Renew trade policy for 'new normal' economy
- By Zhang Lijuan
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E-mail China.org.cn, April 2, 2015
Unfortunately, the pace of such imports is increasing, not decreasing. With the area of arable land decreasing as grain consumption and serious food safety issues increase, it is hard to imagine how such a populated nation is going to survive in the face of global agricultural competition from the U.S. and the EU. Therefore, China needs a new comprehensive national strategy to advance its farming and agricultural policy in response to both internal and external factors.
Third, China should promote trade liberalization in its service sectors, but it must simultaneously secure solid domestic economic growth. Some sectors of the Chinese economy are not ready to be fully globalized, currency and banking chief among them. The feasible and reasonable openness of financial sectors can serve well as a catalyst for China's economic growth. China should be invited to join the Trade in Services Agreement negotiations, which could provide tremendous opportunities for China to further its financial reform and open its trade in services.
During China's World Trade Organization accession negotiations, multilateral external pressures played a key role in establishing its present-day open trade stance. However, financial liberalization can easily create bubbles in the already fragile Chinese economy, and it is much easier now than ever before for these bubbles to spread to the rest of the world. This can partially explain why China has taken so long to work out the "Negative List" with regard to the U.S.-China Bilateral Investment Treaty.
Last but not least, China should make pioneering contributions to Asian regional trade liberalization. From 1985 to 2000, China made every effort to improve its trade regime in order to enter the WTO. In the past 15 years, China's WTO membership has benefited the world tremendously. But from the 2000s onward, developed economies have been leading a new wave of trade promotion by promoting regional trade agreements. China realized later in its trade policy practice that RTAs are as important as the WTO is in today's global trade. It has also realized that Asia plays an irreplaceable role in China's trade.
China began its trade talks with ASEAN more than a decade ago and established the China-ASEAN Free Trade Area in November 2004. Today, China is the largest trading partner of most Asian nations, while trade among Asian nations is larger than bilateral trade between Asian nations and their non-Asian trading partners.
Still, China has an even bigger role to play in Asian trade liberalization. China needs to develop strategic commercial diplomacy addressing trade, investment and financial issues to support Asia's sustainable development.
China's transition to a new normal economy will not be easy. The fact is that some of China's former comparative trade advantages are weakening or diminishing. China's labor and environmental standards have become more of a concern, and the rule of law has become an obstacle for foreign investors. While foreign information technology giants tend to move their research and development centers out of China, more and more Chinese companies tend to invest overseas through mergers and acquisitions. The progress of China's further opening up is not only a matter of how much China can export or import, but also a matter of how well Chinese trade policy is designed to assure global confidence and the support of "new normal" economic statecraft.
The author is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/zhanglijuan.htm
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