Trans-Pacific Partnership: The View From China
By Alvin Cheng-Hin Lim

Trans-Pacific Partnership: The View From China

Mar. 01, 2016  |     |  3 comments

On October 5, 2015 in Atlanta, trade negotiators from the US and eleven of its allies in the Pacific Rim reached final agreement on the Trans-Pacific Partnership (TPP), sending the trade agreement back to their national legislatures for final ratification. Once ratified, the TPP will constitute a trade bloc with a share of 40% of the global economy. The TPP region spans North and Latin America (Canada, the US, Mexico, Chile, and Peru), Anglo-Oceania (Australia and New Zealand), and East and Southeast Asia (Japan, Brunei, Malaysia, Singapore, and Vietnam). The TPP is one of three major regional trade agreements (RTAs) that the US has been negotiating; the other two are the Transatlantic Trade and Investment Partnership (TTIP) with the European Union (EU), and the Trade in Services Agreement (TiSA), also with the EU and other key US allies. In the Asia-Pacific region, the TPP and a separate RTA, the Regional Comprehensive Economic Partnership (RCEP), are envisioned to eventually be superseded by the Free Trade Area of the Asia-Pacific (FTAAP), which is a long-term project of the Asia-Pacific Economic Cooperation (APEC) (Calmes, 2015; Hamanaka, 2014, pp. 15-16; Singh, 2015; “Beijing says,” 2015).

The TPP faces significant challenges to its final ratification. In the US, the TPP ratification process coincides with the 2016 general elections, and the TPP already faces opposition from leading Republican and Democratic presidential candidates like Donald Trump, Bernie Sanders and Hillary Clinton (Calmes, 2015; Goldstein, 2015). Opponents of the TPP in the US, who describe the agreement as “NAFTA on Steroids,” fear that further trade liberalization will lead to increased American job losses. Indeed, some economists have calculated that the increased Sino-US trade following China’s accession to the World Trade Organization led to the loss of over 2 million jobs in the US (Gosselin & Dorning, 2015; Ip, 2015; Smith, 2015). Civil society groups and non-governmental organizations like Médecins Sans Frontières (Doctors without Borders), Public Citizen, Oxfam, and the Electronic Frontier Foundation have voiced their opposition to the TPP based on its probable negative outcomes for issues including intellectual property rights and pharmaceutical drug prices. As the actual content of the TPP currently remains under the seal of secrecy, these feared outcomes are based on leaks of selected chapters from earlier drafts of the agreement. At present it remains unknown if these leaks accurately represent the final agreement (Culbert, 2015; Garrett, 2015; Malcolm, 2015; Sirota & Perez, 2015; Turkel, 2015). Even free market ideologues have voiced their opposition to the TPP on the basis that its rhetoric of free trade masks a reality of managed trade catering to special interests (Dorobăț, 2015).

China and the TPP

While China is not party to the TPP, it has welcomed the successful conclusion of the negotiations, noting that the TPP will accelerate the economic integration of the region and bring higher economic growth to the Asia-Pacific (“Beijing says,” 2015). While China has expressed interest in joining the TPP and TiSA, the US feels that China is not ready to meet the high regulatory standards expected of these trade regimes (Beattie, 2015; European Commission, 2014). However, econometric modelling predicts that the exclusion of China from the TPP will carry significant economic costs. While the model calculates that China will suffer a loss of 46 billion USD over the next decade due to its exclusion from the TPP, the TPP countries themselves will too suffer a serious opportunity cost of lower growth. The model calculates that the inclusion of China, South Korea and the ASEAN states of Indonesia, Thailand, and the Philippines in the TPP will generate a threefold increase in global economic growth, with China earning over 800 billion USD, and the US earning 330 billion USD — a fivefold increase in income — over the next decade. The significant opportunity costs of excluding China from the TPP should hence prompt the US to reconsider its present policy (Caro & Tang, 2015; Meltzer, 2015; “China Belongs,” 2015).

The exclusion of China and the EU from the TPP may prompt both to accelerate their existing efforts to reach a Sino-EU Free Trade Area (FTA). China is the EU’s largest trading partner after the US, and Sino-EU trade reached €467 billion in 2014. The Sino-EU FTA promises to significantly increase this volume of trade. The Bilateral Investment Treaty (BIT) which China and the EU are scheduled to complete negotiations for in 2016 could increase the scale of bilateral investment flows between China and the EU to match the scale of their trade, and also be a step towards the FTA (Chandran, 2015; Kynge & Oliver, 2015; Lim, 2015g; Zhang, Li, & Wu, 2015). Likewise, despite China’s exclusion from the US’ TPP and TiSA initiatives, China and the US remain keen on completing their BIT, especially since their bilateral investment flows at present do not match the scale of their trade (Lim, 2015i).

