MNI INTERVIEW: RCEP To Propel China Exports-Ex Trade Deputy

The world's biggest trade deal will help China's foreign trade grow by double-digits in the next five to 10 years and allow the country to rival Japan at the top of Asian supply chains by 2040, Wei Jianguo, former vice minister of commerce, told MNI.

The recently-signed Regional Comprehensive Economic Partnership should power exports of auto parts, mobile phone accessories and medical supplies, Wei, now vice chairman of the China Center for International Economic Exchange, said in an interview. It will also improve Chinese factories' access to intermediate goods from Japan and South Korea, as well as Australian minerals and farm products from ASEAN countries, he said.

While RCEP, grouping about one-third of global GDP, population and trade, should be implemented relatively soon, Wei saw greater challenges for China's potential membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

China has expressed interest in joining CPTPP, which replaced the Trans-Pacific Partnership after President Donald Trump withdrew the U.S., but Wei pointed out that this would require tough measures. These include reforms of state-owned enterprises, reductions in industrial subsidies, improved protection of intellectual property, the removal of limits on foreign share ownership and fewer restrictions on foreign investment.

EU TREATY

The European Union, though, is likely to speed negotiations for a bilateral investment treaty with China, he said.

"The EU is anxious about its declining consumer market as the impact of the pandemic may linger into next year," said Wei. China is likely to surpass the U.S. to become the biggest retail market in the world this year, he said, adding that domestic retail sales should total CNY45-46 trillion by year-end, exceeding 2019's CNY41 trillion.

"The Chinese market will account for 40% of the global market in future," said Wei, who served as vice commerce minister from 2001-2008.

Wei expects incoming U.S. President Joe Biden to take a pragmatic approach to its relationship with China. Beijing has consolidated its position in regional trade, while the U.S. is now part of neither RCEP nor CPTPP, he noted.