A ceremony celebrating the establishment of the China-ASEAN Free Trade Area is held on January 7, 2010 in Nanning, capital of southwest China's Guangxi Zhuang Autonomous Region (CNSPHOTO)

The key for small- and medium-sized enterprises'(SMEs) success in coping with the China-ASEAN (Association of Southeast Asian Nations) Free Trade Area is to study and understand the rules and take advantage of them, a senior expert suggested.

Zhang Yunling, Director of the Institute of Asia-Pacific Studies under the Chinese Academy of Social Sciences, made the remarks in an exclusive interview with Beijing Review at the Forum on the China-ASEAN Free Trade Area (CAFTA) on January 7 in Nanning, capital of southwest China's Guangxi Zhuang Autonomous Region.

CAFTA, which started operation on January 1, 2010, covers a population of 1.9 billion and involves about $4.5 trillion in trade volume. It is the world's largest FTA for developing countries and the third largest FTA after the North American Free Trade Area and the European Union. The average tariff on goods from ASEAN countries to China has fallen from 9.8 percent to 0.1 percent.

Zhang said the establishment of the FTA promotes closer cooperation between China and ASEAN in a more comprehensive way, including trade, investment and services. However, a recent survey showed that the percentage of enterprises implementing CAFTA is relatively low due to their lack of understanding of FTA rules and details. Hence, the government should help them in this regard, Zhang said.

"Enterprises, small- and medium-sized enterprises (SMEs) in particular, should not see ASEAN as purely an export market. They should study local markets, set long-term goals and find their positions. Cooperation among enterprises will be more helpful than marketing alone," Zhang noted.

Zhang's view was echoed by Mirzan Mahathir, President of the Asian Strategy and Leadership Institute, Malaysia. Mahathir said that a lot of encouragement is required to get SMEs to "look beyond their national borders."

"It is important to assist SMEs through incentives, concessionary funding and opportunities to network with potential partners so that they can make the changes necessitated by implementation of CAFTA," Mahathir said.

With the theme of "Win-Win Results and Greater Success," the two-day event, proposed by Chinese Premier Wen Jiabao at the 12th China-ASEAN Summit in October 2009, aimed at celebrating the establishment of CAFTA, discussing and exploring closer cooperation in trade and investment, and creating more opportunities for regional economic cooperation.

Events held in conjunction with the forum included the launch of a China-ASEAN business portal website, the opening of the Qinzhou Free Trade Port Area and the Nanning Bonded Logistics Center in Guangxi, and a signing ceremony for 18 projects between China and ASEAN worth a total of $4.89 billion.

(Reporting from Nanning, Guangxi Zhuang Autonomous Region)