TPP Won’t Hinder Chinese Economy

On October 5， trade ministers from the United States and 11 other countries announced the conclusion of negotiations for the Trans-Pacific Partnership （TPP） free trade agreement （FTA） in Atlanta， Georgia. Projected to account for 40 percent of global GDP and one third of global trade volume， the TPP will be the most ambitious FTA in history once established.

Many believe the ambitious deal will adversely impact Chinas foreign trade and ability to attract foreign investment. For instance， its exports of textile and clothes to North America will face stiff competition from TPP member countries such as Viet Nam and Malaysia， which could be favored by international buyers owing to the TPPs tax exemption policies.

However， its safe to say that any negative influence the TPP may have on the Chinese economy will be limited.

As a matter of restructuring， Chinas model of growth is shifting from being primarily export-oriented to becoming consumption-driven. Low-value-added exports are no longer Chinas main pursuit and the country neednt be concerned with currying especial favor among foreign investors. As long as China upholds its opening-up policy， its huge market will continue to be a draw for overseas equity. After all， the global economy is not a “fixed pie，” and there is enough capital in quest of productive use circulating around the international market to go round.

Trade between China and TPP members has become an important component of the international market and will not be compromised by a single trade deal. At present， China and the United States are increasingly interdependent economically， with more and more American companies expanding cooperation with Chinese counterparts. In addition， five of the 12 TPP members have already reached FTAs with China， with seven also participating in negotiations for the Regional Comprehensive Economic Partnership， an ASEAN-centered proposal for a regional free trade zone incorporating China.

Meanwhile， China is advancing regional cooperation programs such as the Silk Road Economic Belt and 21st-Century Maritime Silk Road Initiative and the Asian Infrastructure Investment Bank， which will provide enormous opportunities for Chinese firms.

Moreover， during the TPP negotiations， the United States contradicted itself， on the one hand branding the deal an open initiative， while on the other， excluding China from the table for failing to meet arbitrary standards， despite the presence of members with levels of marketization lower than China. The TPP as it stands is flawed by placing political considerations over shared economic interests.