.
In the aftermath of the global financial crisis of 2008, the United States has taken the lead in several key initiatives to strengthen the international economic system. Washington has worked to expand global trade through multilateral free trade agreements, such as the Trans-Pacific Strategic Economic Partnership Agreement (TPP) currently under consideration by Congress, in an effort to spur recovery and promote growth. Although some Americans are wary of trade liberalization for fear that processes of globalization have rendered the American economy increasingly vulnerable, protectionist policies will only serve to do more harm than good. Particularly, discrimination against perceived rivals to the U.S. economic hegemony—most notably China—will not guarantee a preservation of American influence over global economic issues. Rather, rejecting China from initiatives to improve the health of the global economy will present a missed opportunity for the United States to continue in its position of dominance. As the world’s fastest-growing economy, China will be difficult—if not impossible—to ignore in efforts to expand global trade. Encouraging Beijing’s participation in multilateral FTAs such as the TPP will promote both domestic and global economic growth, while also ensuring U.S. economic supremacy. As of now, China has stood on the sidelines of TPP negotiations, preferring to ignore TPP in favor of advocating the Free Trade Area of the Asia Pacific (FTAAP). Beijing has not been particularly inclined to participate in TPP, especially because the terms presently on the table seem unfavorable to a self-proclaimed developing nation such as China. Furthermore, Chinese policy-makers and intellectuals are concerned that the TPP may be an attempt to undermine Beijing’s influence in the Asia-Pacific region, and understandably so. In recent remarks, President Barack Obama insisted that “we have to make sure America writes the rules of the global economy. And we should do it today, while our economy is in the position of global strength.  Because if we don’t write the rules for trade around the world—guess what—China will.” Consistent with the belief that Washington hopes to contain China’s rise, Beijing remains wary of America’s intentions in pursuing the TPP. The Obama Administration should be careful not to marginalize China in this way, not least because FTAAP provides an alternative path to free trade for the whole of the Asia-Pacific region. Excluding Beijing from regional trade agreements will only serve to escalate tensions and exacerbate balance-of-power politics. Facing a self-help world, in which the winner-takes-all, China can be expected to play the same game, but by its own rules. And considering China’s burgeoning capabilities, such an approach could potentially jeopardize America’s current role in the global economy. The “China Threat” could become a self-fulfilling prophecy: if Beijing continues to be portrayed as a rival, it is more likely to become one. So far, China’s economy—ranking number two in its share of global GDP—may compete with that of the United States in purely numerical terms, but has fallen short of the extent of influence projected by America since the end of WWII.  Until now, the Communist Party of China has been largely dependent upon existing international trade agreements to achieve growth. Yet, China is not the same developing country that it was 15 years ago. Since joining the World Trade Organization in 2001, China’s economy has become more robust and increasingly resilient. The Chinese government is beginning to realize the importance of its contributions to the WTO, and the immense role that it can play in other similar institutions. China is now capable of building its own sphere of economic influence, and is attempting to do so through recent initiatives such as the New Silk Road and the Asia Infrastructure Investment Bank (AIIB). Beijing is no longer limited to economic growth that is altogether dependent upon a Western framework. Although some Chinese officials have expressed their favor for the economic possibilities promised by the TPP, denied the opportunity to partake in negotiations, the CCP may abandon seemingly futile attempts to join an exclusionary global economic system, at minimum the regional FTAAP.  Moreover, the CCP recognizes that high levels of growth must be sustained in order for the regime to maintain legitimacy in the eyes of its domestic audience. High internal pressures may provide a strong incentive for the Chinese government to draw upon its own capacity to achieve the growth it needs. Washington must consider the strategic benefits of accommodating China, which will certainly outweigh the costs of excluding Beijing from the TPP. Better to include China now, at a time in which the payoffs of participation may still appear favorable to the CCP, than to wait until Beijing develops economic institutions intended only to serve its own national interests. Proponents of the “China Threat” theory have pointed to Beijing’s recent bilateral trade agreements with neighbors such as Australia and South Korea to justify a pivot to Asia that aims to undermine China’s growing influence, rather than one that will take advantage of China’s expanding economic power capabilities. However, the United States should not attempt to directly encroach on Beijing’s sphere of influence. Although trade agreements such as the TPP may appear appealing as means to increase leverage over China through strengthened partnerships and improved relations with other countries in the Asia-Pacific region, such an approach would actually be counterintuitive, providing further