Following the U.S.-led formation of the Trans-Pacific Partnership (TPP), a People’s Daily article discussed what impact the TPP might have on China’s industrial chain. Below is an excerpt from the article:
“The main objective of the U.S. in pushing the TPP is to extend the U.S.-led global trade rules. The TPP will mean an upgrading of the trade rules. Its main role is to reconstruct the global industrial chain through free trade negotiations. This is a core interest of the United States and it will have a possible adverse impact on China’s future position in the global industrial chain.”
“Tthe TPP’s impact on the global industrial chain may not appear in the short term. Because there are so many developed and developing countries that will participate, each having a production capacity of many products’ raw materials, accessories and core elements, their combination will lead to a change in the global industrial chain in 10 years or longer. By then some of China’s industries with competitive advantages (such as textiles) will inevitably suffer a greater impact.”
“At present, China’s manufacturing competitiveness comes mainly from its comprehensive, multi-level support capabilities. The United States’ effort to promote the TPP also serves to establish a comprehensive, multi-level supporting industrial chain. The TPP already includes some Asian economies. In the future it is likely that more Asian economies will participate. The existing industrial chain of China and Asian countries will be subject to its impact in varying degrees. The industry chain is very important for the economic integration of China with Asian countries.”
“The TPP will also affect China’s new ‘one belt, one road’ initiative. Compared with the TPP, ‘one belt, one road’ did not establish a free trade zone; nor does it have trade or investment rules. Even though it may have the effect of reshuffling the global industrial chain, due to the absence of a complete set of rules for the operation of raw materials, processing, exports, tariffs and markets for the entire chain, after their capacity of industrial production is improved, some countries may still consider joining TPP.
Source: People’s Daily, October 8, 2015