Many in China perceive the TPP as a US-led consortium against Chinese strategic clout in the region
A top priority for the new Chinese leadership will be addressing the challenges in the regional economic landscape. China, along with the rest of Asia, is closely following the Trans-Pacific Partnership (TPP). The US is the driving force behind this sub-regional trade block coming up in the Asia-Pacific region. Comprising Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and the US, the TPP, while being a collective of APEC members, does not include major APEC economies like China and Indonesia. The groupís economic significance has increased with the addition of Canada and Mexico and will become even more if Japan, South Korea and Thailand join it.
Most opinions in China perceive the TPP as a US-led alliance for reducing Chinaís strategic clout in the region. Gradually, some other opinions are gaining influence. These include efforts for assessing the economic gains and losses of Chinaís staying out of the TPP, or, in the distant future, becoming a part of it. Given Chinaís strong trade and investment links with several TPP members, losses from diversion of trade and capital flows cannot be ruled out. These impacts are being assessed for gauging the economic Ďharmí that TPP can inflict on China.
The growth of the TPP has encouraged China to invest more resources and energy in other regional integration efforts. China is part of all integration efforts involving ASEAN and other major Asian economies. These include the ASEAN+3 (China, Japan, Korea) and the East Asian Summit (EAS). The latter includes ASEAN, China, Japan, Korea, India, Australia, New Zealand, US and Russia. The EAS will probably become marginal to the RCEP, or the Regional Comprehensive Economic Partnership.
The RCEP involves the integration of the ASEANís FTAs with non-ASEAN Asian economies. It would aim to consolidate the FTAs that ASEAN has with Australia, New Zealand, China, India, Japan and Korea. The consolidation would result in the ASEAN connecting to the rest of the major Asian economies in a Ďhub and spokeí economic framework with ASEAN as the hub.
Over the next few years, the Asia-Pacific would witness growth of both the TPP and the RCEP. Considerable interest has been generated among the economic and strategic communities over whether simultaneous negotiations would proceed harmoniously in the two arrangements. This is a major concern for China.
The TPP has had a head-start over the RCEP.