China first proposed the idea of a free trade area in November 2000. The Heads of State and Government of ASEAN and China therefore decided to examine economic integration measures in the region The following year, they advocated in Brunei the creation of an ASEAN-China Free Trade Area.  Singapore, with its financial wealth and other services, has also concluded a free trade agreement with China. This agreement, signed in 2009, focuses on the service sector, in addition to the individual benefits of income tax. Singapore intends to increase its population by an additional 2 million people and many of them are expected to be affluent Chinese nationals from the mainland. Among the benefits of companies is the reduction of withholding taxes for a large number of services, including eligible fees. This is one of the reasons why Singapore is becoming a regional investment hub in China and Asia and is receiving more and more Chinese foreign investment that is going in the opposite direction – to Singapore and for reinvestments throughout Asia. As foreign investors automatically qualify as Singaporean companies when setting up a subsidiary, they can also access Singapore`s impressive international tax treaty, including many other free trade agreements and more than 80 bilateral double taxation treaties. China has developed a strategic position in concluding free trade agreements – the policy of allowing tariff and tax reductions for certain products and services is one of the most important cornerstones that have made this country the center of global production in recent years. There is no doubt that the signing of the China-ASEAN Free Trade Agreement will have a great influence on the development of China and Asia in global supply and related foreign investment. The Framework Agreement was signed by eleven Heads of Government on 4 November 2002 in Phnom Penh, Cambodia. : Hassanal Bolkiah (Sultan of Brunei Darussalam), Hun Sen (Prime Minister of Cambodia), Megawati Soekarnoputri (President of Indonesia), Bounnhang Vorachith (Prime Minister of Laos), Mahathir ben Mohamad (Prime Minister of Malaysia), Than Shwe (Prime Minister of Burma), Gloria Macapagal-Arroyo (President of the Philippines), Goh Chok Tong (Prime Minister of Singapore), Thaksin Shinawatra (Prime Minister of Thailand), Phan Văn Khải (Prime Minister of Vietnam), Zhu Rongji (P) Minister of Foreign Affairs of the State Council of the People`s Republic of China).
  Many of these free trade agreements, once concluded, will be progressively admitted, meaning that consultants who invest heavily in China in either of these countries or regions must be informed of the latest developments, so that their clients can take full advantage of the benefits they can offer and will offer in the future. The free trade agreement reduced tariffs on 7,881 product categories, or 90% of imported goods to zero.  This reduction entered into force in China and the six original ASEAN members, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The other four countries are expected to follow in 2015.  China`s free trade agreement includes Hong Kong and Macau, with Hong Kong`s version known as the Closer Economic Partnership Agreement (CEPA) and which we have long reported on regular updates regarding its benefits here on the China Briefing. The CEPA agreement between China and Hong Kong offers many advantages to foreign investors who set up local businesses in Hong Kong, who reduce (after a waiting period) taxes on sources and dividends to funds that are returned from the mainland to the region. . . .