[A2k] FT: China pledges to lead the way on global trade

Thiru Balasubramaniam thiru at keionline.org
Sun Nov 20 02:50:10 PST 2016


China pledges to lead the way on global trade

President Xi outlines vision amid fears of US disengagement from Asia under

Pacific Rim leaders vow to fight new wave of protectionism

NOVEMBER 19, 2016

by: Shawn Donnan and Andres Schipani in Lima

Chinese president Xi Jinping vowed on Saturday to open the door even wider
to foreign business and play an even greater role in the process of
globalisation as Beijing moved to take advantage of Donald Trump’s election
and fears that he may herald a new era of US disengagement from Asia.

Speaking to business leaders on the sidelines of a 21-country Asia-Pacific
Economic Cooperation summit in Peru, Mr Xi offered a vision of a
Chinese-led order marked by openness to trade and the free flow of
investment. In a thinly-veiled rebuke of US President Barack Obama’s push
to create a Trans-Pacific Partnership with Japan and 10 other economies
that excluded China he also vowed to pursue trade agreements open to all.

“China will not shut the door to the outside world but will open it even
wider,” Mr Xi said, vowing to "fully involve ourselves in economic

"Close and exclusive arrangements are not the right choice,” he said.

Mr Xi’s invocation came as this month’s surprise election of Mr Trump, who
has vowed to pull the US out of the TPP and threatened to take a more
combative approach to trade with China, Mexico and other major partners,
dominated discussions at the annual Pacific Rim summit.

It also reinforced what has become the main theme at this year’s APEC
meeting with China moving quickly to take a leadership role that many see
being abdicated by the US as the advocate of free trade and open economies
in the fast-growing Asia-Pacific.

Speaking at a meeting with Mr Obama later on Saturday, the Chinese leader
said relations between China and the US were now at an important juncture.

“We meet at a hinge moment in the China-US relationship,” he said. “I hope
the two sides will work together to focus on cooperation, manage our
differences, and make sure there is a smooth transition in the relationship
and that it will continue to grow going forward.”

With the future of the TPP in doubt, China has been pushing a rival
Regional Comprehensive Economic Partnership and an even broader Free Trade
Area of the Asia-Pacific.

Importantly, the RCEP has been attracting new interest from countries such
as Peru who are keen to plug into fast-growing economies in Asia.

Mr Xi said on Saturday that he expected to conclude the RCEP soon. He also
opened the door to Latin American countries joining China’s “One Belt, One
Road” initiative, which was launched to revive the ancient Silk Road to
Europe but has become a much bigger strategic project.

“We like the US being in the region. But if the US is not there that void
needs to be filled, and it will be filled by China.”

John Key, New Zealand’s prime minister

John Key, New Zealand’s prime minister, said he would work to try and
convince Mr Trump of the value of the TPP and the importance of US
engagement in Asia. But he also warned that his country and others would
not wait forever.

“There needs to be a realisation [in Washington],” he said. “The reason
that President Obama pursued the TPP was all about the United States
showing leadership in the Asia-Pacific region. We like the US being in the
region. But if the US is not there that void needs to be filled, and it
will be filled by China.”

Enrique Peña Nieto, Mexico’s president, took a more conciliatory approach
to Mr Trump, saying that while he believed in the TPP and would work to try
and convince the new US president to back it he was prepared to discuss
“modernising” the North American Free Trade Agreement between the US,
Canada and Mexico. Mr Trump has promised to begin renegotiating the
23-year-old agreement in his first 100 days in office.

“Mexico’s position on Nafta is that instead of talking of a renegotiation,
let’s talk of a modernisation of Nafta,” Mr Peña Nieto said. “Let's
modernise Nafta, let's make it a much more potent vehicle, a much more
modern vehicle that could allow us to really consolidate this strategic
relationship between Mexico, the US and Canada, as a much more productive
and competitive region before the world.”

“I want to be emphatic: for Mexico, due to its geopolitical position,
without a doubt its central relationship is with the US,” the Mexican
leader said. “We are not here to recognise a particular leadership … We are
not here to pick between black and white. We believe in openness, we
believe in integration, we believe in globalisation.”

Eric Farnsworth, vice-president of the Council of the Americas, said
Saturday’s speech by Mr Xi looked like the announcement of a “strategic
realignment” in the Pacific Rim.

“He clearly said we are open for business and we want you to come along …
You compare and contrast that with where the United States is heading — and
we may be looking more inward — it is a moment where if you are on the
fence in terms of what direction you want to go or where your future lies
you have to look at China.”

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