INSIDE GLOBAL ISSUES
Policy Brief No.201511
July 22, 1015
China playing central role in free trade
Zhang Lin
Beijing is pursuing a multilevel strategy using FTAs to help set new rules for the evolving global economy.
China is a latecomer in terms of reaching free trade agreements with other economies. But it has sped up in recent years with the signing of a few landmark FTAs with countries and regions including Switzerland, South Korea and Australia.
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The second stage, from 2005 to 2010, witnessed rapid development in the signing of FTAs. One important milestone during the period was that top policymakers started to view FTAs as a major component of China's opening-up strategy. It was in 2007 that the top leadership in China put forward the idea of implementing the strategy of FTAs and "strengthening bilateral and multilateral economic and trade cooperation". Hence, FTAs became the basis to further promote that goal. But it is noteworthy that the FTAs China signed during the first two periods were mostly with small, developing economies.
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First, it is the inevitable requirement for deepening and tightening the global value chain. The global value chain of production and trade model promotes regional economic and trade exchanges, and strengthens the degree of geopolitical relationships. The new international division of labor depends on highly efficient production and rationalization of market layout. China's recent FTAs with South Korea and Australia are a result of the formation of the intra Asia-Pacific regional value chain and the pattern of a deepening division of production. Economic and trade relations are increasingly close. This interwoven and interdependent situation is the result of the expansion of trade and investment among regional countries. It is also an important foundation of Asia-Pacific regional economic growth.
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