reason for uncooperative and confrontational behavior on China’s part. Threatened by shifting economic alliances in the region, and increasingly excluded from opportunities to partake in multilateral forums, the CCP will be more inclined to reject the status quo. Instead, Washington should focus on helping Beijing adapt to the existing global economic system so that China is not forced to create institutions that do not align with those that already exist. The nature of an increasingly globalized world has fundamentally changed the way that a state may exert its power capabilities. We need to look past the tenets of traditional security dynamics. We can stop worrying about whether or not the United States has lost ground as an economic hegemon, or if China will be the state to fill the vacuum left in the wake of America’s decline. The United States can feasibly maintain its position of economic supremacy by modifying its realist approach towards reaching its economic and strategic goals. Washington can encourage Beijing to cooperate, and take all that it can from the resulting arrangement. Engaging an otherwise belligerent non-participant will at the very least enable the United States to continue exerting substantial influence over the global economy. The alternative is to isolate that same country, and lose out on what we must. Allowing China to act alone will likely restrict U.S. influence and also hamper opportunities for global economic progress. Integrated within the current system, China is less likely to challenge America’s global economic dominance. Regional trade pacts such as the TPP must remain open to Beijing if American leaders hope to mitigate a rising China, rather than provoke it. The Obama Administration should be especially mindful that Beijing is not discouraged by the perceivably high standards that the TPP may impose. In the coming months, it will be absolutely critical to reassure Beijing that the terms of membership are not unachievable, nor are they a superfluous measure deliberately designed to dissuade China from joining the dialogue. The United States can pull from the strength of its soft power resources to draw China towards cooperation. Washington should demonstrate the appeal of diplomatic negotiation to Beijing, by making clear that the terms of the TPP will be beneficial for all involved. The United States needs to show how the strict labor, environmental, and intellectual property protection standards imposed are not intended to pointedly exclude Beijing. According to the Brookings Institution, it is important that “China...see the new trade agenda a deal not unlike its accession to the WTO: while hefty commitments are to be expected, the accompanying domestic reforms will pay off handsomely in terms of improved economic performance”. Otherwise, how can we expect China to even begin making concessions related to trade and open markets if Washington will not even afford Beijing that opportunity? Forums such as the U.S.-China Strategic and Economic Dialogue, which recently convened for its annual meeting this June, are meant to foster economic cooperation, but have only managed to draw very low expectations for improvements in relations between the two countries. The TPP is a great place to begin demonstrating to Beijing that the United States is steadfast and honest in its pursuit of a stronger global economy. Convinced of America’s commitment towards mutual benefit, China may be more inclined to comply with a liberalized approach to expanding international trade, which in turn may eventually pave the way for real progress in terms of dialogue. Encouraging Beijing’s participation in multilateral economic institutions, under Washington’s close guidance and possible scrutiny, the United States may hope to gradually alter China’s world outlook. Isolating China, on the other hand, may drive Beijing to establish its own economic forums created only to suit the CCP’s interests. The TPP has the potential to further the economic interests of both states, while also serving to benefit the global economy as a whole. Pulling China into, rather than alienating it from, the current global economic system will also allow the United States to more effectively champion its national values of liberalization and international trade.   Short Bio: I am currently pursuing a degree in International Relations, with a minor in Economics, through the BA International Honors program between the College of William & Mary and the University of St Andrews. Studying both in the U.S. and abroad in the UK has allowed me to gain unique perspectives on international issues and foreign affairs. As a Senior Copy Editor for The Monitor Journal of International Studies at W&M, and an Analyst for The St Andrews Foreign Affairs Review, I have had the opportunity to hone my writing, editing, research, and analytical skills. My academic interests focus principally on East Asian security dynamics. I conducted research related to this region while interning for the Project on International Peace and Security (PIPS), an undergraduate think-tank at W&M. I have also worked for AidData, an organization working to improve accessibility and transparency of development finance data. In the future, I hope to contribute to the policy-making community with an organization that aims to enhance American strategy towards other nations. Prior clips may be found at: http://foreignaffairsreview.co.uk/author/amanda-blair/  

The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.

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China, Trade, and the Trans-Pacific Partnership: Is America’s Economy Bound to Lead?

