ASIA is likely to replace the European Union as the world's largest trading bloc in two or three years, and there is no better place than Shanghai to be in, former Secretary of the United States Department of Commerce Carlos Gutierrez said yesterday.

"Regionalization will be a trend in the short term in this very difficult and turbulent time," Gutierrez said at the annual meeting of the International Business Leaders' Advisory Council. "Asia is going to become the world's most important trading bloc in a few years' time, which presents Shanghai with an enormous opportunity."

Gutierrez said from a sheer commercial point of view, the greatest creation in the EU is its free trade of goods and services within the region, which has given the bloc a huge bargaining power and made it competitive.

Asia is now embarking on a similar road of regionalization, he said, noting that ASEAN plus three, or 10 member countries of the Association of Southeast Asian Nations as well as China, Japan and South Korea, is a bold vision.

"If ASEAN plus three can continue to enhance its cooperation and ultimately construct an East Asia Free Trade Area, then this bodes very well for the future prosperity and stability within the region," Gutierrez, now a vice chairman of Citigroup Inc, said.

"I believe that it will enable Shanghai to play a key role and to enhance its position as a key hub within this trading bloc," he said.

To realize this vision, Gutierrez suggested China accelerate the reform to make the yuan regionally convertible, at least.