| Abstract: | The central argument of this paper is that China's economic diplomacy not only improves its political relations with ASEAN countries but also promotes regional economic co-operation and integration. This paper is organised into two parts. The first part starts with a review of Chinese foreign policy changes in order to show how Beijing adjusted its foreign policy to pursue its economic and political interests. It also examines China's political and institutional efforts to forge the coming Free Trade Area (FTA) with ASEAN. The second part studies China–ASEAN trade relations from three aspects: the adjustment of Chinese industrial structure, foreign direct investment to both sides and the formation of a production network with China at the centre. While difficulties and problems are unavoidable in the construction of CAFTA, with China's active efforts and the enhanced co-operation between China and ASEAN, the building of CAFTA is moving towards fulfilment. |