Great Hall of the People with Forbidden City in Fo
November 23, 2015

In the aftermath of the global financial crisis of 2008, the United States has taken the lead in several key initiatives to strengthen the international economic system. Washington has worked to expand global trade through multilateral free trade agreements, such as the Trans-Pacific Strategic Economic Partnership Agreement (TPP) currently under consideration by Congress, in an effort to spur recovery and promote growth. Although some Americans are wary of trade liberalization for fear that processes of globalization have rendered the American economy increasingly vulnerable, protectionist policies will only serve to do more harm than good. Particularly, discrimination against perceived rivals to the U.S. economic hegemony—most notably China—will not guarantee a preservation of American influence over global economic issues. Rather, rejecting China from initiatives to improve the health of the global economy will present a missed opportunity for the United States to continue in its position of dominance. As the world’s fastest-growing economy, China will be difficult—if not impossible—to ignore in efforts to expand global trade. Encouraging Beijing’s participation in multilateral FTAs such as the TPP will promote both domestic and global economic growth, while also ensuring U.S. economic supremacy. As of now, China has stood on the sidelines of TPP negotiations, preferring to ignore TPP in favor of advocating the Free Trade Area of the Asia Pacific (FTAAP). Beijing has not been particularly inclined to participate in TPP, especially because the terms presently on the table seem unfavorable to a self-proclaimed developing nation such as China. Furthermore, Chinese policy-makers and intellectuals are concerned that the TPP may be an attempt to undermine Beijing’s influence in the Asia-Pacific region, and understandably so. In recent remarks, President Barack Obama insisted that “we have to make sure America writes the rules of the global economy. And we should do it today, while our economy is in the position of global strength.  Because if we don’t write the rules for trade around the world—guess what—China will.” Consistent with the belief that Washington hopes to contain China’s rise, Beijing remains wary of America’s intentions in pursuing the TPP. The Obama Administration should be careful not to marginalize China in this way, not least because FTAAP provides an alternative path to free trade for the whole of the Asia-Pacific region. Excluding Beijing from regional trade agreements will only serve to escalate tensions and exacerbate balance-of-power politics. Facing a self-help world, in which the winner-takes-all, China can be expected to play the same game, but by its own rules. And considering China’s burgeoning capabilities, such an approach could potentially jeopardize America’s current role in the global economy. The “China Threat” could become a self-fulfilling prophecy: if Beijing continues to be portrayed as a rival, it is more likely to become one. So far, China’s economy—ranking number two in its share of global GDP—may compete with that of the United States in purely numerical terms, but has fallen short of the extent of influence projected by America since the end of WWII.  Until now, the Communist Party of China has been largely dependent upon existing international trade agreements to achieve growth. Yet, China is not the same developing country that it was 15 years ago. Since joining the World Trade Organization in 2001, China’s economy has become more robust and increasingly resilient. The Chinese government is beginning to realize the importance of its contributions to the WTO, and the immense role that it can play in other similar institutions. China is now capable of building its own sphere of economic influence, and is attempting to do so through recent initiatives such as the New Silk Road and the Asia Infrastructure Investment Bank (AIIB). Beijing is no longer limited to economic growth that is altogether dependent upon a Western framework. Although some Chinese officials have expressed their favor for the economic possibilities promised by the TPP, denied the opportunity to partake in negotiations, the CCP may abandon seemingly futile attempts to join an exclusionary global economic system, at minimum the regional FTAAP.  Moreover, the CCP recognizes that high levels of growth must be sustained in order for the regime to maintain legitimacy in the eyes of its domestic audience. High internal pressures may provide a strong incentive for the Chinese government to draw upon its own capacity to achieve the growth it needs. Washington must consider the strategic benefits of accommodating China, which will certainly outweigh the costs of excluding Beijing from the TPP. Better to include China now, at a time in which the payoffs of participation may still appear favorable to the CCP, than to wait until Beijing develops economic institutions intended only to serve its own national interests. Proponents of the “China Threat” theory have pointed to Beijing’s recent bilateral trade agreements with neighbors such as Australia and South Korea to justify a pivot to Asia that aims to undermine China’s growing influence, rather than one that will take advantage of China’s expanding economic power capabilities. However, the United States should not attempt to directly encroach on Beijing’s sphere of influence. Although trade agreements such as the TPP may appear appealing as means to increase leverage over China through strengthened partnerships and improved relations with other