 per cent from a year ago, as a result of tariff reductions.

Meanwhile, China's exports to Asean countries topped $61.8 billion in this period, up 23.4 per cent year on year.

A free-trade pact on cargo was signed between China and the 10 Asean members last year. When it comes into effect, the deal is expected to create the world's biggest free-trade zone by 2010, covering nearly two billion people.

Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand and Vietnam.

China Daily

Asia News Network

BEIJING