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The Ministry of Commerce of China has formally submitted an application to New Zealand to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). This move triggered different reactions and interpretations. Most people believe that Beijing’s application for membership at this time was mainly expressing a political posture, because Beijing also knows that China’s current economic system must reach the level of openness stipulated by the CPTPP. There is a long distance. Although it is impossible to be agreed to join in the near future, Beijing should put on a stance of striving to join and show the world that China will not stop opening to the outside world due to various disturbances, both external and internal. .
It was only after China reached the “Comprehensive Economic Partnership Agreement” (RECP) in December last year that Xi Jinping announced that it would seek to participate in the CPTPP in the next step. Previously, China had two attitudes towards CPTPP. One was that China had no hope of joining the CPTPP at this stage due to the high-level requirements of CPTPP; the other was that China should strive to join the CPTPP as soon as possible, so that the United States would not be able to gain economic benefits. Contain China. Of course, there are also nationalist views that China does not need to join the CPTPP and that joining will only undermine China’s economic autonomy and the party’s control over the economy. Although this latter point is not in the mainstream, it will in fact play a role in Beijing’s decision-making on the issue of whether China will further open up.
Although the Chinese leaders expressed their desire to join the CPTPP, Beijing’s application at this time did surprise some people, because it seemed that the pace was a bit fast, and it is unlikely that China would have satisfied most of the CPTPP in less than a year. The main requirement. Therefore, it seems reasonable for Beijing to apply for membership as an expression of political gesture. Another explanation is that from a geopolitical perspective, Beijing wants to form a larger economic alliance to hedge against the recent security and military alliance (AUKUS) formed by the United States with Australia and the United Kingdom. The purpose of the latter is clearly to target China’s growing ambitions in the Pacific, while Beijing wants to economically weaken and break Washington’s military containment efforts. The American media mostly hold this view.
However, the closeness of the time between the formation of AUKUS and China’s application to join the CPTPP is probably just a coincidence. It is impossible for China to know in advance the date when the United States, Britain and Australia announced their alliance, and the preparation of the documents will also take some time. From this point of view, the reasonable explanation is that Beijing did early research and preparations to join the CPTPP. The announcement to join indicates that Beijing has completed internal disputes. After that, it is to improve the domestic business environment for the formal application and make corresponding measures. The text is prepared. However, although Beijing did not foresee that Washington would openly pull London and Canberra into a military alliance against China, as Sino-US confrontation has become the norm and will continue for a long time, over time, Beijing will feel this confrontational pressure. And the way to relieve the pressure of the United States is that because Beijing’s strength lies in the economy, economically expanding China’s circle of friends and drawing Washington’s allies into its own economic track has become Beijing’s rational choice. In other words, Beijing does have this intention.
Reality also just provides space. Although Biden is in power, Beijing judges that the Biden administration is unlikely to return to the CPTPP. After the Asia-Pacific countries sign the RCEP, if China joins the CPTPP before the United States, the two major free trade agreements in the Asia-Pacific region will not have the United States. China’s economic influence in the Asia-Pacific region will ebb and flow. Given the size of China’s economy, once it joins the CPTPP, it will play a key driving force in the integration of the Asia-Pacific economy. Therefore, it will become difficult or even impossible for Washington to unite with its allies to deter China economically. This is Beijing’s plan. When interpreting Beijing’s application to join the CPTPP, Chinese state media made no secret of claiming that it had entered the “enemy’s heart”, because CPTPP’s current 11 member states, Japan, Canada, Australia, and New Zealand, are all allies of the United States. The first three are still its core allies.
However, because the CPTPP is dominated by US allies, the outside world judges that it is not easy or even impossible for Beijing to join, so they question whether Beijing’s application for joining is a serious show. With Japan, Canada, and Australia all at odds, Beijing certainly understands the difficulties. But determining whether China can join the CPTPP, geographical factors are only one of them, and whether China itself complies with the CPTPP rules is actually more important. If China’s economic opening and related system requirements do not meet the CPTPP requirements, even if these countries are friendly to China, it will be difficult to join.
It is not clear to the outside world which conditions are met by Beijing’s application. Judging from the requirements of the CPTPP rules, it restricts state-owned enterprises’ access to government subsidies, requires contracting states to share information about their state-owned enterprises with each other, and eliminates excessive state intervention in the market; Equal treatment; at the same time, it is forbidden to set up a data center as a market access condition for e-commerce companies, and it is forbidden to require e-commerce companies to transfer or obtain software source code; to provide overseas operators with broader intellectual property protection, and so on. In addition, as the world‘s highest standard free trade agreement, CPTPP also has many regulations on labor issues, environmental protection and dispute settlement, such as allowing the existence of independent trade unions and environmental organizations. Obviously, even if Beijing can meet the above-mentioned restrictions on government subsidies and access, labor and environmental protection requirements, Beijing will probably find it difficult to accept for a while, because this has gone beyond economics and involves politics. From the current government’s approach, It is unlikely that political control will be loosened for economic gain.
