China propelling regional trade with FTAs

Commerce has boomed with Australia, south korea and asean nations thanks to the agreements

During China's 12th Five-Year Plan (2011-15), as the global economy experienced a downturn, regional trade volume increased mainly thanks to free trade agreements.

In recent years, exports of major economies and emerging markets have slowed and China's trade and economic development have also faced downward pressure. However, China's trade growth overall has remained stable.

Last year, China's total trade in goods reached $4.3 trillion, an increase of 18.1 percentage points over 2011. It accounted for 11.3 percent of total world trade, the most in the world.

At the same time, China's "Going Global" strategy has entered a rapid development stage. From 2011 to 2014, China bucked the trend of falling foreign direct investment and last year, for the first time, it approached a balance in two-way investment. Its non-financial overseas direct investment reached $107.2 billion.

In 2010, China and the Association of Southeast Asian Nations launched their first free trade agreement. With the establishment of the FTA, China became ASEAN's largest trading partner and ASEAN became China's third-largest trading partner.

ASEAN has also become China's third largest source of foreign investment. By the end of last year, China and ASEAN's two-way investment had reached over $130 billion. The signing of an FTA with South Korea in June 2015 was a significant outcome of China's new round of opening up. Being neighbors with close humanistic and cultural traditions, the two countries complement one another in their trade and economies.

Last year, trade volume between China and South Korea reached $290.5 billion, an increase of 18.3 percent from 2011. China is now the South Korea's largest foreign trade partner and investment destination. According to the FTA, 90 percent of taxed goods can be traded freely, and the trade volume of these goods accounts for 85 percent of the total.

China's FTA with Australia is the highest in terms of trade and economy. Last year, bilateral trade between China and Australia amounted to $136.9 billion, a 17.4 percent increase over the amount in 2011. China is Australia's largest trade partner, largest source of imports and largest exports destination. The two countries started negotiations for the free trade agreement in 2005.

In the field of goods, 85 percent of both countries' export products became zero tariff immediately their FTA was launched. Australia is the first country with which China has made commitments covering the services trade. As the Sino-Australian FTA took effect, it further promoted bilateral investment, resource flows and personnel exchanges.

China aims to build a global high-level FTA network. So far, it has signed 14 FTAs with 22 countries and regions. Since 2011, China has jointly promoted the Regional Comprehensive Economic Partnership and a China-Japan-South Korea trilateral FTA.

The Trans-Pacific Partnership Agreement is the largest trade pact in the Asia-Pacific region at present. China has established FTAs with five out of the 12 TPP members while the rest are participating in the RCEP negotiations.

China is pushing for a quick realization of the RCEP and it has proposed an even more inclusive Free Trade Area of the Asia-Pacific.

China continues to comply with WTO rules and contribute to institution building and regional economic integration, and remains willing to work with all countries, including the United States, to promote greater regional cooperation.

The author is a researcher at the Ministry of Commerce's International Trade and Economic Cooperation Institute. The views do not necessarily reflect those of China Daily.