Keen for free trade
- By Shi Yongming
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E-mail Beijing Review, May 24, 2013
China's priorities
While seeking an FTA, China must consider its own demand along with the international environment. Free trade, which helps bring into play different countries' complementary advantages and promote fair competition, is conducive to propelling development. But the level of free trade must suit a country's economic development. China faces challenges in its choice of a free trade pattern at a time when the country undergoes an economic transition and the world economy enters a new phase of technological innovation.
China's economic transition is not a problem of being driven by internal or external demands, but rather one of economic development capability being internal-oriented or external-oriented. During the past 30-plus years, China's pace of reform has lagged far behind the pace of opening up. It has overly depended on low resource costs and imported technology, while neglecting independent innovation. Now it has lost its low-cost advantage, and tariffs will no longer be a major trade obstacle.
The next round of global economic competition will focus on technology, systems and social governance levels. Under the new conditions, developed countries may regain their lost frontier of industrial production following a new round of production transfer in a low-tariff free trade environment. China should therefore consider FTA negotiations as an impetus for driving the progress of its own undertakings.
The author is an associate research fellow with the China Institute of International Studies.
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