China urged to pick up pace of negotiations for regional trade pacts

Zhang Jianping, director of |the International Economic Cooperation Institute of China’s National Development and Reform Commission, said that apart from upgrading its industrial structure and promoting the "Belt and Road Initiative", China had initiated and deepened negotiations on regional free trade to reduce possible effects on its exports.

These include the RCEP talks, the China-Asean FTA, the China-South Korea-Japan FTA and the Free Trade Area of the Asia-Pacific.

"Since all these ongoing talks don’t include the United States, it would be helpful to enhance China’s foreign trade and outbound direct investment activities amid the current global economic setting," Zhang said.

The comments were made after various foreign media claimed that the TPP could be a tough tool to exclude China’s economic presence in the Asia-Pacific region, after the United States and 11 Pacific Rim countries reached a basic agreement on the pact on October 5.

China hopes to complete negotiations on the RCEP by the end of this year, which would link the Asean member states with China, Australia, India, Japan, New Zealand and South Korea, accounting for one-third of global gross domestic product.

China has also established domestic free-trade zones in Shanghai and Tianjin, and in Guangdong and Fujian provinces. For these reasons, the Chinese government proposes adopting an open attitude and respecting the co-existence of the TPP, as well as other regional free-trade deals under World Trade Organisation rules.

Beijing has signed bilateral and multilateral FTAs with seven TPP members. China and Singapore are the biggest investors in each other’s markets. So there is no evidence that all TPP members wish to use this deal to affect China’s earning ability, Zhang said.

Based on the level of industrial development and its economic foundation, China is no longer a world factory relying on its advantages in low-cost labour and production materials. It is evolving into a massive market fuelled by domestic demand, particularly from its surging middle class.

Liu Chenyang, a researcher at the Apec Study Centre at Nankai University in Tianjin, said that as long as China could develop free-trade zones at home and free-trade areas abroad, implement its "Belt and Road" strategies, and constantly deepen its reform and opening-up, it would be able to transform its economy and respond well to challenges from home and abroad.

"However, the TPP, if it doesn’t violate WTO rules, will only slightly affect China’s lower-end manufacturing sectors, including those producing garments and other daily life materials, in the short term," Liu said.

The distinct influence of the TPP will reveal itself after |2017, he said, after all members jointly announce the details of the pact.