countries in the Asia-Pacific region, such an approach would actually be counterintuitive, providing further reason for uncooperative and confrontational behavior on China’s part. Threatened by shifting economic alliances in the region, and increasingly excluded from opportunities to partake in multilateral forums, the CCP will be more inclined to reject the status quo. Instead, Washington should focus on helping Beijing adapt to the existing global economic system so that China is not forced to create institutions that do not align with those that already exist. The nature of an increasingly globalized world has fundamentally changed the way that a state may exert its power capabilities. We need to look past the tenets of traditional security dynamics. We can stop worrying about whether or not the United States has lost ground as an economic hegemon, or if China will be the state to fill the vacuum left in the wake of America’s decline. The United States can feasibly maintain its position of economic supremacy by modifying its realist approach towards reaching its economic and strategic goals. Washington can encourage Beijing to cooperate, and take all that it can from the resulting arrangement. Engaging an otherwise belligerent non-participant will at the very least enable the United States to continue exerting substantial influence over the global economy. The alternative is to isolate that same country, and lose out on what we must. Allowing China to act alone will likely restrict U.S. influence and also hamper opportunities for global economic progress. Integrated within the current system, China is less likely to challenge America’s global economic dominance. Regional trade pacts such as the TPP must remain open to Beijing if American leaders hope to mitigate a rising China, rather than provoke it. The Obama Administration should be especially mindful that Beijing is not discouraged by the perceivably high standards that the TPP may impose. In the coming months, it will be absolutely critical to reassure Beijing that the terms of membership are not unachievable, nor are they a superfluous measure deliberately designed to dissuade China from joining the dialogue. The United States can pull from the strength of its soft power resources to draw China towards cooperation. Washington should demonstrate the appeal of diplomatic negotiation to Beijing, by making clear that the terms of the TPP will be beneficial for all involved. The United States needs to show how the strict labor, environmental, and intellectual property protection standards imposed are not intended to pointedly exclude Beijing. According to the Brookings Institution, it is important that “China...see the new trade agenda a deal not unlike its accession to the WTO: while hefty commitments are to be expected, the accompanying domestic reforms will pay off handsomely in terms of improved economic performance”. Otherwise, how can we expect China to even begin making concessions related to trade and open markets if Washington will not even afford Beijing that opportunity? Forums such as the U.S.-China Strategic and Economic Dialogue, which recently convened for its annual meeting this June, are meant to foster economic cooperation, but have only managed to draw very low expectations for improvements in relations between the two countries. The TPP is a great place to begin demonstrating to Beijing that the United States is steadfast and honest in its pursuit of a stronger global economy. Convinced of America’s commitment towards mutual benefit, China may be more inclined to comply with a liberalized approach to expanding international trade, which in turn may eventually pave the way for real progress in terms of dialogue. Encouraging Beijing’s participation in multilateral economic institutions, under Washington’s close guidance and possible scrutiny, the United States may hope to gradually alter China’s world outlook. Isolating China, on the other hand, may drive Beijing to establish its own economic forums created only to suit the CCP’s interests. The TPP has the potential to further the economic interests of both states, while also serving to benefit the global economy as a whole. Pulling China into, rather than alienating it from, the current global economic system will also allow the United States to more effectively champion its national values of liberalization and international trade.   Short Bio: I am currently pursuing a degree in International Relations, with a minor in Economics, through the BA International Honors program between the College of William & Mary and the University of St Andrews. Studying both in the U.S. and abroad in the UK has allowed me to gain unique perspectives on international issues and foreign affairs. As a Senior Copy Editor for The Monitor Journal of International Studies at W&M, and an Analyst for The St Andrews Foreign Affairs Review, I have had the opportunity to hone my writing, editing, research, and analytical skills. My academic interests focus principally on East Asian security dynamics. I conducted research related to this region while interning for the Project on International Peace and Security (PIPS), an undergraduate think-tank at W&M. I have also worked for AidData, an organization working to improve accessibility and transparency of development finance data. In the future, I hope to contribute to the policy-making community with an organization that aims to enhance American strategy towards other nations. Prior clips may be found at: http://foreignaffairsreview.co.uk/author/amanda-blair/  

The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.