Phnom Penh, 4 November 2002

Your Excellency Prime Minister Hun Sen,

Dear colleagues,

It gives me a great pleasure to gather with my old friends again in Phnom Penhfor a discussion of the important issues of peace, cooperation and development between Chinaand ASEAN countries.

Under the guidance of the Joint Statement issued by President Jiang Zemin and ASEAN leaders in 1997, the two sides have constantly built up their political trust, expanded their cooperation into wider areas and gradually put in place and substantiated the mechanisms of cooperation, ushering in a new situation of parallel and mutually reinforcing development of cooperation projects at various levels and in different fields. Trade between the two sides totalled USD 41.6 billion last year, making Chinathe sixth and ASEAN the fifth biggest trading partner to each other. Now, all ten ASEAN countries have become official tourist destinations for Chinese citizens. The China-ASEAN relationship has reached unprecedented heights in history.

Since the beginning of this year, Chinaand ASEAN, in face of the profound changes in the regional and international situation, have both realized the necessity of intensified cooperation. We should consolidate our achievements, deepen our cooperation and push forward our relations into a new stage of all-round development. To this end, I would like to put forward the following suggestions:

First, launching the process of establishing the China-ASEAN Free Trade Area to boost the comprehensive economic cooperation between our two sides. The initiative for a China-ASEAN Free Trade Area put forward at the Fifth China-ASEAN Summit last year has given a forceful impetus to China-ASEAN relations and exerted a positive impact in the region and the world. The joint efforts of the two sides have resulted in a consensus on the Framework Agreement on China-ASEAN Comprehensive Economic Cooperation.Accelerated efforts towards the Free Trade Area serve our common interests, for the earlier the Free Trade Area is in place, the sooner the two sides can benefit from it. This will also contribute to faster progress of East Asiacooperation as a whole. Therefore, the Chinese side is supportive targeting 2010 as the year for the completion of the Free Trade Area. The Framework Agreement has given full consideration to the interests of new ASEAN members. It allows five more years for the new members to join the FTA. The Chinese side has also decided to accord the Most-Favored-Nation status to the three non-WTO members, namely, Viet Nam, Laosand Cambodia. Chinawill faithfully deliver its commitments and implement the "early harvest" and other arrangements on schedule. We stand ready to make joint efforts with all ASEAN countries to move forward our all-round economic cooperation through the establishment of the Free Trade Area.

The Chinese side will also adopt active measures to promote its mutually beneficial cooperation with ASEAN in priority areas. I am pleased to know that the Ministry of Agriculture of China and the ASEAN Secretariat have signed theMemorandum of Understanding on Agricultural Cooperation,which was approved at the China-ASEAN Agricultural Ministers' Meeting, marking the first giant step of our cooperation in priority areas. Here, I would like to further suggest that for the sake of our cooperation in the IT field, the IT Ministers' Meeting be established and a memorandum on the mid- and long-term IT cooperation be reached at an early date. I would also like to announce here that the Chinese side will provide training for 500 IT professionals of ASEAN in the next five years. The First China-ASEAN Media Cooperation Seminar was held in Beijingthis year. We hope to see such exchanges and cooperation continue between Chinaand ASEAN in media, tourism, culture and other fields.

Secondly, launching the cooperation in the comprehensive development of the MekongRiver basinto push forward the process of ASEAN integration. The development of the Mekong Subregion is not only a key cooperation area between Chinaand ASEAN, but also an important element in the ASEAN integration process. The just-concluded First GMS Summit adopted theJoint GMS Summit Declarationand theDevelopment Matrix. The Chinese side will do as much as it can to increase input in the development of the MekongRiver basinand support the implementation of the Declaration and relevant development programs. We have published theCountry Report on China's Participation in GMS Cooperation, which defines China's plans and key projects for participation in the GMS program. Chinahas also signed a framework agreement with Laoson providing USD 30 million in interest-free loan and grant to improve the road in Laosas part of the Kunming-Bangkok Road. We will also make funds available for the comprehensive renovation and construction of the Kunming-Hekou Railway in support of an early connection of the Pan-Asian Railway.

The Chinese side has also taken note that ASEAN has made infrastructure, human resources development, information and communication technologies and regional economic integration as the four priorities of the "Initiative of ASEAN Integration".The Chinese side will render its support for the ASEAN integration process centring on these fields. Chinahas exchanged letters with Cambodia, Laosand Myanmarto provide Zero Tariff Treatment for the majority of their exports to Chinafrom 1 January 2004. Chinais willing to positively consider sponsoring the Inland Waterway Improvement Project in CLMV countries and other projects with funds from the China-ASEAN Cooperation Fund.

Thirdly, launching comprehensive cooperation between Chinaand ASEAN in non-traditional security areas to promote regional peace and security. Terrorism and other non-traditional security issues have become increasingly salient.The series of recent incidents in Indonesiaand the Philippineshave demonstrated the need for countries in the region to further intensify their cooperation and jointly deal with growing non-traditional security threats.Chinaand ASEAN are having good cooperation in combating drugs and other fields.To promote our comprehensive cooperation in non-traditional security areas, this meeting will issue the Joint Declaration of China and ASEAN on Cooperation in the Field of Non-traditional Security Issues.I hope that competent agencies of the two sides will gradually draw up and implement relevant cooperation programs in the spirit of the Joint Declaration and on the basis of existing mechanisms.

Dear Colleagues,

Enhancing mutual political trust will provide an important basis and guarantee for the comprehensive development of China-ASEAN relations.The two sides have concluded consultations and will sign the Declaration on the Conduct of Parties in the South China Seaafter this summit. This important advancement of China-ASEAN relations marks a higher level of political trust between the two sides and will contribute to regional peace and stability.The Chinese side appreciates and supports the purposes and principles of theTreaty of Amity and Cooperationin Southeast Asiathat ASEAN has followed for long and remains positive on joining the TAC.We would like to make concerted efforts with all ASEAN countries to promote an early accession by all five Nuclear Weapon States to the protocol to the Treaty on Southeast Asia Nuclear Weapons Free Zone.

Nearly a year after China's entry into the WTO, facts have shown that economic growth in Chinahas not come about at the expense of the development of others. On the contrary, it has become an important pillar and stimulus to the East Asian economy as a whole.In the first three-quarters of this year, trade between Chinaand ASEAN reached USD 38.55 billion, up 27.1% over the same period last year.In breakdown, ASEAN's exports to Chinaincreased by 27% on average and nearly 50% for several countries. While providing a market for ASEAN exports, Chinahas also gradually increased its investment in ASEAN countries.I am sure that these investments will become a new and important factor for economic development in ASEAN countries.

Friends, this is an unusual year for both China and ASEAN. ASEAN has celebrated its 35thanniversary and the Communist Party of China will convene her 16thCongress in a few days. The Congress is of great significance to the all-round advancement of reform, opening-up and the modernization drive in China . China will, as always, pursue the independent foreign policy of peace.We treasure our good-neighbourly friendship and cooperation with ASEAN countries and appreciate consistent adherence by ASEAN countries to the One-China policy.We will continue to support ASEAN countries in safeguarding their national unity and social stability, including their efforts in striking hard at terrorism. China stands ready to strengthen its coordination with ASEAN in regional cooperation and supports ASEAN's continued leading role in East Asian cooperation.Let us join hands to usher in a better tomorrow for China-ASEAN relations.