During the annual CIIE (Chinese International Import Expo), Chinese communist leader Xi Jinping criticized protectionism and unilateralism on Thursday, Nov. 4, vowing to address concerns about China’s trade practices as the country seeks to join the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) trade bloc, South China Morning Post reported.
Xi emphasized China’s efforts to join the CPTPP and the Digital Economy Partnership Agreement, mentioning that “China supports the reform of the World Trade Organization in the right direction, the inclusive development of the multilateral trading system, and the legitimate rights and interests of the developing members.”
Indeed, China has applied for membership of the 11-member CPTPP, but the predominance of its state-owned enterprises and industrial subsidies are regarded as stumbling blocks for being approved.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), also known as TPP11 or TPP-11, is a trade agreement among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It evolved from the Trans-Pacific Partnership (TPP), which never entered into force due to the withdrawal of the United States. The eleven signatories have combined economies representing 13.4 percent of global gross domestic product, at approximately US$13.5 trillion, making the CPTPP one of the world’s largest free-trade areas by GDP, along with the United States–Mexico–Canada Agreement, the European Single Market, and the Regional Comprehensive Economic Partnership.
In a speech addressing the CIIE in Shanghai, Xi said China has “fully fulfilled the commitments it made when joining the WTO in 2001.”
He promised: “China will proactively and openly participate in negotiations on the digital economy, trade and the environment, industrial subsidies and state-owned companies, and defend multilateralism and the international rule-based system, defend the stability of global industrial and supply chain.”
An adviser to the Chinese government, who asked to stay unidentified, said Beijing was likely to keep some subsidies and its own rules on state firms, but would gradually approach the standard required to join the CPTPP.
“You should also consider other [countries’] requirements. For example … openness and transparency, and discipline in subsidies,” the adviser said.
“If these things are not explained, everyone thinks that they cannot compete with you. Many countries have subsidies. The question now is how to emphasise the discipline of regulating subsidies.”
The adviser also mentioned that many countries are worried about practices such as the competitive environment in China and the role of state-owned enterprises and subsidies.
At the eighth review of the nation’s trade policies at the World Trade Organization last month, the United States, European Union, Japan, Britain, Australia, and Canada all criticized China’s trade practices, blaming it for exercising “unfair trade practices” and inflicted “economic coercion.”
According to a report by the Congressional Report Service in Sept. 2020, concerns that the Chinese government “fails to protect and enforce intellectual property (IP) rights, and thus harms U.S. IP rights holders, have been one of the key issues in U.S.-China relations for decades.”
The report also said that “These concerns extend both to actions of China’s government itself and state-affiliated entities, as well as to actions of Chinese persons and entities not affiliated with the Chinese government.”
And added that “The primary issues raised by the U.S. government and U.S. businesses have evolved over time, from an earlier focus on the adequacy of Chinese domestic IP protection and enforcement (e.g., to counter piracy and counterfeiting), to more recent concerns about cyber intrusions and strategic acquisitions.”
However, the communist country announced it was committed to deepening reform and opening up its economy and many of the complaints and demands raised by Western nations about intellectual property rights and market access did not belong to the scope of the forum or trade overseen by the WTO.
Canada, one of the members of the CPTPP trade bloc, may not be buying the regime’s promises either. Chris Zhou, the spokesman for International Trade Minister Mary Ng, said that Canada is aware of China’s intentions to join the trade bloc, but says entry can only be permitted if it meets the “high standard” required by member countries according to Global News Canada.
The safe arrival of the two Canadians detained in China, Michael Kovrig and Michael Spavor, in apparent retaliation for the arrest of Huawei CFO Meng Wanzho, could give Canada more leeway to openly oppose China’s entry, trade analysts say.
Lawrence Herman, an international trade lawyer and a former Canadian diplomat, added that “Canada has no reason to do any favours for China. Their appalling behaviour toward Canada these past two years, including the bellicose and belligerent criticisms about Canada, provides every justification for a cool, if not frigid, Canadian response to China’s CPTPP application.”
When referring to the vows the communist regime did in order to join the WTO two decades ago, Guy Saint-Jacques, a former Canadian ambassador to China, said China have not lived up to its commitments.
He said, “Knowing how difficult it remains for foreign companies to operate in China compared to Chinese companies that want to operate over here, we have to base our approach a lot more on reciprocity.”
Internet users no longer trust the regime’s promises. Below the article of SCMP, the most upvoted comment from Syed M. account says: “China can just forget about CPTPP membership. No country in it’s right mind trusts China anymore when they use words like “gradually adjust to the required non-subsidization standards of the free trade agreement.” Afterall, China is still “gradually” adjusting to the WTO non-subsidization requirements more than 20 years later!”
Another favorite comment from an account named Bob L. says: “The CPTPP nations have learned dictator-for-life Xi can’t be trusted to keep his commitments, after broken promises such as WTO, UNCLOS, UK China joint declaration on Hong Kong, Australia free trade agreement, US China phase 1 trade deal, etc. His million Uighur forced labourers give China an unfair competitive advantage vis a vis the countries that honor UN human rights agreements. Add in state industrial subsidies, state-owned companies, predatory trade practices, rampant IP theft, forced technology transfers, massive hacking to capture industrial secrets, and it’s obvious that Xi’s China does not belong in CPTPP.”
The annual CIIE, which runs until next Wednesday, takes place amidst localised lockdowns and travel restrictions imposed by local authorities due to a surge in Covid-19 cases in China.
The Shanghai government has asked all foreign participants at the CIIE to go through a 21-day quarantine along with multiple tests for COVID-19. All domestic participants must have been fully vaccinated at least two weeks before entering the expo venue and provide a negative nucleic acid test certificate they received within two days before arriving in the city.
The import expo was launched in 2018 as an attempt to create new business opportunities after China got involved in a trade war with the US.