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        China in Urgent Need of Accelerating FTA Strategy

        2016-09-26 03:23:28ByZhangJianping
        China Report Asean 2016年2期

        By Zhang Jianping

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        China in Urgent Need of Accelerating FTA Strategy

        By Zhang Jianping

        Accelerating the implementation of the free trade area (FTA) strategy is necessary for China to participate in global economic development, deal with changes in the international and regional economic governance patterns, and build an open economic system. Through the FTA platform, the effects produced by mutual investment will help expand new global supply chains and regional production network and enrich the connotations of the open economic system.

        With the coming into force of the free trade agreements between China and the Republic of Korea (ROK) and between China and Australia on December 20,2015, the frst round of tarif reduction has begun. Since China started negotiations for the frst free trade area with ASEAN in 2001, it has signed a total of 16 bilateral and multilateral FTAs successively.

        Currently, in the global and regional economic governance patterns, developed economies try hard to promote economic integration dominated by some major powers through negotiations on TPP,TTIP and the EU-Japan FTA so as to gain new global competitive advantages. As China and other emerging economies are still in the process of industrialization and urbanization, to better safeguard national interests and foster new global competitive advantages, they must align with the trend of economic globalization and regional economic integration and speed up the pace of implementing the FTA strategy. If China wants to have more say, it must open wider to the outside world during FTA construction, expedite service sector opening-up,accelerate the implementation of national treatment before investment permission plus the negative list management mode,and formulate new rules on promoting fair trade and sustainable development.

        As the cost of labor force and other production factors continues to rise, China has to redouble eforts in developing goods trade featuring high brand value, high technological content and high added value, earnestly promoting investment in and development of the service sector and high value-added manufacturing industries to achieve economic transformation and upgrading. Meanwhile, the accelerated implementation of the FTA strategy will help China expand the space for foreign trade, joining hands with FTA partners in building new global supply chains and production networks, and allow more partners to share in the enormous Chinese market and ride its economic boom in a bid to jointly build a community of joint interests and destiny.

        In the first 11 months of 2015, China saw a year-on-year decrease of 7.8 percent in imports and exports, which includes a 2.2 percent drop in exports. Contributing factors include the weak global demand and time gap between the disappearing traditional advantages and emerging ones during the transformation and upgrading of foreign trade in this country. To overcome the negative impact on foreign trade, there is a need to shift from being export-driven to innovation-driven. To this end, more positive eforts must be made in opening wider to the outside world with a view to pushing forward the domestic reform while hard work must be done to optimize allocation of resources by building an open economic system. Te accelerated implementation of the FTA strategy is actually a major platform to initiate opening to the outside world under the “new normal”. Trough reducing tarif and non-tarif barriers, trade liberalization and facilitation will be improved constantly and both the role of exports in promoting the manufacturing industries and that of imports in stimulating consumption will be boosted;market access to the service sector will be made easier and the opening-up of both production and consumer services will also promote prosperity in services; the effects of mutual investment will expand promote new global supply chains and production networks and enrich the connotations of an open economic system.

        The Belt and Road Initiative has become an important platform for China to implement the more proactive opening-up strategy and build an open economic system. It has signed a series of FTAs including the upgraded version of China-ASEAN FTA, China-Pakistan FTA, China-Singapore FTA, China-New Zealand FTA,China-ROK FTA and China-Australia FTA. China is now working hard to advance the China-Japan-ROK FTA negotiations with Japan and ROK, and negotiations with the Gulf Cooperation Council, Sri Lanka,and the Maldives, and negotiations on the Regional Comprehensive Economic Partnership (RCEP). Moreover, China is also busy in negotiating with the Eurasian Economic Union on feasibility research for building a free trade area. In the coming years, China will strive to build free trade areas with all surrounding countries, as well as those countries and regions along the routes of Belt and Road Initiative, where conditions are mature, so as to improve the construction efciency of the Belt and Road Initiative and explore economic and trade rules suitable for its development.

        About the author:

        Zhang Jianping is the director of department of international economic cooperation at the Institute for

        International Economic Research of NDRC.

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