Econometric modelling predicts that the exclusion of China from the TPP will carry significant economic costs.

In the meantime, China is pushing for the early completion of the RCEP negotiations, which some see as a rival trade bloc to the TPP. While seven of the RCEP states are also party to the TPP (Australia, Brunei, Japan, Malaysia, New Zealand, Singapore, and Vietnam), RCEP also includes ASEAN states which are not party to the TPP (Cambodia, Indonesia, Laos, Myanmar, Thailand, and the Philippines) as well as the high-growth Asian economies of China, India, and South Korea. As some have noted, while it is true that the TPP countries carry a 40% share of global GDP and the RCEP countries only have a 29% share, in terms of GDP growth RCEP covers a faster growing region than the TPP. In terms of global trade, the TPP and RCEP capture approximately equivalent shares of global trade: 13% for TPP and 12% for RCEP. However, in terms of human population, with its inclusion of China and India, RCEP captures approximately half the world’s population, compared to the TPP’s capture of just 10% (Macauley, 2015). As China transitions to a consumer-based economy, and as India accelerates its economic development, their importance as global destinations for consumer goods and services will continue to strengthen. Indeed, some analysts note that China’s economy is probably larger than currently estimated because of the difficulties in fully accounting for activity in the services sector (Scott, 2015). Should both the TPP and RCEP be ratified and come into effect, the seven countries that belong to both trade blocs will enjoy the privileged status of being gateways between the TPP and RCEP, especially for the transit of high-value goods and services from the US and Japan into the key consumer markets of China and India. These gateways will allow manufacturers in the TPP region overcome the problem of the TPP’s exclusion of the massive markets of China and India (Kumar, 2015; See, 2015; “RCEP negotiations,” 2015; “TPP without China,” 2015). This future division of the Asia-Pacific into two trading blocs is expected to end when APEC’s FTAAP comes into effect and supersedes both the TPP and RCEP.

Apart from RCEP, China’s One Belt One Road (OBOR) initiatives will also help it develop its economic linkages outside of the TPP framework. OBOR consists of two distinct but interconnected development frameworks: the Silk Road Economic Belt (SREB) and the 21st Century Maritime Silk Road (MSR). In the countries along the SREB and MSR, China has signed a series of bilateral agreements for the construction of infrastructure megaprojects and other economic cooperation projects. In Pakistan, for instance, China will be developing the Arabian Sea port of Gwadar and will also construct the China-Pakistan Economic Corridor: a transportation, energy, and communications megaproject that promises to accelerate Pakistan’s economic development (Lim, 2015d). In Southeast Asia, China will be constructing medium- and high-speed rail lines in Laos, Thailand, and Indonesia, along with other infrastructure projects like energy and port development (Chung, 2015; Lim, 2015e; “China, Indonesia,” 2015; “Port Laem Chabang,” 2015; “Railway to connect,” 2015). In Central Asia and Eurasia, China’s SREB projects include energy pipelines and industrial parks (Lim, 2015b). In Latin America and the US — which could eventually come under the MSR framework — China will be constructing transportation megaprojects including a high-speed rail line linking Los Angeles with Las Vegas, and the proposed Transcontinental Railway linking the Atlantic and Pacific Oceans through Brazil and Peru (Lim, 2015f; Lim, 2015i). In Africa, China’s MSR projects include the development of a series of deepwater ports as well as a regional rail corridor connecting Kenya with Uganda, Burundi, and South Sudan (Lim, 2015a). These projects of practical cooperation not only manifest what Chinese President Xi Jinping has described as a “new type of international relations” that is based on win-win cooperation, they also function as one of China’s new engines of growth during this transitional period of China’s economic deceleration to a “new normal” of sustainable single-digit growth (Lim, 2015c; “Chinese president,” 2015). Indeed, the Pan-Asian Railway from Kunming to Singapore, one of the SREB’s Southeast Asian flagship megaprojects, is estimated to have the potential to add 375 billion USD in additional growth to China and its partner countries. Globally, even with China’s exclusion from the TPP framework, OBOR is projected to increase the volume of trade for China and its economic cooperation partners by up to 2.5 trillion USD over the next decade (Lehmacher & Padilla-Taylor, 2015; Guo, 2015).


