Such trade deals can have disruptive effect on non-signatories, official says
China will conduct comprehensive and systematic assessments of the fallout from the Trans-Pacific Partnership, a broad agreement between 12 Pacific Rim countries, including Japan and the United States, since it believes that such deals have disruptive effects on non-signatory nations, a top government official said.
Commerce Minister Gao Hucheng said China is of the view that changes in the global trade pattern should be decided by adjustments in the industrial structure and through product competitiveness in global markets.
China hopes that the TPP and other free trade arrangements in the region will boost each other and contribute to trade, investment and economic growth in the Asia-Pacific region, the minister said in a statement posted on the ministry's website on Thursday.
We will go ahead with our reform and opening-up policy. At the same time, we will also support global economic integration and the creation of a multilateral trading system, Gao said.
The minister's comments come against the backdrop of claims that the United States and other TPP members are using the TPP to target China, despite statements to the contrary. In addition, the remarks also clear the air on whether the TPP would affect China's foreign trade and two-way investment and if it would be used to contain China's economic influence in the Asia-Pacific region.
Fan Jishe, a researcher at the Chinese Academy of Social Sciences who specializes in US affairs, said it is highly unlikely that the TPP would lead to the creation of a trade bloc that excludes China.
The economic development mode in China has already changed from low-end product trade to 'going global' strategies like setting up or moving manufacturing facilities and to more direct investment in overseas markets, said Fan.
Besides the US, other signatories to the TPP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
China has to date signed bilateral and multilateral free trade agreements with seven TPP members.
China hopes to complete negotiations on the Regional Comprehensive Economic Partnership by the end of this year, which would link the Association of Southeast Asian Nations with China, Australia, India, Japan, New Zealand and South Korea, accounting for one-third of the global gross domestic product.
According to Gao, China believes that the World Trade Organization members will not abandon the existing multilateral trading system, since it brings benefits to the global economy. The minister said it was imperative to have an early conclusion for the Doha round of WTO negotiations.
Ma Jun, chief economist with People's Bank of China, and Xiao Mingzhi, an economist based in Shanghai, said in a report published on Friday that China would lose 2.2 percent of its GDP if all other 15 potential members joined the Trans-Pacific Partnership but China did not.