China’s global role
For the first time, the Trade and Investment Working Group is among the Group of 20’ s ( G20) working groups, demonstrating the increasingly important role trade and economic governance plays in global governance. G20 nations should enhance the global trade vitality by proactively participating in this governance and China can also play an active part in the restructuring and policymaking of trade and economic rules.
China should let its contributions be guided in various ways by this year’s G20 summit theme: “Toward an Innovative, Invigorated, Interconnected and Inclusive World Economy.”
First, China’s pilot free trade zones ( FTZ) strategy demonstrates an institutional innovation needed at the G20 summit. The FTZ policies include measures of the management approach of negative lists, trade facilitation and further opening up of financial services. China has been pushing for the implementation of these methods in pilot FTZs in Shanghai, Tianjin, Guangdong Province and Fujian Province, which is part of China’s effort to contribute to global governance, build better bilateral free trade agreements and construct a more open world economy.
Second, China has spared no effort in buoying global economic growth through long- term institutionalization in G20 members in an attempt to keep global trade invigorated. G20 nations should agree to the Trade Facilitation Agreement ( TFA) under World Trade Organization ( WTO) soon so they can better develop a multilateral trading system. China joining the TFA is a significant move which fosters trade liberalization, protects WTO’s central status as a multilateral trading system and is an incentive for all G20 countries to participate in inter- national trade governance.
Third, the Belt and Road initiative strengthens ties among route countries and has allowed China to take a leading role in regional governance. The value chains formed along the route further make the impacted economies interconnected.
Fourth, efforts to establish global value chains ( GVCs) demonstrate the inclusiveness at the center of global trade and economic governance. The G20 Trade and Investment Working Group aims to strengthen the capability of GVCs, which will drive trade and investment and push participation from developing countries and small and medium- sized enterprises.
The G20 summit is also an opportunity to exercise China’s discourse power in establishing international trade rules. Recently, two major trade agreements have taken shape: the Trans- Pacific Partnership ( TPP) and the Transatlantic Trade and Investment Partnership ( TTIP). Both mark American- led integration efforts to press ahead with new rules for regional
trade and in- vestment as multilateral trade regimes hit roadblocks. In doing so, the US and Europe are seeking to regain dominance over international rules, while weakening influence from emerging markets through thresholds for access to high- level, high- standard regional arrangements.
A group of 23 WTO members have been involved in negotiations on the Trade in Services Agreement ( TiSA), according to the European Commission. The negotiations aim to update relevant rules related to trade in services under the WTO framework to implement high levels of free trade in service sectors.
China needs to proactively avail itself of the G20 global governance platform to take part in various regional trade arrangements as well as foster the development of multilateral trade systems. Presently, negotiations over the Regional Comprehensive Economic Partnership ( RCEP), talks about a bilateral investment treaty ( BIT) between China and the US as well as gearing up for the domestic implementation of FTZs all require active involvement from China. It can’t be denied that an increasing number of trade rules are of great importance to China. As such, the country must actively respond and seize the initiative.
China should accelerate opening up all around – from ramping up the building of FTZs to implementing the national initiative for the One Belt, One Road – in an effort to integrate a new array of international trade rules in the country and acclimate to high- standard trade and investment policy. The G20 not only serves as a platform for governing the global economy, but acts as an effective route in setting up international trade rules.
As the host of this year’s summit, China should wholly undertake a leader’s role in guiding G20 agenda setting which will profoundly influence the future of international trade governance.
Right now, the global economy suffers lackluster growth while regional economic and trade cooperation evolves in a complicated way and new international rules keep coming up. These present opportunities and challenges for countries seeking to boost economic and trade power. The development of global governance is intimately connected to China’s ambitions to turn itself into a global economic and trade power.
The future development of China’s foreign trade will be intertwined with newly sealed international trade rules, which means China will need to take an active role in regional integration negotiations and in understanding the new rules and standards which will be incorporated into the idea of global governance under the G20 framework.