This paper was originally published in Eurasia Review (Lim, 2015h). Since that time of writing, representatives from the 12 member states met to sign the TPP on February 4, 2016, formally concluding the treaty’s negotiation phase. The member states now have two years to ratify the treaty (Chia, 2016). The TPP could be derailed during this phase, especially if ratification fails in the US. As the Harvard economist Lawrence Summers has observed, all 4 of the leading presidential candidates in the 2016 US general elections Hilary Clinton, Bernie Sanders, Ted Cruz, and Donald Trump currently oppose the TPP, though of course this could change once the eventual winner assumes the presidency (Haass & Summers, 2016). In the meantime, the Chinese foreign ministry has expressed its disquiet with the Obama administration’s continued politicization of the TPP, especially its characterization of the TPP as an opportunity for the US rather than China to set the rules for global trade. As the foreign ministry spokesperson observed, China sees the setting of the rules of global trade as being the responsibility of the World Trade Organization rather than any single country (Aneja, 2016). As noted earlier, the TPP has encouraged China to accelerate the formation of its own global free trade network, in particular RCEP (Wu, 2016).


Aneja, A. (2016, February 7). Don’t politicise TPP, China tells U.S. The Hindu. Retrieved from

Beattie, V. (2015, June 4). Obama: China ‘put out feelers’ on joining TPP. VOA News. Retrieved from

Beijing says it welcomes TPP deal. (2015, October 7). China Daily. Retrieved from

Calmes, J. (2015, October 5). Trans-Pacific Partnership is reached, but faces scrutiny in Congress. New York Times. Retrieved from

Caro, F., and Tang, C. S. (2015, October 6). Leaving China out of the TPP is a terrible mistake. Fortune. Retrieved from

Chandran, N. (2015, October 8). China and Europe may team up to snub TPP. CNBC. Retrieved from

Chia, Y. M. (2016, February 5). TPP agreement signed, two years to ratification. Straits Times. Retrieved from

China belongs in the TPP. (2015, October 8). Bloomberg. Retrieved from

China, Indonesia launch joint venture for Jakarta-Bandung railway project. (2015, October 16). Xinhua.

Chinese president advocates new type of int’l relations. (2015, September 29). Xinhua. Retrieved from

Chung, N. (2015, September 20). Indonesia signs new deals with China after high-speed rail bid rejected. Want China Times. Retrieved from

Culbert, H. (2015, July 17). Why the TPP trade deal is a threat to public health. The Globe and Mail. Retrieved from

Dorobăț, C. E. (2015, October 6). The TPP and the Trade Rhetoric. Mises Institute. Retrieved from

European Commission. (2014, March 31). EU backs China joining talks on Trade in Services Agreement (TiSA). Retrieved from

Garrett, L. (2015, October 7). The drug tradeoffs in TPP deal. Council on Foreign Relations. Retrieved from

Goldstein, S. (2015, October 7). Hillary Clinton’s TPP opposition is latest split from Barack Obama. MarketWatch. Retrieved from

Gosselin, P., and Dorning, M. (2015, June 19). After doubts, economists find China kills U.S. factory jobs. Bloomberg. Retrieved from

Guo, Y. (2015, September 22). China’s railway projects in Thailand, Laos to start. Retrieved from

Haass, R. N. and Summers, L. H. (2016, January 25). Assessing global economic and political risks in 2016. Council on Foreign Relations. Retrieved from

Hamanaka, S. (2014, December). Trans-Pacific Partnership versus Comprehensive Economic Partnership: Control of membership and agenda eetting (ADB Working Paper Series on Regional Economic Integration No. 146). Manila: Office of Regional Economic Integration, Asian Development Bank.

