BANDAR SERI BEGAWAN, Brunei - China's trade volume with the Association of Southeast Asian Nations (ASEAN) is likely to reach $400 billion this year, Premier Wen Jiabao said on Sunday.

Wen made the remarks during a speech at Universiti Brunei Darussalam upon his arrival in Brunei for an official visit, the first by a Chinese premier since the two nations established diplomatic ties two decades ago.

"The biggest breakthrough we made in those years (in economic cooperation with ASEAN nations) was the establishment of the free trade area," he said. Brunei is a member of the 10-nation regional bloc.

"That has led to the rapid development of trade between China and ASEAN, which is likely to reach $400 billion this year. That means the trade volume between China and ASEAN will surpass that between China and Japan."

According to official figures, trade between China and ASEAN reached $295.9 billion in the first 10 months of this year. China has become ASEAN's top trading partner, while ASEAN replaces Japan as China's third-largest trading partner.

Still, there is huge potential for Beijing to beef up its economic ties with ASEAN as deals with China only account for 11 percent of its overall trade, Wen added.

The premier also raised specified proposals to deepen economic ties with Brunei, including cooperation in offshore oil and gas exploration, as well as upstream and downstream energy cooperation.

Brunei is the third-largest oil exporter in Southeast Asia and the fourth-largest natural gas exporter in the world.

The Foreign Ministry said earlier that energy deals will be signed during the visit, without giving details.

Wen arrived in Brunei on Sunday after he spent three busy days on the Indonesian resort island of Bali at the ASEAN and East Asia summits.

The premier told the audience at the university that he came to Brunei to celebrate the 20th anniversary of bilateral diplomatic ties.

Ties between the two nations have grown in a stable way mainly because the two countries "respect and treat each other with equality".

Located on the northern coast of the island of Borneo in Southeast Asia, Brunei has an area of 5,765 sq km and a population of 406,000.

Sultan Hassanal Bolkiah hosted a welcome dinner for Wen on Sunday evening. The two leaders will have an official meeting on Monday before Wen returns to Beijing.

Though it has a dispute with China over a small area of the South China Sea, Brunei has maintained a low-profile stance on the issue and stressed it should be settled through mutual consultation.

Lu Jianren, an expert on Asia-Pacific studies at the Chinese Academy of Social Sciences, said joint exploration of oil and gas with Brunei is both "a win-win choice and a peaceful way to solve the territorial issue".

He added that through closer trade and economic ties with Brunei, one of the initiators of the Trans-Pacific Partnership, China could show its sincerity and openness toward regional economic integration.

Zheng Yangpeng in Beijing contributed to this story.

China Daily