Chinese President Xi Jinping called for free and fair trade, urging Asian countries to join China’s Free Trade Area of the Asia-Pacific (FTAAP) and warning that rival groups may cause “fragmentation” in the region, obviously referring to the US-backed Trans-Pacific Partnership (TPP) trade deal.
In his speech at the Asia Pacific Economic Cooperation (APEC) CEO Summit on Wednesday, Xi drew a blueprint for an Asia with more economic vitality and freedom of investment.
He said China wants to put APEC back on track of leading the regional economy.
“We must build an open economy,” Xi stressed. “We need to free trade arrangements open and inclusive to the extent possible to enhance economic openness in our region.”
“We must implement the sustainable development agenda. The ultimate aim is to serve the people,” he added.
“With various new regional free trade arrangements cropping up there have been worries about the potential of fragmentation. We therefore need to accelerate the realization of FTAAP and take regional economic integration forward,” Xi said.
The Chinese leader said regional trade agreements “should be inclusive as much as they can be,” stressing that Asia-Pacific economies need to work together to strengthen the region’s growth.
“We must adhere to the concept of win-win cooperation, oppose protectionism, and work for fair trade,” he added.
As Xi spoke, leaders from the 12 TPP nations met and extolled the pact’s economic benefits, in an effort to smooth domestic hurdles to ratification.
In a joint statement released after their meeting in Manila, the leaders heralded the “high-standard” pact as offering a “new and compelling model for trade in one of the world’s fastest growing and most dynamic regions.”
The TPP will be the world’s largest, grouping 800 million people in countries as diverse as the United States, Japan and Brunei Darussalam.
South Korea and Indonesia have also signaled interest in joining.
APEC, which accounts for 60 percent of global output and nearly half of world trade, is aiming for a larger free trade area for its 21 economies by 2025.
In terms of its own growth, the president promised to deepen reforms and more opening, and to expand China’s contribution to the world economy.
China has many initiatives, like APEC-FTA and connectivity through infrastructure.
“China’s policy on welcoming foreign investment will not change…China’s door to outside world will always remain open,” Xi said.
“I’m confident that the vast Pacific Ocean will become a bridge of cooperation, a bond of friendship, and a place we call our common home,” he added.
Xi said the FTAAP, Asian Infrastructure Investment Bank (AIIB) and the 21st Maritime Silk Road —all China-led initiatives—will be the drivers of the Asia Pacific region’s goal of inclusive and sustainable growth.
He said the acceleration of “the realization of FTAAP [will]take regional integration forward, encourage equal footing participation, [and will provide]a free trade engagement [that is]open and inclusive.”
Professor Richard Heydarian of the De La Salle University described FTAAP as “a major trade agreement coveting most major economics in Asia Pacific and will be less stringent in its regulatory implications, but will heavily benefit Chinese exporters.”
Analysts believe China wants an FTAAP because this would ensure its trade dominance in the region instead of Washington’s Trans Pacific Partnership (TPP), and it would also facilitate easier trade policies for China instead of it abiding by certain disciplines to be negotiated under the TPP.
Aside from the FTAAP, Xi also mentioned the advantages of joining two other China-led initiatives—the Asian Infrastructure Investment Bank (AIIB) and the 21st Maritime Silk Road.
The AIIB, which will be launched later this year, is a “new style of investment and financing institution” aimed at bolstering infrastructure development in the Asia Pacific region.
It is seen by some as a rival to the World Bank and the International Monetary Fund (IMF).
On the other hand, the 21st Maritime Silk Road is a strategic initiative proposed by Beijing for easier facilitation of trade in the Southeast Asia.
This new Silk Road also aims to connect the historical land-based Silk Road that runs across China, India, Persia and Europe.