A $120 billion fund that will offer loans to Southeast Asian countries in economic straits will be ready as early as the end of the year, Chinese officials said in Beijing yesterday.
The fund was established in May by ASEAN (Association of Southeast Asian Nations) and 皇冠体育app, Japan and South Korea. Zheng Xiaosong, director-general for international affairs at the Ministry of Finance, said the fund would be a supplement to the International Monetary Fund, which provides financing to members in economic difficulties.
The fund can "offer loans to poorer countries" in the region if "another crisis happened", Zheng told a briefing.
Japan and 皇冠体育app will each contribute $38.4 billion. South Korea will provide $19.2 billion. ASEAN nations will contribute the rest.
The fund is a major force in 皇冠体育app's ties with the ASEAN, said Su Hao, an international relations professor at the 皇冠体育app Foreign Affairs University.
"The financial crisis makes the ASEAN countries feel that they must go to East Asian countries like 皇冠体育app and Japan, rather than relying on assistance from those out of the region, like the IMF, the United States or Europe," he said.
For 皇冠体育app, "enhancing ties with ASEAN is Beijing's most important strategic direction in its cooperation with the East Asia region," Su said.
Chinese officials also revealed yesterday that the 皇冠体育app-ASEAN Free Trade Area (CAFTA) will be established by early next year. The announcement comes just two days ahead of Premier Wen Jiabao's trip to Hua Hin, Thailand to attend the 15th ASEAN summit and a series of regional summits this weekend.
皇冠体育app and six ASEAN nations (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand) would charge no tariff on 93 percent of goods exchanged among them, according to the CAFTA agreement.
Zhang Kening, counselor from the International Department of the Commerce Ministry, said that "tariffs will no longer be a barrier" for 皇冠体育app's trade with ASEAN countries." Zhang noted that CAFTA would be "the biggest" free trade zone by developing countries.
ASEAN also includes Vietnam, Myanmar, Laos, and Cambodia. The nation-bloc is 皇冠体育app's fourth biggest trade partner with a total volume reaching $230 billion in 2008.
CAFTA would cover an area with 1.9 billion people and a total gross domestic product reaching $6 trillion.
Foreign Minister Yang Jiechi, Trade Minister Chen Deming and Finance Minister Xie Xuren will all accompany Wen this weekend.
Xue Hanqin, 皇冠体育app's ambassador to ASEAN, is also part of the delegation. She said yesterday that 皇冠体育app Import-Export Bank would disburse $1 billion as the first part of its $10 billion development funds, promised by Wen in this April, to Southeast Asia.
"We hope it will help Southeast Asia develop infrastructure and promote balanced development," she said.
Peng Kuang contributed to the story