China’s president has warned the global economic recovery is unstable as he pushed for a free trade agreement for the Asia-Pacific region saying that would spur growth.
Xi Jinping was speaking at the Asia Pacific Economic Cooperation (APEC) summit in Beijing.
APEC includes China, the United States, Japan, South Korea, Indonesia and Canada. Its 21 members account for 40 percent of the world’s population, 57 percent of its economic output and 46 percent of trade.
There will now be a two-year study on the free trade agreement idea, which is all part of Beijing’s moves to play a bigger role in making trade policy.
The Chinese leader said: “This demonstrates our confidence in pushing forward regional economic integration.” Xi called it a “historic step, towards the goal of the Free Trade Area of the Asia Pacific” (FTAAP).
China’s promoting of such a free trade area is seen by some as a response to a US-led initiative, the Trans-Pacific Partnership (TPP), which includes 12 countries – but not China or Russia.
Beijing has launched various trade and finance initiatives as part of its desire for a bigger leadership role reflecting China’s status as the world’s second-largest economy.
FTAAP vs TPP
The TPP is widely seen as the economic backbone of US President Barack Obama’s “pivot” to Asia, what some experts view as an attempt to balance China’s rise by establishing a larger US presence in the region.
US Trade Representative Michael Froman told reporters there was significant momentum toward building the TPP.
“All the countries are very focused on doing that, but we want to make sure that we get it right,” he said.
Business leaders attending the APEC forum have been looking for signs of progress on the TPP, which had been stalled since September, especially as China continues to push for the FTAAP.
Xi was quoted by state news agency Xinhua on Monday as saying that FTAAP “does not go against existing free trade arrangements which are potential pathways to realise FTAAP’s goals”.
Japanese Prime Minister Shinzo Abe welcomed China’s efforts this year on crafting a roadmap for the FTAAP scheme.
“Looking beyond TPP, we also have in sight the realisation of FTAAP that will create an even bigger market,” Abe told a news conference. “At this APEC summit, we were able to create a roadmap for that.”
with Reuters and AP