BEIJING – Chinese trade with the Association of Southeast Asian Nations could expand by 54 percent to an estimated US$200 billion by 2010, Prime Minister Wen Jiabao of China said last Tuesday.

“There is still great potential and a broad range of areas for China and ASEAN countries to explore our cooperation,” Mr Wen said at a trade exhibition in the southern Chinese city of Nanning.

ASEAN, whose 10 members include resource-rich exporters like Brunei, Indonesia and Malaysia, wants to sell oil and gas to feed Chinese industries. China’s state-owned oil companies and manufacturers have been buying mines overseas for ores and oil to supply their refineries and meet rising demand for resources.

China agreed Monday to buy $25 billion of liquefied natural gas from Petroliam Nasional of Malaysia, assuring continuous supply to Shanghai for 25 years. The gas will be shipped to a $4.6 billion terminal in Shanghai built by China National Offshore Oil and Shenergy Group.

Chinese trade with ASEAN rose 23pc last year to $130 billion, Mr Wen said. ASEAN’s direct investments in China had risen to $40 billion by the end of last year, he said, without giving a comparable figure.

Mr Wen was speaking at an exhibition of ASEAN products in Nanning. The event, where as many as 30,000 exhibitors showcased their products, was held after the annual meeting of ASEAN leaders, the first time government heads from the association met in China.

ASEAN and China reiterated their plan to set up a free-trade area comprising an estimated 1.8 billion people and a gross domestic product of around $3 trillion by 2010. The combined population of ASEAN is 500 million.

The agreement would allow China to eliminate trade barriers with ASEAN nations for needed resources and also help reduce ASEAN’s dependence on exports to the United States and other nations in the Western Hemisphere, President Gloria Macapagal Arroyo of the Philippines said at the exhibition.

“China and ASEAN nations should further expand trading volume and provide more convenient channels,” Mr Wen said separately at the China-ASEAN annual trade and investment summit meeting, which started Tuesday.

“Apart from conventional trade, more higher-value-added exports such as electronic and machinery exports and high-tech exports should be promoted,” Mr Wen said, adding that China and ASEAN were each other’s fourth-largest trading partners.

ASEAN is currently running a trade surplus with China, but Southeast Asian leaders and officials said the region is seeking more investment from its neighbour.

While ASEAN invested $3.1 billion in China last year, China pumped only $158 million dollars into Southeast Asia, according to figures released at the China-ASEAN summit meeting.

“If you look at the growing volume of trade, it is skewed towards China, so we need to get more Chinese investment into ASEAN,” a senior Southeast Asian trade official said ahead of this week’s events. “With these investments, China can absorb some of the products made in ASEAN.”