Economy Report - China
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1 2005/FTA-RTA/WKSP/020 Economy Report - China Submitted by: Ms. Zhao Jie & Mr. Han Yi, China Workshop on Identifying and Addressing Possible Impacts of RTAs/FTAs Development on APEC Developing Member Economies Hanoi, Viet Nam June 2005
2 RTAs/FTAs Around the World China s s FTA Strategy and Future Perspective Large in Numbers:307 (December 2004) Wide Coverage:Most of the WTO members July 12, 2005 Hanoi, Vietnam Great Influential:Accounting for over 50% of the world trade volume Ministry of Commerce, China RTAs/FTAs in APEC Proliferation in Asia Pacific Region in recent years Major RTAs/FTAs in APEC: AUSFTA, Australia- Thailand FTA, US-Chile FTA, Korea-Chile FTA Best Practice of RTAs/FTAs in APEC: a good reference for APEC members to conduct RTAs/FTAs on a voluntary basis. Why to Choose FTA? Against protectionism & Avoid trade barriers Multilateral trade negotiations blocked -- to find another way out Resist exclusiveness of RTA; Enjoy preferential treatment Promote economic diplomacy Necessities for China Tap overseas markets, expand export and attract more investment Respond to trade diversion, continue industrial restructuring Create open, fair and non-discriminatory trading environment Achieve Bogor Goals in 2020 Possibilities of China Sustained economic growth & rapid trade increase China opens wider to the outside world International competitiveness of industries enhanced Ever-expanding market scale---more attractive Many trade partners express the willingness
3 China s s Participation in FTA I China s s Participation in FTA II FTA Already Signed CEPA with Hong Kong CEPA with Macao Bangkok Agreement China-Pakistan Early Harvest Agreement China-ASEAN Agreement on Trade in Goods FTA under Negotiation China-New Zealand FTA China-Australia FTA China-Chile FTA China-GCC FTA FTA Negotiation Launched China-SACU FTA China s s Participation in FTA III Joint Feasibility Study China-India FTA China-Iceland FTA Academic Feasibility Study China-South Korea-Japan FTA China-South Korea FTA China - ASEAN FTA Framework agreement on comprehensive economic co-operation signed in 2002 Early harvest agreement implemented from January 1, 2004 Agreement on trade in goods & Agreement on Dispute Settlement Mechanism signed in Tariff reduction process will start from July 20, 2005 Trade in services and investment are still under negotiation China - New Zealand FTA New Zealand is the first developed FTA negotiation partner of China Joint feasibility study started from May 2004 Negotiation was launched on November 19, 2004 Three rounds of negotiation have been held China - Australia FTA Trade and Economic Framework signed in October 2003 Joint feasibility study commenced from February 2002, concluded in April 2005 The first round negotiation has been held in May 2005
4 China - Chile FTA Chile is the first FTA partner of China in Latin America Feasibility study started in April 2004 Negotiation was launched on November 18, 2004 by the leaders of both countries. The second round of negotiation is just underway CEPA with Hong Kong / Macao Coming into force: January 1, 2004 Elimination of tariffs on trade in goods: 273 items (on implementation) Further liberalization on trade in Services: 18 sectors Trade and investment facilitation: 7 sectors Note was signed in October 2004 on Expanding Trade in Goods and Services Bangkok Agreement PTA presided by ESCAP 6 Members: China India Republic of Korea Bangladesh Sri Lanka and Lao PDR. China formally acceded to the Bangkok Agreement in May, 2001 and introduced the Bangkok Agreement rates from January 1, The first substantive PTA China - Pakistan PTA Feasibility study started in October 2004 Early harvest agreement signed in April 2005 The first round of negotiation will start soon China - GCC FTA GCC: Gulf Corporation Council 6 Members: Saudi Arabia, United Arab Emirates, Kuwait, Oman, Qatar, Bahrain Negotiation Launched on July 6, 2004 Two meetings of Trade Negotiation Committee have been held. China Expects FTA will create a more favorable trade environment for the economic and trade cooperation Each partner will enjoy greater growth for trade in goods Comparative advantages of each partner in the service sector will be further developed The potential of investment of each partner will be further developed Mutual economic cooperation will be further consolidated
5 Challenges Faced As a new comer of FTA negotiation, China still face a dilemma: Lack of experience on how to tackle complex situation of trade in goods, service, investment and other chapters Short of number of qualified negotiators with sophisticated expertise Little funding to conduct capacity building activities in technical areas such as ROO, TBT and SPS Future Strategy of China s s FTA I Goals Improve external trade and economic environment, and tap new markets Facilitate all-round, coordinated and sustained national economic development Help to enhance international competitiveness Create an open, fair and non-discriminatory trading environment Future Strategy of China s s FTA II Principles: Active Steady Emphases Various in forms Conclusion I Conducting RTAs/FTAs is an irreversible trend around the world and within APEC. In this regards, it is of great importance for China to involve in FTA negotiation and enjoy prosperity with each trading partners. China has paving its way to conduct RTAs/FTAs and successfully signed several ones such as CEPA and China-ASEAN FTA. Conclusion II The End As a new comer of conducting RTAs/FTAs, China still need much assistance and capacity building of technique, human resources and capital support. Aimed at create an open, fair and nondiscriminatory trading environment, China will continue its efforts to conducting RTAs/FTAs.
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