China steps up push for more free-trade pacts to counter US-led TPP
South China Morning Post | 18 December 2015
China steps up push for more free-trade pacts to counter US-led TPP
by Wendy Wu
China has laid out a road map in its quest for free-trade agreements, pledging to reach deals with most of its neighbours and to further open up its own markets.
Its guideline, released on Thursday, aimed to create broader FTA markets and achieve closer integration with its “One Belt, One Road” strategy.
China aims to grow its trade with FTA partners so that in the near term it at least equals that between China and most developed countries and emerging markets. But it did not give a time frame.
China has stepped up its FTA talks to counter the US-led Trans-Pacific Partnership, which challenges its trade and investment in the region. The US has also embarked on discussions with the European Union on another pact, the Transatlantic Trade and Investment Partnership.
“Countries will be willing to join as long as they can benefit from lower tariffs and costs under the FTAs. They are not a political alliance, nor do they exclude members from entry into other trade treaties,” Renmin University professor Zhao Xijun said.
The guideline said Beijing would continue its trial to liberalise its capital account in the four free-trade zones – Shanghai, Tianjin, Fujian and Guangdong – and conduct stress tests for difficult undertakings in the FTA talks to “accumulate experience to prevent and address risks [and] explore the optimal opening model”.
It repeated China’s pledge to improve its foreign investment environment, which has been criticised for its opaque approval process and tight restrictions to ensure national security.
A free-trade pact between China and South Korea will take effect on Sunday, with South Korea doing away with tariffs on 52 per cent of its Chinese imports and China removing taxes on 44 per cent of South Korea’s exports. A China-Australia free-trade pact will kick in on the same day.
Beijing is holding its ninth FTA negotiations with South Korea and Japan, according to the commerce ministry. At the same time, it is trying to speed up investment treaty talks with the EU, hoping to cement a deal next year.
But Beijing is also under US pressure to shorten its negative list of market access and industry protection in its bilateral investment treaty negotiations, Western observers say.
China’s central bank vice-governor Yi Gang had earlier said a high-quality free-trade network was vital for success in China’s “One Belt, One Road” initiative, which seeks to improve cooperation among countries along the ancient Silk Road trade route.
“We should strive to set up a big market with BRICS countries, one with emerging economies and one with developing countries,” the guideline read.
It also said Beijing would further open up its services sector to encourage the creation of jobs.
