China and Southeast Asian countries can use this year's APEC meeting to promote an upgrade of the China-ASEAN Free Trade Agreement, which would further strengthen connectivity and reduce costs, officials and a research report said.

The CAFTA can follow the example of the European Union to enhance trust, coordinate policymaking, and accelerate the free flow of personnel, goods, capital and information to become the engine for regional economic growth, according to a report issued in mid-February by the China Institute for Reform and Development, a Chinese think tank based in Haikou, Hainan province.

It may take three years to make a breakthrough, and around five years to form a new pattern of the 10+1 economic integration, as the current FTA has laid a good foundation for the upgrade, the report said.

"China should establish a mechanism on the national level to spearhead the upgrade and draft plans to discuss this with ASEAN countries during this year's APEC meeting in Beijing," it said.

The Chinese capital will host the APEC Economic Leaders' Meeting in November.

A senior Malaysian politician lauded the idea on Thursday at the APEC 2014 First Senior Officials' Meeting in Ningbo, Zhejiang province.

"Malaysia sees this as building blocks. You move from one stage to another," said N. Vasudevan, senior director for APEC with Malaysia's Ministry of International Trade and Industry.

"Regional economic integration is a rising trend on the agenda of this year's APEC. We are working toward the direction of trade facilitation with China, which is a very important member of APEC and trading partner in this region."

Vasudevan said that China, as host of this year's APEC meeting as well as being a developing economy, can voice concerns and safeguard interests for other developing countries in the Asia-Pacific.

"The ultimate aim of APEC is to achieve regional economic cooperation. Malaysia would like APEC to advance the Agreement of Trade Facilitation, a component of the World Trade Organization Bali Package," he said.

Vasudevan was also satisfied with the current Sino-Malaysian economic cooperation within the ASEAN framework, calling it a model partnership.

China is now Malaysia's largest trading partner, and Malaysia is China's biggest trading partner among the 10 ASEAN countries. China-Malaysia trade reached $86 billion in the first 10 months of 2013, nearly a quarter of the total trade between China and ASEAN.

In October, during President Xi Jinping's visit to Malaysia, the two countries signed a five-year program for economic and trade cooperation to expand annual bilateral trade to $160 billion by 2017.

Convenient market access and a shared cultural heritage are the biggest advantages for Chinese enterprises to invest in Malaysia, said Bong Hon Liong, president of the Malaysia-China Chamber of Commerce.

"Almost one-third of the Malaysian population speaks Chinese and celebrates Chinese traditions. Moreover, the development condition of the country is easy for small and medium-sized enterprises in China to adapt to," Bong said.

The organization, established in 1990 by Bong and other Malaysians, aims to strengthen ties between government agencies and business groups of the two countries.

"Malaysia and other ASEAN states, deeply affected by global recession, now pay close attention to China's development," Bong said. "Through communication, we improved understanding and injected a new impetus into our business community about cooperation with China."

The two countries celebrate their 40th anniversary of formal ties this year. The two countries have successively launched sister industrial parks in Qinzhou, the Guangxi Zhuang autonomous region; and Kuantan, a Malaysian coastal city on the South China Sea.

puzhendong@chinadaily.com.cn

The APEC Senior Officials' Meeting begins in Ningbo on Thursday, and will conclude on Friday. Gao Erqiang / China Daily

(China Daily 02/28/2014 page10)