Beijing undecided on pacific trade pact

PUBLISHED : Friday, 25 November, 2011, 12:00am
UPDATED : Friday, 25 November, 2011, 12:00am


Chinese think tank researchers are split in their views on the Trans-Pacific Partnership (TPP) trade initiative proposed by US President Barack Obama at the Apec summit in Hawaii this month.

The latest advice, given by Zhang Yunling, a senior member of the Chinese Academy of Social Sciences and a former director of its Japan and Asia-Pacific studies institutes, is that 'sooner or later, China will have to join the TPP'.

The key issue, he said, is not how long it will take China to negotiate its way into the proposed Asia-Pacific free trade agreement, because it may take time for China to meet standards on government procurement, state-run enterprises and labour rights.

Instead, 'as the second-largest economy in the world, China's absence would inevitably compromise the significance of any international trade pact'.

The mainstream opinion from Chinese researchers, Zhang told a policy briefing session sponsored by the China Centre for International Economic Exchanges (CCIEE) in Beijing on Tuesday, is that the country will become a TPP member at some point - 'if things stay on their present course'.

Liu Youfa , vice-president of the China Institute of International Studies, a foreign ministry-affiliated think tank, said that as long as the TPP practised transparency and inclusiveness and did not discriminate against China or any other country, China could join it at any time.

He said the Asia-Pacific region was a much more diverse region than Europe and that for any Asia-Pacific multilateral mechanism to work, it had to be more tolerant of differences between countries.

Liu said China had never expressed opposition to America's 'return to Asia' when it began winding down wars in Iraq and Afghanistan. Nor would the US see China as an enemy when it came to building any useful Asia-Pacific economic arrangement.

China sees the US role in Asia as a balancing factor that can contribute to the stability of regional relations 'in a number of ways', he said, except in areas such as China's nearby waters and the Korean Peninsula, where the US purpose was clearly to contain China.

In the short-term, despite difficulties, the Obama administration would try to complete negotiations between the nine countries already involved in TPP talks: the United States, Australia, New Zealand, Singapore, Malaysia, Vietnam, Brunei, Chile and Peru.

China's participation would depend primarily on talks with the US and Japan, the two largest economies in the partnership, and it could take some time to find out whether there would be any pressure from the US Congress to block China's access.

At the Asia-Pacific Economic Co-operation forum summit in Honolulu, China did not express immediate interest in joining the talks, even though President Hu Jintao said that China remained committed to its long-term goal of an Asia-Pacific free-trade area including all 21 Apec members.

Professor Tang Yihong , from the Central University of Finance and Economics, said the US had recently shown 'an unexpected surge of interest' in Asia-Pacific.

It was a trend that China should watch closely, she said, although there was no denying that the US is part of the region. The change could, in part, have something to do with gloomy business prospects in Europe, which was unlikely to contribute much to job and export growth in the US for some considerable time.

The TPP would be welcome if it was arranged for mutual benefit and leaves no country singled out and subjected to unfair treatment, Tang said.

CCIEE researcher Wang Tianlong said China might benefit from free trade by expanding co-operation with the US under the partnership and should take steps in that direction.

Wang said China should start to upgrade its labour and environmental regulations and try to achieve more in terms of developing green manufacturing industries and modern services.

Many researchers said the best approach for Beijing to adopt was to wait and see, although a lot of antagonistic views were expressed by Chinese researchers right after the US proposed the TPP.

Mei Xinyu , research fellow with the Chinese Academy of International Trade and Economic Co-operation, a Ministry of Commerce think tank, said that if the TPP followed rules laid down by the US, they would include things that China saw as its own internal affairs, such as fighting corruption and monopolies, environmental regulations and product standards.

In the long run, Mei told, a government-run economic news website, the US may intend to reclaim leadership over the process of Asia-Pacific economic integration, thus rendering Apec useless.

It was also possible that the US could turn the TPP into a political weapon for containing China, he warned.


The number of consumers in countries interested in joining the TPP, making it potentially the world's largest free-trade zone