The members of Asia-Pacific Economic Cooperation (APEC) have agreed to initiate the formation of a free trade area in the Asia-Pacific — a vision steered by China, which competes with the Trans-Pacific Partnership (TPP) initiative of the United States.
Summit host Chinese President Xi Jinping praised the in principle endorsement of the Free Trade Area of the Asia-Pacific (FTAAP) as a decision that “will be written into history books”. He said backing for the initiative “demonstrated the confidence and determination of the APEC in advancing regional economic integration”.
In his closing address on Tuesday, Mr. Xi said the business community wanted the FTAAP, which is expected to include Russia, Beijing’s geostrategic partner. Russian President Vladimir Putin has praised the Chinese initiative, a day after Beijing and Moscow signed a preliminary agreement on a new route to transfer copious quantities of Russian natural gas into China.
U.S. President Barack Obama has lauded the Chinese move, but after announcing the imminence of the Washington-led TPP deal that pointedly excludes China but includes Japan and Australia in its 12-member star-cast.
China accelerated its push for the FTAAP after it began to view the TPP as the economic extension of the “Asia Pivot” of the U.S., meant to contain Beijing’s rise through an amassing of forces around China’s periphery.
Aware of the concerns over its rise, China has been emphatic in stating that its growing economic heft is a win-win situation that would reinvigorate the flagging global economy. “We have reached consensus that regional economic integration is the driving force behind sustained strong growth in the Asia-Pacific, and APEC should continue to play a leading and coordinating role in pushing forward this process,” observed President Xi during a closing media conference.
His point has been reinforced by a study conducted by the Pacific Economic Cooperation Council (PECC) that says the FTAAP will add an estimated $2.4 trillion to the global economy. In comparison, the TPP is estimated to contribute $223 billion. The Regional Comprehensive Economic Partnership (RCEP) — a grouping led by the Association of South East Asian Nations (ASEAN) is expected to pitch in with $644 billion.
During the summit, China emerged as the leading advocate for developing new trade routes that radiate from the country by pledging to pump billions of dollars for infrastructure projects that would open up new centres of growth. It is also leading efforts to form the $50-billion Asian Infrastructure Investment Bank (AIIB), which could compete for projects with the World Bank.
China has been the chief advocate for reviving the ancient Silk Road as a trade corridor that would link Asia with Europe, as well as the 21st century Maritime Silk Road for global trade along sections of the Pacific and the Indian Ocean.