Ip, G. (2015, June 15). To call trade deal ‘Nafta on steroids’ picks the wrong target. Wall Street Journal. Retrieved from

Kumar, K. (2015, October 17). RCEP trade talks in Korea gaining global attention as the emerging Asian equivalent of US-led TPP. International Business Times. Retrieved from

Kynge, J., and Oliver, C. (2015, June 29). Li Keqiang pushes for China-Europe investment treaty. Financial Times. Retrieved from

Lehmacher, W., and Padilla-Taylor, V. (2015, September 22). What can the New Silk Road do for global trade? Financial Times. Retrieved from

Lim, A. C. H. (2015a, March 15). Africa and China’s 21st Century Maritime Silk Road. The Asia-Pacific Journal, 13(10). Retrieved from

Lim, A. C. H. (2015b, May 14). China and the Eurasian Economic Union: Prospects for Silk Road Economic Belt. Eurasia Review. Retrieved from

Lim, A. C. H. (2015c, April 2). China’s transition to the ‘new normal’: Challenges and opportunities. Eurasia Review. Retrieved from

Lim, A. C. H. (2015d, May 7). ‘Iron Brothers’: Sino-Pakistani Relations and the China-Pakistan Economic Corridor. Eurasia Review. Retrieved from

Lim, A. C. H. (2015e, July 30). Laos and the Silk Road Economic Belt. Eurasia Review. Retrieved from

Lim, A. C. H. (2015f, May 28). Latin America and China’s ‘new normal.’ Eurasia Review. Retrieved from

Lim, A. C. H. (2015g, July 5). Recent developments in Sino-EU relations: 2014 and 2015 state visits by Xi Jinping and Li Keqiang. Eurasia Review. Retrieved from

Lim, A. C. H. (2015h, October 18). Trans-Pacific Partnership: The view from China. Eurasia Review. Retrieved from

Lim, A. C. H. (2015i, September 27). Xi Jinping’s 2015 state visit to US: The road from Sunnylands. Eurasia Review. Retrieved from

Macauley, R. (2015, October 8). Thought the TPP was a big deal? China’s rival free trade pact covers half the world’s population. Quartz. Retrieved from

Malcolm, J. (2015, October 9). The final leaked TPP text is all that we feared. Electronic Frontier Foundation. Retrieved from

Meltzer, J. P. (2015, September 21). Why China should join the Trans-Pacific Partnership. Brookings Institution. Retrieved from

Port Laem Chabang: China-Thailand trade gateway. (2015, September 18). CCTV News. Retrieved from

Railway to connect China, Thailand. (2015, September 20). Xinhua. Retrieved from

RCEP negotiations to be expedited for conclusion by year end. (2015, August 24). Xinhua. Retrieved from

Scott, M. (2015, October 16). China’s economy may be even bigger than you think. Bloomberg. Retrieved from

See, K. T. (2015, October 14). RCEP: The next trade deal you need to know about. CNBC. Retrieved from

Singh, H. V. (2015, October). TTIP: A bridge or gulf for multilateralizing plurilaterals? Cato Online Forum. Retrieved from

Sirota, D., and Perez, A. (2015, October 5). Trans-Pacific Partnership terms still secret, even as nations agree to trade deal. International Business Times. Retrieved from

Smith, N. (2015, October 7). Free trade is no longer a no-brainer. Bloomberg. Retrieved from

TPP without China not expected to make a splash. (2015, October 9). Shanghai Daily. Retrieved from

Turkel, D. (2015, October 10). A leaked document from the Trans-Pacific Partnership has some high-powered advocates worried. Business Insider. Retrieved from

Wu, W. (2016, February 4). First steps for Trans-Pacific Partnership, or Obama’s ‘Anything but China’ trade pact. South China Morning Post. Retrieved from

Zhang, X., Li, X., and Wu, Y. (2015, April 1). Treading carefully in the minefield of the EU-China investment treaty. Europe’s World. Retrieved from

3 Comments To This Article

  • marks

    on Feb 29, 2016 at 11:44 PM - Reply


    One of the most important aspects of the TPP agreement is the controversial investor-state dispute settlement (ISDS) mechanism, which grants an investor the right to use dispute settlement proceedings against a foreign government. Higher demand of business environment will also be enforced by the agreement through higher environmental and labor standards. This could affect the developing countries in TPP including Malaysia and Vietnam. Local businesses should try to raise their profile in the international level and prepare for a level playing field, where global standards, business verification and transparency are often insisted upon.

  • AncicDuh

    on Sep 04, 2017 at 01:39 AM - Reply


    Спасибо за инфу[url=]![/url]

  • AlenaBox

    on Dec 12, 2017 at 02:27 AM - Reply


    <a href=>Суспензия хлореллы для кур несушек и как её скармливать</a>

Leave a Reply

Your email address will not be published. Required fields are marked *