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China continues to promote construction of Asia-Pacific free trade area

Editor: Li Kun 丨CCTV.com

11-19-2015 15:43 BJT

By Zhong Feiteng, associate professor, National Institute of International Strategy, Chinese Academy of Social Sciences

The world economy has "probably entered a long difficult period," President Xi Jinping said at the APEC Summit in Manila, Philippines. One piece of important evidence supporting Xi's view is that the growth rate of world trade now lags behind the growth of the world gross domestic product. It's a new phenomenon for international society after the 2008 financial crisis.

 

President Xi called for speeding up construction of the Free Trade Area of the Asia-Pacific (FTAAP) and moving toward an open, inclusive, balanced, win-win regional cooperation architecture. In fact, the FTAAP has already become the consensus of APEC member countries at the 2014 APEC Summit in Beijing. As the most important economic trade forum in this region, APEC could play a great role in promoting the FTAAP.

However, the US is reluctant to accept China's long term vision of the regional economic structure and does not allow China to set up a center for regional economic integration in the Western Pacific. The Philippines formed an alliance with the US, and has a serious conflict with China in the South China Sea. For the government of the Philippines, it seems better to side with the US. The US also uses APEC to promote the Trans-Pacific Partnership (TPP).

The US believes China's economic and military development challenges them, and promotes a "rebalancing" strategy to deal with regional order transition. TPP is an important pillar of the rebalance and is also broadly considered a geopolitical bloc of confronting China. It concluded the negotiations six weeks ago. Now the TPP has entered into a ratification process with the signed parties. It is still too early to gauge the success of the TPP. However, the challenge of the TPP to Asia-Pacific regional integration is great.

There is a chain reaction among Southeast Asian countries to the TPP and how to handle its domino effect. For example, it can be said that Malaysia’s participation depends on Singapore. Some industries in Malaysia have the same export destination and industrial level as Singapore's. If Malaysia does not join TPP, it will suffer stiff competition from Singapore. Indonesia said it is considering TPP because of Malaysia and Vietnam.

In a relatively long period, ASEAN is the kernel of region integration. To some extent, the negotiation of a Regional Comprehensive Economic Partnership (RECP) promoted by ASEAN is a reaction to the TPP. The RCEP is different from the TPP in terms of targets, liberalization scope and number of members. If the competition between RECP and TPP move in a negative direction, it will create problems for ASEAN and become a kind of destructive force. Yet some scholars say RCEP and TPP are two  platforms for developing a free trade area for the Asia-Pacific.

To avoid taking sides either on TPP or RCEP, we need a comprehensive regional integration program covering all countries. As President Xi emphasized, countries in this region should focus on development and respect each other’s chosen development path. In this spirit, the FTAAP would be a better way. A relatively loose liberalization process is good for developing countries, because economic sovereignty is still important for them.
 
China has already become the largest trading partner of the majority of countries in the Asia-Pacific region. China could do more for developing countries. The expansion of China’s domestic demand could supply more of a market to neighboring countries. China’s outward foreign direct investment is also a new force for promoting regional integration. Neighboring countries should abandon the old model of their economy development strategies and adapt to the new regional economic relationship.

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

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