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China's future role in global trade


11:13, May 06, 2013

BEIJING, May 6 (Xinhua) -- China's import will total 10 trillion U.S. dollars in the next five years, about three times of Germany's gross domestic product (GDP). When Chinese President Xi Jinping announced this figure last month at the Boao Forum, foreign analysts knew its weight.

Against the backdrop of a rapidly changing global trade landscape, will China play a bigger role or be forced to retreat?

In recent years, China's share in global trade has been expanding. In 2012, China registered a total goods trade value of 3.87 trillion dollars, overtaking the United States to claim the top ranking in this regard.

However, some experts believe, on the wrangling battle field for the right to set down international trade rules in the 21st century, China faces huge challenges, and even the risk of being marginalized. The major pressure comes from the United States.

With the unsolved deadlock in the Doha Round and a weak World Trade Organization (WTO), the U.S., as the world's largest economy, is establishing a U.S.-dominated new 21st-century global trade pattern, backed by two pillars - the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).

The U.S. move is significant amid complex bilateral and multilateral links in international trade.

TTIP will bind together two large economies - the U.S. and the European Union, with their combined GDP and trade value accounting for half and one-third of the global total respectively.

Using their dominant positions in international trade, the U.S. and EU further push the formulation of new rules for global trade to cope with the rise of new economies, including China, while TPP is aimed at subjecting the stability of Asia-Pacific region to the new order, with security dragging trade against the backdrop of U.S. "Return to Asia" strategy.

The U.S. TPP strategy is clearly targeted at China, said Wang Yong, professor of the School of International Studies of Beijing University.

One and half a year ago, former Secretary of State Hillary Clinton proposed that the U.S. will update the order of priority for its foreign policies and lift economy above anti-terrorism in order to consolidate its leading strategic place.

Some scholars said that the" U.S. Diplomacy Rocket", which carried bombs in the past, will carry U.S. goods in the future.

With more and more countries announcing their decisions to join in TPP talks, China still stays out of it. Under such circumstances, China has to weigh between two options: to stay away from this U.S. initiative and set up its own version or wait to see the progress in TPP negotiations and find an opportune moment to extend its olive branches?

Some observers see that the US-promoted new trade rules set a pretty high bar in regard to intellectual properties, labor protection, transparency and privatization of national enterprises.

They say China, which could hardly bear such hefty prices to join the TPP, should adhere to existing mechanisms including the "ASEAN 10 Plus 3" and Shanghai Cooperation Organization to push forward trade talks.

Meanwhile, some other observers believe that exterior pressure has never slowed China's pace to move forward. On the contrary, as showed by China's success in three decades of reform and opening-up, the Asian nation is good at using such pressure to fuel progress at home.

The pessimistic voice crying wolf prior to China's WTO entry in 2001 is now remembered only as an interesting episode given the great benefits China has received after becoming a member of the global trade body.

Despite China's gaining of the global laurel in trade of goods, the country has come to a critical point to upgrade the "Made in China" label linked with low tech and high emission.

For China's foreign trade, a smooth transition to quality growth from the past quantity-featured glory holds key to its future boom and even for the sustainability of the overall Chinese economy.

In the months to come, major world economies will have to continue their battle against slow growth amid debt problems and the trend will remain that powers cooperate with and compete against each other at the same time.

With its huge market demand, vast growth prospect and the imagination surrounding its economic restructuring, China has quite a set of bargaining chips in the negotiations toward a reset of global trade rules.

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