West Coast Publishing Surveillance 2015 november page

China doesn’t need the TPP for global leadership

And China clearly doesn’t require the TPP to enhance its already sizeable influence in the world. Beijing is a card-carrying member of the World Trade Organization, has a permanent seat on the United Nations Security Council and is the driving force behind the Asia Infrastructure Investment Bank (AIIB), which could potentially become a rival to the World Bank and Asia Development Bank once it gets going. The China-led AIIB, which has the support of dozens of countries, aims to fund infrastructure projects in the region and could help Beijing buy the support of its neighbors. China is also on track to become one of the world’s biggest overseas investors by 2020, with outbound foreign direct investment already topping $100 billion a year. In some countries, China’s investment is actually bigger than the loans they get from the International Monetary Fund, and that gives Beijing a lot of economic and political clout. On top of that China is busy negotiating its own free-trade pact with 15 countries in the Asia Pacific region and is expected to become the world's largest economy in the next decade. “That preponderance is driven by China’s sheer size, its continued growth — which though slower than in the past is still faster than that of most other Asian economies — and its increasing centrality in global supply chains,” Arthur Kroeber, managing director of Gavekal Dragonomics and editor of China Economic Quarterly, told Foreign Policy. Missing out on a TPP membership card won't change that.

A2: Hurts Chinese Economy / Leadership

TPP will not undermine Chinese economic influence in Asia for three reasons

Arthur R. Kroeber, managing director of GaveKal Dragonomics and editor of China Economic Quarterly, October 5, 2015, “What Will the TPP Mean for China?,” Foreign Policy, http://foreignpolicy.com/2015/10/07/china-tpp-trans-pacific-partnership-obama-us-trade-xi/, ACC. 10-31-2015

For the most part I concur with Barry about the scale and importance of the TPP, and the challenges it poses for China both economically and strategically. I’m not sure I agree, though, that it will do much to “reduce Chinese economic preponderance” in the region. That preponderance is driven by China’s sheer size, its continued growth — which though slower than in the past is still faster than that of most other Asian economies — and its increasing centrality in global supply chains. Moreover, China has its own strategy for increasing its influence, through projects under the “Belt and Road” umbrella, which will be funded by Chinese policy banks and the Chinese-led Asian Infrastructure Investment Bank (AIIB). The impact of the Belt and Road initiative will likely be felt more immediately and concretely than the effect of the TPP, many of whose features will phase in slowly over several years.

TPP would improve Chinese economic performance via reforms

Barry Naughton, the So Kwanlok Chair of Chinese International Affairs at the Graduate School of International Relations and Pacific Studies at the University of California, San Diego, October 5, 2015, “What Will the TPP Mean for China?,” Foreign Policy, http://foreignpolicy.com/2015/10/07/china-tpp-trans-pacific-partnership-obama-us-trade-xi/, ACC. 10-31-2015

Third, TPP increases the pressures within China for more decisive economic reforms. China launched the Shanghai Free Trade Zone (FTZ) two years ago, partly in order to pilot measures of external liberalization that would be useful in a new round of reform. The possibility that TPP would be agreed to was a consideration, and part of the impetus for the Shanghai FTZ. However, the FTZ has so far under-performed expectations. Now, the new trade agreement will present officials with a clear benchmark of global best practice. The TPP will give advocates of economic reform within China a new argument to support more substantial opening measures after a bad year.

A2: TPP = Global Model

TPP will not go global

Guy de Jonquières, a senior fellow at the European Centre for International Political Economy, October 5, 2015, “What Will the TPP Mean for China?,” Foreign Policy, http://foreignpolicy.com/2015/10/07/china-tpp-trans-pacific-partnership-obama-us-trade-xi/, ACC. 10-31-2015

Obama’s claims that the TPP will enable the United States to set the rules for global trade also look more than a touch hyperbolic for other reasons, too. For one thing, to do so would require China’s assent. But why should China sign up to U.S.-prescribed rules on labor or environmental standards, with no guarantee of obtaining reciprocal trade benefits from the U.S. that Washington would undoubtedly find politically difficult to deliver? For another, to be truly global, rules would require the acquiescence of the European Union. Yet attempts by Washington and Brussels to achieve common regulatory ground in negotiations on the Transatlantic Trade and Investment Partnership are progressing very slowly, and in some areas the gaps between the U.S. and Europe appear to be widening, not narrowing. For all these reasons, China may feel it can afford to take a relaxed attitude to TPP. In any case, it now believes initiatives such as One Belt One Road, the China-led AIIB and Regional Comprehensive Economic Partnership (RCEP), its own regional trade plan, have given it options. In addition to which, as Arthur points out, it is far from obvious that Washington has a coherent strategic vision of how the TTP fits into its concept of its relations with China.

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