China's trade with the ASEAN, which reached record highs in 2006, is expected to grow at a slower rate this year.

Experts said 2007 will be another robust year, but growth will cool slightly.

Bilateral service sector trade between China and the bloc is meanwhile expected to begin an upward trend, with a series of agreements likely to be signed on Sunday.

"The China-ASEAN trade volume will keep growing this year, but a little slower than in 2006, perhaps at around 20 percent," predicted Lu Jianren, a senior researcher with the Chinese Academy of Social Sciences.

Since China and the ASEAN signed commodity trade agreements in November 2004, bilateral trade has grown rapidly, climbing to a peak rate of expansion in 2006.

According to statistics from the Ministry of Commerce, bilateral trade reached $129.91 billion during the first 10 months of 2006, a year-on-year increase of 23.1 percent and accounting for 9.1 percent of China's foreign trade.

"Despite negative factors such as bird flu, shaky energy security and political turmoil in some areas, bilateral trade growth will continue its momentum," said Lu.

It is said the China-ASEAN free trade area, when established in 2015, will be the third largest worldwide with an economy reaching $3 trillion.

Service sectors are expected to become a major driving force in it, said Lu.

Some experts have raised fears the free trade agreement will have a negative impact on local industries, as Southeast Asian nations such as Singapore, Malaysia and Thailand already have well developed service economies with powerful tourism, law, auditing and exhibitions sectors.

But Lu doesn't think so. "We have our own strengths, such as infrastructure," he said.
By September 2006, China and the ASEAN had signed construction contracts worth $4.08 billion, and Lu predicted the figure would have risen to $5.3 billion by the end of 2006.
Vietnam's entry into the World Trade Organization (WTO) is also a blessing for China.

Vietnam, China's major trade partner among the 10 ASEAN nations and a gateway to Southeast Asia, became the official 150th WTO member on Thursday.

"China's auto industry will be the biggest beneficiary, especially after the three-year transition period when local auto companies become able to invest in Vietnam as foreign-owned enterprises," said Lu.

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