China and members of the Association of Southeast Asian Nations have agreed to upgrade their free-trade agreement, and the deal will not be threatened by other emerging trading blocs in the region, Singapore's foreign minister told China Daily on Thursday.

K. Shanmugam, who is one of 10 ASEAN foreign ministers attending a special meeting in Beijing, said the new agreement was made to celebrate the 10th anniversary of the group's strategic partnership with China.

"Singapore strongly supports the enhancement of the FTA," Shanmugam said.

"In the absence of a general WTO deal, we need to create as many layers of free-trade arrangements as possible, which means more services and linkages for the people," he said.

China's trade volume with ASEAN reached $400 billion last year, with China being its largest trading partner and ASEAN being China's third-largest. The two sides aim to expand their trade volume to $500 billion by 2015.

Shanmugam said both sides are eager to upgrade the relationship due to the benefits it will bring both sides.

"Today, roughly 60 percent of the goods that are exported from this region, ultimately in manufacturing, find their way to three economically more advanced regions - the United States, Europe and Japan. Only 22 percent stays in the China-ASEAN region," Shanmugam said

"As we prosper, as we increase our trading relationship and our connectivity, this percentage can go up much higher," he said.

In another bid to further boost bilateral ties, Singaporean Prime Minister Lee Hsien Loong is on a seven-day visit to China. He had separate talks with President Xi Jinping and Premier Li Keqiang on Monday, and visited the Xinjiang Uygur autonomous region.

Confronted by the challenges of economic restructuring, Shanmugam said both China and Singapore should put in place new policies that adapt to the changes in population and the external environment.

"It would be useful for the two economies to work together on inclusive development, on how to manage financial and economic transformations," he added.

While many ASEAN states have suffered from unsatisfactory economic performances in the first half of this year, Singapore has shown good momentum for recovery, with projected GDP growth of 2.8 percent for 2013.

Southeast Asia will be on track to revive market confidence with closer cooperation with China, he said.

"China has put forward a number of initiatives, for example, in infrastructure, which can promote economic growth. Also, China's consumption has made it an end destination of many ASEAN products," he said.

Disputes regarding the South China Sea have been in the spotlight recently between China and some nations in the region.

Shanmugam said there is a consensus that related countries try to resolve claims in ways that are conducive to peace and harmony.

"This region has prospered and progressed, because there has been peace, which is essential to China's and ASEAN's development," he said.

"I think the atmosphere today is generally harmonious and constructive."

puzhendong@chinadaily.com.cn

(China Daily USA 08/30/2013 page6)