Free trade seen as key to global eco­nomic growth China to pur­sue more co­op­er­a­tion agree­ments this year, say com­merce of­fi­cials

China Daily (Canada) - - XI’S VISIT - By ZHONGNAN

Sup­port­ing a mul­ti­lat­eral trad­ing sys­tem is the most ef­fec­tive way of beat­ing slug­gish global eco­nomic re­cov­ery, weak trade and in­vest­ment ac­tiv­i­ties, a lack of growth mo­men­tum and the grow­ing back­lash against glob­al­iza­tion, ac­cord­ing to se­nior com­merce min­istry of­fi­cials.

Com­merceMin­is­ter GaoHucheng said since join­ing the World Trade Or­ga­ni­za­tion in 2001, China’s ex­port vol­umes and in­dus­trial up­grad­ing had no­tably in­creased.

Even though the na­tion has been con­fronted with var­i­ous trade rem­edy in­ves­ti­ga­tions of its ex­ports, rang­ing from high-end iron and steel prod­ucts to pho­to­voltaic pan­els and wind tur­bines, it has pro­moted the mul­ti­lat­eral trad­ing sys­tem while also sign­ing a num­ber of free trade agree­ments with part­ner coun­tries, he said.

Be­tween Jan­uary and Dec 21, 2016, ris­ing trade pro­tec­tion­ism saw China sub­jected to 117 trade rem­edy in­ves­ti­ga­tions, worth an es­ti­mated $13.98 bil­lion — 34.5 per­cent and 71.5 per­cent year-on-year in­crease, re­spec­tively, data from the min­istry show.

In or­der to re­store the coun­try’s earn­ing abil­ity, more free trade agree­ments are in the pipe­line with coun­tries such as Is­rael and the mem­ber states of the Gulf Co­op­er­a­tion Coun­cil, while talks with Pak­istan, Sri Lanka and theMal­dives are also set to be ac­cel­er­ated this year.

By the end of last year, agree­ments had ei­ther been es­tab­lished, or were be­ing ne­go­ti­ated, be­tween China and 25 coun­tries and re­gions along the routes of the Belt and Road Ini­tia­tive.

The ini­tia­tive, com­pris­ing the Silk Road Eco­nomic Belt and 21st Cen­tury Mar­itime Silk Road, was pro­posed by Pres­i­dent Xi Jin­ping in 2013 and aims to boost con­nec­tiv­ity and trade across Asia, Africa and Europe.

Of­fi­cials have also in­di­cated that talks will be ac­cel­er­ated this year on the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship, a pro­posed free trade pact be­tween 16 economies in­clud­ing Aus­tralia and the As­so­ci­a­tion of South­east AsianNa­tions.

“The RCEP is usu­ally viewed as a ri­val trade bloc to the Trans-Pa­cific Part­ner­ship Agree­ment pro­moted by the United States,” said Zhang Jian­ping, di­rec­tor of the Com­merce Min­istry’s Re­search Cen­ter for Re­gional Eco­nomic Co­op­er­a­tion.

“But in fact, it was pro­posed by the ASEANand­has been­pushed­for­ward by coun­tries such as In­done­sia.

“As it can ef­fec­tively im­prove re­gional trade flows, China im­me­di­ately re­sponded to the pro­posal. It is an open plat­form and we have no in­ten­tion of iso­lat­ing any coun­try in terms of con­duct­ing trade ac­tiv­i­ties.”

Trade lib­er­al­iza­tion is fur­ther be­ing pur­sued with the plan for a Free Trade Area of the Asia-Pa­cific, which China pro­moted at the 2014 Asia-Pa­cific Eco­nomic Co­op­er­a­tion Eco­nomic Lead­ers’ Meet­ing in Bei­jing.

If the FTAAP is achieved, it would cover 40 per­cent of the world’s pop­u­la­tion and 60 per­cent of the global econ­omy, mak­ing it the big­gest trade pact by goods vol­ume, ac­cord­ing to a case study by the Na­tional Univer­sity of Sin­ga­pore.

