Beijing: China will position itself as free trade’s new champion at an Asia-Pacific summit this weekend, with the Communist government seeking to project economic leadership as a US-led Pacific Rim trade pact languishes under President-elect Donald Trump.
Beijing aims to capitalise on the Trump-induced coma of the Trans-Pacific Partnership (TPP), with President Xi Jinping selling alternate visions for regional trade at the Asia-Pacific Economic Cooperation meeting this weekend in Peru.
“If the U.S. gives up its leadership here, of course China will take the role,” said Tu Xinquan, a trade expert at Beijing’s University of International Business and Economics, who has advised China’s government on trade issues.
On the campaign trail, Mr Trump labelled the TPP, championed by President Barack Obama, a “disaster”.
Mr Obama last week abandoned efforts to win congressional approval for the TPP before Trump takes office, saying its fate was up to the President-elect and Republican lawmakers.
The China-backed Regional Comprehensive Economic Partnership (RCEP), a rival pact that excludes the United States, has become the front-runner for new free trade deals in the region.
The RCEP and the TPP — which excludes China — were viewed as parallel, if competing pathways, to an eventual broader Asia-Pacific free trade zone. But when Beijing hosted the APEC meeting in 2014 and pushed the Free Trade Area of the Asia-Pacific (FTAAP) as a framework for liberalising Pacific Rim trade, the US saw it as a distraction from TPP.
Now, the RCEP is likely the main avenue to a future FTAAP, giving China, as the largest economy among the deal’s 16 countries, a driving role in the future of Asia-Pacific trade. Mr Obama had argued that the TPP would allow the US and not China to write the rules of trade for the region.
China’s efforts to push trade pacts coincide with other soft power initiatives aimed at cementing the country’s economic influence, such as Mr Xi’s global One Belt, One Road infrastructure plan and the Beijing-led Asian Infrastructure Investment Bank.
Claire Reade, senior counsel at US law firm Arnold & Porter and a former assistant United States trade representative for China affairs, said China would seek to contrast its commitment to the region with US inconstancy.
“The geopolitical realities and China’s economic diplomacy make it seem unlikely the smaller countries in the region would spurn China’s leadership,” she said. In a sign of frustration with the US among some TPP members, Peru’s president has said that Pacific-rim countries can forge a new trade deal to replace TPP that includes China and Russia but not the US.
This week, Peru’s trade minister said it was engaging China on ways to get involved with RCEP negotiations.
