Apec leaders agreed on Tuesday to pursue the trade liberalisation pact that China has proposed. Photo: EPA
Hu Shuli
Hu Shuli

China must continue to open up to realise its Apec ambitions

Hu Shuli says liberalisation has to go hand in hand with reforms, if Beijing is to succeed in its push for an all-encompassing free trade pact

Thirteen years after China first hosted the Asia-Pacific Economic Cooperation forum, the region's leaders were again gathered in the country. From the painstaking measures adopted to ensure security and reduce pollution, among others, it was clear the Chinese government was determined to make a success of the meetings. After all, this was a chance for the new Chinese leadership to burnish the country's status today as a "responsible major power".

The Asia-Pacific region has undergone sweeping political and economic changes since the 2001 summit was held in Shanghai. China is now the world's second-largest economy, while America is in the midst of its strategic rebalancing towards Asia.

There was no lack of contesting views on the issues involved, as we saw in the run-up to the summit, reflecting the changing global order in which competition and cooperation are both part of the game. China must not shun this game.

This year, the forum adopted the theme of "Shaping the Future through Asia-Pacific Partnership". It spelled out three priorities, including one to advance economic integration.

Now in its 25th year, Apec is arguably the region's most comprehensive, representative and influential cooperation platform. But it also faces some major challenges.

Although the region as a whole is economically vibrant, many of its individual economies are in the throes of structural reforms, or are trying to transform its economic model. Worse, many don't agree on the ways to promote integration. With no consensus, progress has been slow.


Such disagreement was on display over the Free Trade Area of the Asia-Pacific, a new regional pact proposed by Beijing. Before the meetings, the Chinese government had hoped to draw up a road map for its launch. But over the week, it became clear that the Americans, who were working to conclude their own Trans-Pacific Partnership, were lukewarm to the idea.

Despite the hiccups, the leaders agreed to pursue the trade liberalisation pact at the close of the summit on Tuesday, with US President Barack Obama giving his backing.

However, even if the goal of such a pact was broadly supported, it is clear that critical differences remain on the details of who should lead, how the pact should work, and how fast it should progress.

It is these details that will make or break an agreement, as international negotiations for previous trade pacts demonstrate.


The idea for a regional trade pact originated in the 2006 meetings in Hanoi, but it languished in the intervening years amid other priorities. China resuscitated the initiative at the Apec ministerial meeting in May this year, held in Qingdao .

China's goal for doing so is laudable. An overarching free trade pact for the entire Asia-Pacific region will provide a framework for the various bilateral and multilateral trade agreements now in existence or in the midst of being set up. This will reduce duplication and contradictions between the various trade regimes.


The pact isn't meant to rival the Trans-Pacific Partnership, but in fact encompasses it. China must be more flexible in promoting this pact, and communicate its intentions better to allay suspicions.

Competition on this regional stage extends further still. Last month, China and 21 other Asian countries - including India and Singapore - agreed to launch the Asian Infrastructure Investment Bank. Japan, South Korea and Australia were notable by their absence.

The US, for one, was vocal in its objections, raising worries that the new bank could lower international lending standards by demanding less strict environmental, labour and other safeguards for loans. It also voiced concerns about the transparency of the bank's operations.


The unspoken reason for its objections was that Washington regards the Chinese move as a challenge to the international financial order, and an attempt to subvert the influence of the Japanese-led Asian Development Bank.

China has long been frustrated that its growing economic and political heft has not won it a bigger voice in international organisations. Its leaders' move now to expand the country's influence on the international stage, as befits a responsible and confident major power, is understandable and to be expected.

The various multilateral groupings and trade agreements, including the China-driven Regional Comprehensive Economic Partnership, complement and compete with one another.


If China is indeed determined to remake itself through fundamental reforms into a country based on the rule of law, it must continue to open itself to the outside world. In this context, the Apec meetings provided an opportune time for China to ask itself, "What kind of China does Asia-Pacific need, and what kind of Asia-Pacific does China need?"

This article appeared in the South China Morning Post print edition as: China must continue to open up to the world to realise its Apec ambitions