Therefore, from this perspective, Beijing’s application to join the CPTPP can be regarded as a “serious” political public relations show, but this is not without meaning. In addition to indicating to the world that China will continue to open up, it also lies in: China will not engage in American-style military alliances and gang formations in the Asia-Pacific region, but is prepared to use economic mutual benefit to attract partners. This is still attractive to countries and even some US allies who are unwilling to choose sides between China and the United States.
However, if you only think that Beijing is doing a political show, you can only see one side of the matter. On the other hand, Beijing really wants to join and believes that it has confidence in joining the CPTPP. Since this is a way to break the siege by the United States and is economically beneficial to China, Beijing will certainly not give up. What Beijing hopes most is to join the existing conditions. If it fails, it will try its best to meet most of the requirements of the CPTPP. It is indeed difficult in the short term to fully meet all the conditions of the CPTPP. So, will Beijing promote domestic reforms in order to join the CPTPP in order to reach the entry barrier?
Those who regard Beijing’s application for membership only as a political gesture and believe that Beijing will not reform, but this view is likely to be wrong. In fact, in the past few years of the trade war with the United States, in response to changes in the external environment, Beijing is still very strong in promoting reforms, especially opening up, including the opening of financial services, such as allowing wholly foreign-owned enterprises to enter the Chinese market. In the past, this was something foreign investors wanted to see. Recently, China has conducted pilot projects in Qianhai and Hengqin in the Guangdong-Hong Kong-Macao Greater Bay Area to explore a new development model in cooperation with Hong Kong and Macao. Joining CPTPP is a continuation of this openness. In China’s economic circles, advocating to join the CPTPP as the mainstream is aimed at driving domestic reforms through this move. Beijing is quite flexible economically. People’s worry that Beijing will be closed to the country can only happen under extreme circumstances. Of course, it remains to be seen whether Beijing will allow enterprises to set up independent trade unions in order to enter the CPTPP. It remains to be seen, but it is likely that it does not think this is an obstacle.
If Beijing reaches the threshold of CPTPP, will its member states, especially Japan, Canada, and Australia, embarrass Beijing for geopolitical purposes? Most people agree that they will do this. Because CPTPP adopts the method that every member country agrees to enter, as long as one country disagrees, Beijing cannot join. This makes it easy for countries that are hostile to China to boycott or blackmail it. This is also the reason why the outside world is not optimistic that Beijing can join the CPTPP in the short term, even if China meets its conditions. However, since Beijing has filed an application, according to the tradition of not fighting insecure battles, Beijing must have some confidence in its preparations for joining.
On the question of whether Japan, Canada, and Australia will prevent Beijing from joining, we might as well be relatively optimistic. First of all, China’s accession is also beneficial to the existing member states of CPTPP. According to a research report by the Peterson Institute for International Economics, if China joins the CPTPP, by 2030, China’s national income is expected to increase by US$298 billion, while other members of the CPTPP are expected to increase their income by US$632 billion, which is more than twice that of China. These member states are willing to give up such a big market, especially for countries that have close trade relations with China. Therefore, this is a win-win situation and wins more than China. Secondly, CPTPP is now dominated by Japan, because Japan has the largest economy among the 11 countries. As long as China can deal with Japan, Canada and Australia will have no big problems. Will Japan agree to China’s accession? It seems unlikely that Japan will follow the United States to fight China. But don’t forget that Japan is actually quite rational economically, and you know this from its approval of RECP. Beijing also has a bait for Japan, which is the free trade agreement between the two countries. Tokyo very much hopes to have a free trade agreement with Beijing, but Beijing is reluctant. In exchange, Beijing may sign a free trade agreement with Japan in exchange for Tokyo’s agreement. If Japan agrees, only one or two countries will disagree, and it will be pressured by other member states. What’s more, for Australia, Beijing still has a killer feature, that is, to reduce its purchase of iron ore. China is the largest buyer of Australian iron ore, if Canberra hinders it.
It is a bit early to predict whether Beijing can finally join the CPTPP smoothly. It will take at least one or two years to negotiate with the 11 member states. But it applied to the CPTPP to show that China is further opening up and embracing globalization. This is what Beijing wants to express the most. As a world-scale and systematic supplier of production capacity, China is also becoming a world-scale demander. In this sense, Beijing’s choice of opening up is related to human well-being.
(Note: The author is an independent scholar and a researcher at the China Strategic Analysis Think Tank. This article only represents the author’s personal views. The editor’s mailbox [email protected])