Beijing, September 16 (Nikkei Asia): China has formally moved to join a Pacific trade pact involving Japan, Australia, Malaysia and other regional economies, the Chinese Ministry of Commerce said Thursday.
Beijing seeks to join the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), formerly called the Trans-Pacific Partnership. Chinese Commerce Minister Wang Wentao presented China’s application to New Zealand counterpart Damien O’Connor and discussed the upcoming process by telephone. Documents were submitted to support the application.
New Zealand acts as the depositary for the CPTPP, the government that handles various administrative tasks for the pact, such as requests to join.
In a speech to the Asia-Pacific Economic Cooperation summit via video in November 2020, Chinese President Xi Jinping said China “will favorably consider” joining the CPTPP.
China is also pushing to meet the Jan. 1 target for the start of the Regional Comprehensive Economic Partnership, the 15-member trade pact that includes Southeast Asia. This and its application to join CPTPP are part of an effort by Beijing to expand its economic influence on the global order.
But China’s bid to join the CPTPP faces trade friction with Australia and territorial disputes with Vietnam, another member. Consent from all 11 members is necessary to join.
It will also have to make domestic reforms to qualify. Practices such as subsidies to state-owned enterprises that distort competition are forbidden by the pact. Under Xi’s leadership, China has been strengthening the state sector, so negotiations to join could hit a stumbling block from the start.
China’s new data security law that took effect this month includes a ban on taking data out of the country, which could meet resistance from member countries.
The CPTPP has three principles that ensure transparency and fairness in the distribution of data, including a prohibition on forcing companies to disclose source code. In China, companies have been forced by local governments to disclose technology to obtain permits and licenses.
In addition, the CPTPP calls for an end to discrimination between foreign and domestic companies in government procurement. Beijing, on the other hand, has issued “buy-China” guidelines for government procurement for certain products. The road to membership will be difficult as China prioritizes its own interests.
Beijing’s application comes a day after the U.S., U.K. and Australia formed a new defense-focused grouping in the Indo-Pacific called AUKUS intended to counter China.
The CPTPP’s members also include Brunei, Canada, Chile, Mexico, New Zealand, Peru and Singapore. The U.S. had initially signed on to join the pact but withdrew its membership in 2017 under former President Donald Trump. The U.K. has begun negotiations to become a member.