China can help push forward FTAAP

Carlos Alberto Aquino Rodriguez China Plus Published: 2017-11-12 19:59:01
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By Carlos Alberto Aquino Rodriguez

After the 2016 APEC Leaders' summit in Lima, Peru, the environment surrounding members' economies efforts to reach a free and open system of trade and investment changed with the election of a new administration in the USA. This country, that was the main one pushing for the TPP agreement, supposed one of the pillars of the future FTAAP, decided to withdraw from the TPP, preferring bilateral to multilateral trade negotiations, and assuming an attitude of isolating itself of the APEC members aim to have an open system of trade and investment.

Chinese President Xi Jinping (5th L, front) poses for a group photo with other leaders and representatives from the Asia-Pacific Economic Cooperation (APEC) member economies at the 25th APEC Economic Leaders' Meeting in Da Nang, Vietnam, Nov. 11, 2017. [Photo: Xinhua]

Chinese President Xi Jinping (5th L, front) poses for a group photo with other leaders and representatives from the Asia-Pacific Economic Cooperation (APEC) member economies at the 25th APEC Economic Leaders' Meeting in Da Nang, Vietnam, Nov. 11, 2017. [Photo: Xinhua]

Giving that situation, and the fact that China is the second most important member of APEC in terms of economic weight, and the main engine of growth in the world economy, China contribution in APEC should become bigger. Below are some proposal for that:

a.With the withdrawal of the USA the TPP scheme has weakened, but now under the leadership of mainly Japan and Australia, a TPP 11 is being pushed up. The other pillar of the FTAAP is supposed to be the RCEP, but negotiations are not advancing as desired and an agreement will be not be achieved this year. China, as the biggest economy in this group should assume a leadership role in the RCEP. How? USA could exert leadership with the incentive of access to its big market. China could do also the same in the RCEP, as its economy is increasing in its size and becoming more attractive. Opening China economy more is also one objective of its economic reforms as it will give its consumers access to a wider variety of goods and services and will encourage its companies to be more competitive

b.China could work within the mechanism of the Economic and Technical Cooperation (ECOTECH) scheme in APEC, where more advanced member economies give cooperation and technical advice to other members in several fields. China is already achieving advances in several areas where could give cooperation, for example, in the theme of food security and sustainable agriculture in response to climate change, that is one of the main priorities in APEC, and is one of the four priorities that Vietnam has for this 2017 APEC year. In this case China is also making great contribution as in the recent news that Chinese scientists had made possible to grow rice in salty waters . The increasing presence of saline and alkaline soil in arable land areas is a growing problem in many countries, and this achievement by Chinese scientists will be of great help to many people in the APEC region, especially in Asia where rice is still the main dish. 

c.The development of human resources is a question of the utmost importance in the APEC member economies and is a priority issue also in ECOTECH agenda. China has also achieved advances in this area as has been show by the upgrading of its industry, having transformed from being mainly a producer of cheap goods using unskilled labor to becoming more and more a producer of high value added goods using skilled labor. China investment in education and on research and development is allowing this, experience that could share with other less developed APEC member economies.      

d.The lack of physical infrastructure (roads, seaports, railways, power grids, etc.), that makes connectivity difficult to achieve is a problem for many APEC member economies, and its solution will facilitate trade, movement of people and in general business in the region. In this regard the Chinese initiative of Belt and Road should be promoted in the APEC fora. China has the experience, the technology, the companies, the human and the financial resources, and specially the will to contribute with APEC economies in solving the problem of building the needed infrastructure. But the question of facilitating business in the region is not only a question of building physical infrastructure but also of promoting a payment system to increase online shopping and a cashless economy. In this regard China is the most advanced country in the world providing a system of mobile payments with its Alipay or Wechat Pay schemes. More than half of China population use already this system, making it easier for business and people, allowing millions of small businesses (including grocery stores, and taxis drivers for example) to do business with just their mobile phones . China should promote this technology and system payment in the APEC member economies.

(Carlos Alberto Aquino Rodriguez is a professor of international economics, San Marcos National University in Peru)

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