Trans-Pacific Partnership and China’s Handling Thereof

Abstract

Purpose: In this study, we deal with the impact of the Trans-Pacific Partnership (TPP) agreement on China’s free-trade agreement (FTA) policy. We focus on the impact of “new sectors for negotiation,” including the state-owned enterprise clause that has been newly incorporated in the TPP. Composition/Logic: This paper is organized as follows: Section I clarifies the study objectives. Section II describes the outline of China’s FTA policy. Section III presents the impact of TPP and the handling thereof. Lastly, section IV presents the conclusion. Findings: According to the study results, when foreseeing the possibility of China participating in TPP in the future, the biggest obstacle is in the new fields and not in the existing fields, such as product tariff elimination. Especially, issues surrounding state-owned enterprises are directly connected to China’s economic structure reform, and China is seen as proceeding toward a reformation using TPP as a good opportunity. Meanwhile, the reformation of state-owned enterprises, which play a pivotal role in the Chinese economy, faces serious political resistance from the social class with vested rights. Thus, there exist many uncertainties in China’s future countermeasure processes regarding TPP. Originality/Value: The recent FTA policies helped China complete the formation of a network with neighboring countries; China is now in the stage of signing FTAs with advanced countries.. As a premise for this, strategic countermeasures are necessary for fields that are not yet included in the FTA that China has signed until now with developing countries, such as intellectual property rights, environment, and an agreement about labor, other than service trade and Investment Liberalization. The results of this study have great significance as they provide base data for the above-stated effective countermeasures.