context: As RCEP negotiations drag on and trade war continues, joining the Japan-led CPTPP could be an effective hedging strategy for China and benefit other members, but negotiation over China’s entry might be tough given the treaty’s high standards.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into force on 31 Dec 2018, and member countries will meet on 19 Jan 2019 to discuss expansion of membership. As the first trans-pacific trade treaty, this presents both opportunity and challenge for China, says Li Chunding 李春顶 China Agricultural University International Economic Research Institute director.

In terms of challenges, the CPTPP might

  • weigh on China’s trade and growth if it does not join
  • discourage some members from seeking other trade agreements in the region, such as RCEP
  • compete with China’s global trade initiatives

In terms of opportunities, it will

  • promote regional trade liberalisation and bring positive spillovers to China
  • remain open for China’s accession
  • set precedent for a plurilateral trade system

Li forecasts that under current conditions, CPTPP will increase China’s social welfare by 0.105 percent, GDP by 0.249 percent, manufacturing employment by 0.378 percent, exports by 0.092 percent and imports by 1.141 percent, but the benefits would be greater if China joins the treaty.

In this case, Li says China should consider joining CPTPP as it will both contribute to short-term economic benefits and the long-term goal of opening up. CPTPP standards are more relaxed than the original TPP, making it easier for China to join.

Gao Feng 高峰 MofCOM spokesperson said in a recent press conference that CPTPP’s aim to promote free trade is in line with China’s stance. China believes multilateral and regional free trade arrangements are mutually beneficial, says Gao.