Business

China Proposes Free Trade Areas

Briefing journalists ahead of President Xi Jinping's departure for the Asia-Pacific Economic Cooperation (APEC) summit in Peru, November 19-20, China's Vice Foreign Minister Li Baodong warned of the rise of protectionism and said the region needed a free trade agreement as soon as possible. "China believes we should set a new & very practical working plan, to positively respond to the expectations of industry, and sustain momentum and establish a free trade area in Asia-Pacific at an early date," Li said.

Two trade proposals

China has proposed the Free Trade Area of the Asia Pacific (FTAAP) and the Regional Comprehensive Economic Partnership (RCEP), which some observers see as competitors to the TPP. RCEP groups the 10 members of the Association of South East Asian Nations plus China, Japan, South Korea, India, Australia and New Zealand, but not the United States.

Beijing had feared the United States would use the TPP to either force it to open markets by signing up or else to isolate it from other regional economies.

China has nothing to lose

Some see the demise of the TPP as an opportunity emerging for Beijing from Trump's surprise victory, which also brings greater uncertainty for US-China relations & the regional balance of power. Ruan Zongze, a former Chinese diplomat now with the China Institute of International Studies, said the TPP would be the first casualty of Trump's election. "Since China isn't in that bloc, we don't have anything to lose," Ruan said.