The prospects for regional economic integration between China and the five Central Asian countries

Abstract

AS THE PROCESS OF ECONOMIC GLOBALISATION CONTINUES, there is a trend towards regional economic integration. By eliminating the barriers to trade between the participant countries, regional economic integration encourages efficient allocation of production factors and a more effective division of labour, while also helping to boost the efficiency of the regional economy as a whole and enhancing social welfare. For countries seeking to enhance their international competitiveness, efforts to reduce the level of risk attached to trading and investment activity need to be combined with pro-active participation in regional economic collaboration (Hanson, 1998). In the case of China, with the ongoing opening of its markets and the rapid economic development the country has achieved in recent years, there has been significant progress in economic collaboration between China and other countries in the region. By participating actively in regional economic collaboration, China can strengthen both its economic links with other developing nations and its political ties with these countries (Wang, 2003). At the same time, collaborating with one another on the basis of mutual benefit and reciprocity helps to facilitate involvement in the process of globalisation; China's active participation in regional economic collaboration therefore has political, diplomatic and economic benefits. China's strategy for regional economic collaboration emphasises the leveraging of its geographical location, focusing on pro-active involvement in various forms of collaborative activity with neighbouring countries. The main emphasis in China's economic collaboration efforts is thus on the Asia Pacific region (Song & Chen, 2002). The main forms of collaboration adopted include participation in the Asia Pacific Economic Cooperation (APEC) framework for the liberalisation of trade and investment and for economic and technology co-operation, collaboration with the Association of Southeast Asian Nations (ASEAN) on the basis of the Framework Agreement on Comprehensive Economic Cooperation Between ASEAN and the People's Republic of China, and the development of a collaborative relationship with the five Central Asian countries: Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan.