Trans-Pacific Partnership: China cautiously welcomes deal, hopes it will promote free trade
By China correspondent Bill Birtles
Posted 6 Oct 2015, 1:11pm
The Chinese government has reacted cautiously to the agreement reached by the 12 nations negotiating the Trans-Pacific Partnership (TPP), saying it hopes the deal will make a contribution to the development of trade and investment in the Asia-Pacific region.
Despite being the world's second-largest economy and the biggest trading partner for seven of the 12 countries in the pact, China is excluded from the agreement, which has been seen by some observers in Beijing as a US-led effort to economically contain China.
A spokesperson for the Ministry of Commerce said: "China hopes the TPP will mutually promote other regional free trade arrangements and will make a contribution to the development of trade and investment in the Asia Pacific."
In a sign that Beijing is keeping the door open to one day joining the pact, the Commerce Ministry also said China had "an open, constructive stance towards building trade integration in the Asia-Pacific".
The deal is the cornerstone of the US government's "pivot to Asia" and US president Barack Obama has said it will ensure China does not "write the rules of the 21st century global economy".
"In the near future I don't think [the TPP] will have a large impact on China's competitive advantage," said Xiang Songzuo, chief economist of the Agricultural Bank of China, one of China's 'big four' banks.
"But in the long run, if the TPP can accept more members, particularly from European countries, then I think China's competitive advantage will be eroded further," he said.
Prime Minister
Malcolm Turnbull has hailed the hard-fought deal which covers 40 per cent of the global economy as a "gigantic foundation stone" for Australia.
China has not been part of the negotiations, but was previously invited to join the talks on condition that it meets higher standards on areas such as intellectual property protection and environmental regulations.
Another key requirement is that it makes moves towards liberalising its state-owned enterprises, which dominate sectors such as telecommunications and finance.
US must change their minds: Chinese economist
Mr Xiang said these conditions made it impossible for China to be included in the talks for the TPP.
"President Obama adopted the wrong approach in preventing China joining the TPP negotiations, and in the future US administrations and officials must change their minds," he said.
"I do think the Chinese authorities will keep an open mind for negotiation to join the TPP, and this will be good news for the world economy and world trade.
"If China is prevented from joining in future, I think it won't just be harmful for their economies but for the world economy in general."
The agreement of the trade pact still needs domestic approval from each of the 12 countries, but it comes at a time of growing competition in Asia for economic influence.
Last year China's government announced plans for the Asian Infrastructure Investment Bank (AIIB), a rival lender to the International Monetary Fund, World Bank and the Tokyo-dominated Asian Development Bank.
Australia, along with more than 50 other countries, has signed on to take part, despite the US and Japan opting not to, citing concerns about governance.
China's government has also previously proposed an Asia-Pacific Free Trade Area, as a more comprehensive and inclusive trade pact for the region that could serve as an alternative to the TPP.