Zhang Shao­gang, di­rec­tor-gen­eral of the Depart­ment of In­ter­na­tional Trade and Eco­nomic Af­fairs at the Min­istry of Com­merce, said that be­sides the trade in goods, other cross-bor­der e-com­merce ac­tiv­i­ties to be pro­moted by the joint ef­forts of gov­ern­ments and com­pa­nies in the Asia-Pa­cific re­gion in 2017 in­clude a dig­i­tal-based trade plat­form, a green sup­ply chain and data­base devel­op­ment.

China’s cur­rent push to stim­u­late growth by fo­cus­ing on sup­ply-side struc­tural re­form, which aims to cut low-end in­dus­trial ca­pac­ity while in­creas­ing high-tech pro­duc­tion, is also im­por­tant, ac­cord­ing to Zhou Li­u­jun, di­rec­tor­gen­eral of the min­istry’s depart­ment of out­ward in­vest­ment and eco­nomic co­op­er­a­tion.

“Its ef­forts in this area can bring eco­nomic ben­e­fits to many coun­tries that are striv­ing to get their strug­gling economies back on track,” he said.

Yu Jian­long, sec­re­tary-gen­eral of the China Cham­ber of In­ter­na­tional Com­merce, pre­dicted that the global trade en­vi­ron­ment will re­main chal­leng­ing this year, as both the Euro­pean Union and the United States are un­der­go­ing dra­matic po­lit­i­cal changes. There are also some dis­putes over the pace and scope of trade lib­er­al­iza­tion, ac­cord­ing to Tu Xin­quan, a pro­fes­sor at the Univer­sity of In­ter­na­tional Busi­ness and Eco­nomics in Bei­jing. “The con­di­tions of ev­ery coun­try are dif­fer­ent, and the ca­pac­ity to adopt a pol­icy of lib­er­al­iza­tion and ben­e­fit from it also varies,” he said.

“Af­ter all, lib­er­al­iza­tion is a pol­icy ori­en­ta­tion that will re­vert if progress is not achieved. Lib­er­al­iza­tion that is too slow or stag­nant means re­ces­sion in re­al­ity.”

Ac­cord­ing to Zhang, the com­pany will soon es­tab­lish a pi­lot project in Hangzhou to test the eWTP with real busi­nesses and hope­fully take the project to a wider num­ber of out­lets in China so it will even­tu­ally be adopted across the world.

Many for­eign brands have al­ready used Alibaba’s plat­forms to make for­ays into China. Last year, the com­pany’s Tmall Global, which en­ables in­ter­na­tional brands to sell on­line di­rectly to Chi­nese con­sumers, saw the num­ber of cat­e­gories of im­ported prod­ucts climb by nearly 50 per­cent to 3,700. Now, more than 14,500 in­ter­na­tional brands from 63 coun­tries and re­gions fea­ture on Tmall Global.

The ul­ti­mate goal of the eWTP is to en­able peo­ple to con­duct trade any­where in the world, not just China. How­ever, that seems a long shot be­cause it will re­quire low im­port du­ties, rapid cus­toms clear­ances and bet­ter ac­cess to lo­gis­tics.

To achieve that aim, the plat­form will re­quire strong sup­port from gov­ern­ments around the world, and some na­tional lead­ers have al­ready come on board. For ex­am­ple, in De­cem­ber, the Thai Min­istry of Com­merce signed a com­pre­hen­sive part­ner­ship deal with Alibaba in an at­tempt to en­able the coun­try’s SMEs to con­duct e-com­merce busi­ness in and out­side Thai­land.

Luigi Gam­bardella, pres­i­dent of Chi­naEU, a busi­ness-led In­ter­na­tional As­so­ci­a­tion in Brus­sels, said he ex­pects the eWTP ini­tia­tive to be en­dorsed by a larger num­ber of in­ter­na­tional lead­ers.

“The so­lu­tion to to­day’s eco­nomic slow­down is to in­crease the in­clu­sion of global trade and im­prove the in­volve­ment of SMEs,” he said.

“The eWTP will pro­vide SMEs with a trans­par­ent and open plat­form to sell their goods and ser­vices glob­ally, thus fa­cil­i­tat­ing their in­clu­sion in cross-bor­der e-trade.”

How­ever, he stressed that the fi­nal goal should be e-com­merce with­out bor­ders that will give con­sumers the free­dom to shop on­line with­out lim­i­ta­tions.

Luigi Gam­bardella, Chi­naEU pres­i­dent

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