China’s interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) deserves serious consideration. Membership of this ambitious 11-nation free trade agreement that took effect in 2019, two years after absorbing the shock exit of the United States, can make China a more reliable and attractive trade partner. It can also ease the Sino-American trade war and provide fresh motivation for the Biden administration to renew its ties with the region. At last year’s Asia-Pacific Economic Cooperation summit, President Xi Jinping stated his keenness to join the deal originally conceived to exclude China and preserve the United States’ role as the shaper of rules of trade amid major geopolitical and technological disruptions. Reports last week suggest Chinese officials are pursuing entry, and holding consultations with CPTPP members.
The Chinese move appears to be guided by Mr Xi’s search for new economic drivers to replace the nation’s diminishing competitive advantage from low labour costs. The benefits for China are manifold. The Washington DC-based Peterson Institute for International Economics says joining the pact could provide a boost of nearly US$300 billion (S$399 billion) to China’s national income by 2030. Its exports, as well as imports, would jump by more than US$600 billion in the same time period. For the 11 other signatories that include Singapore, Malaysia, Japan, Australia and Canada, the projected incremental income gains from China’s entry would be US$485 billion by 2030.