Southeast Asian nations are looking to China to reduce their trade dependency on Western markets, Philippines President Gloria Arroyo said today at a gathering of regional leaders.

Malaysian Prime Minister Abdullah Ahmad Badawi also urged Malaysian entrepeneurs not to view China as a threat as he oversaw the signing of a natural gas supply between the two nations worth a reported US$25 billion.

"Malaysia-China cooperation in energy resources, automotive and other industries is growing to the benefit of both countries," he told Malaysian press in Nanning, China.

A day after China and the Association of Southeast Asian Nations reaffirmed at a summit their goal to create a free-trade zone by 2010, Arroyo emphasised the benefits for Southeast Asia of their fast-expanding relationship.

"The Asean region represents a market of over half a billion people for Chinese exports. It is a supplier of much-needed resources," said Arroyo, who is this year's chair of the 10-nation Southeast Asian grouping.

"In turn we - the Asean countries - can reduce our dependence for our exports on Western markets, such as the US and Europe."

Arroyo was speaking at the launch of a large trade exhibition to promote economic links between China and Southeast Asia, with the other Asean leaders and Chinese Premier Wen Jiabao in attendance.

Arroyo's comments are timely for China as it seeks to ease concerns, particularly in the West, that its fast-growing economic might is a threat to other countries' interests.

China-Asean FTA

Protectionist voices have grown louder in the United States and Europe in recent years as China's trade surplus has grown and Beijing has taken only minimal measures to adjust its currency, which critics say is undervalued.

Wen on Tuesday highlighted the benefits of China's growing economic strength for Southeast Asia as he reaffirmed his nation's goal of increasing trade with the region by more than 50 percent over the next four years.

"I see a big potential and growth prospect in further developing the economic cooperation and trade between China and Asean countries," Wen said.

"We should firmly grasp the opportunity and work together to realise the objective of raising China-Asean trade to more than 200 billion dollars by 2010."

The target, floated previously at regional gatherings, compares with trade of 130.37 billion dollars last year and 39.5 billion dollars in 2000.

The business expo came a day after the China-Asean summit affirmed plans to deepen ties in economic, political, security and socio-cultural spheres.

Underpinning the relationship is a plan to create a China-Asean Free Trade Area by 2010, a giant trading zone incorporating a third of the world's population.

The two sides reaffirmed in a joint statement after the summit that they were committed to meeting the 2010 deadline, while Wen called for negotiations on the deal to be speeded up to ensure it was implemented on time.

Loans made available

Asean is currently running a trade surplus with China and Southeast Asian leaders and officials say the region is now focused on seeking more investment from the economic giant.

Wen, speaking later Tuesday at another business event, reassured Asean that China was committed to opening up its market further to Southeast Asia and re-pledged preferential loans to Chinese businesses investing in the region.

"The Chinese government will honour its (promises) made last year of providing five billion dollars of preferential loans to support Chinese companies in investing and setting up business ventures in Asean countries," he said.