China's President Xi Jinping speaks during a press conference to close the Asia-Pacific Economic Cooperation (APEC) summit at the International Conference Center in the Yanqi Lake, north of Beijing, Tuesday, November 11, 2014. Photo: AP
Chinese President Xi Jinping said on Tuesday that the leaders of 21 Asia-Pacific Economic Cooperation (APEC) economies have unanimously agreed to the creation of China-backed Free Trade Area of the Asia-Pacific (FTAAP), a Pacific Rim free trade zone widely seen to rival US-led Trans-Pacific Partnership (TPP) which excludes the world's second-largest economy.
"We (leaders of 21 APEC nations) all deem that regional economic integration is the motive power for the Asia Pacific region to maintain robust and consistent growth. The APEC should continue to play a leading and coordinating role in promoting regional economic integration and working out an economic cooperation framework which is open, inclusive, well-balanced and mutually beneficial," Xi told a cluster of reporters in a brief news conference held after the 22nd annual APEC Economic Leaders' Meeting wrapped up on Tuesday afternoon.
In order to make the regional economic blueprint a reality, the Chinese president said that the leaders of APEC nations "have resolved to push forward the process towards the FTAAP and empowered the APEC to put into practice the roadmap for establishing the Asia-Pacific free trade area".
The resolution marks a historic step the regional organization is taking to further fulfill its vision of realizing trade liberalization and creating a uniform marketplace in the Asia Pacific region where the economic growth appears to have started to lose steam in recent years due to effects of the financial and debt crises and industrial restructuring.
"The determination will bring Asia-Pacific economic integration to a higher level and will benefit both sides of the Pacific Ocean," said Xi, adding that it "reflects the confidence and commitment of APEC nations to promote integration of the regional economy.
The FTAAP, which is firmly advocated by China, is widely considered as a competitive clone of the US-led TPP, which is used by the superpower and its regional allies to dampen China's growing economic clout in the Asia Pacific region.
Shen Danyang, spokesperson of the Commerce Ministry of China, said on November 8 that the Chinese government "does not think that the American government does not welcome China's participation into the TPP", adding that China "holds an open-minded attitude towards the free trade agreement", which is likely to add to China-US trade and economic rivalry in the Asia Pacific region.
Experts and media reports speculated that the reason why the US has been setting obstacles to any agreements on the FTAAP is based on the fear that the process of negotiations on the TPP, which embraces 11 other Pacific Rim countries including Japan, Canada, Australia, Mexico and Singapore, will be thwarted by China's aggressive effort to rope in APEC members to join the FTAAP.
At an APEC meeting, US President Barack Obama restated the US standpoint that his government's priority was still the smaller TPP, even though he spoke highly of China's role in eventually achieving the FTAAP.
"The many regional initiatives will contribute to the eventual realization. We see our engagement in the Trans-Pacific Partnership as a contribution towards that effort," said Obama.
"Undoubtedly, all parties unanimously agreed on the necessity of realizing free trade in the Asia Pacific region, but how it can be achieved in a written commitment remains questionable," Liu Chenyang, director of the APEC Study Center of Nankai University, told the sino-us.com.
However, the approval of the roadmap by APEC leaders makes a great milestone in promoting and realizing a more comprehensive free trade zone in the Asia Pacific region, especially at a time when the region is suffering from the economic and trade complexity caused by several fragmented free trade agreements that respectively adopt skimble-scamble standards and principles.
Promoting infrastructure development and connectivity
At the news conference held on Tuesday, Xi also conveyed the leaders' consensus that they will, in all aspects, speed up infrastructure construction and strengthen connectivity, which will serve as a new powerhouse of the economic growth in the Asia Pacific region.
"We (leaders of 21 APEC nations) have approved the APEC Connectivity Blueprint, which sets a long-term goal that the physical, institutional and people-to-people connectivity will be realized by 2025," said Xi.
APEC members will diversify the source of fundraising to support the infrastructure construction and expand channels for cooperation between public sectors and private companies to break the financing bottleneck, said Xi, adding that there are new initiatives to facilitate educational exchange, business travel and cross-border tourism.
Ahead of the APEC summit, China and 20 other countries signed an agreement to create the Beijing-sponsored Asian Infrastructure Investment Bank (AIIB), a multinational development bank, which will play an important role in financing infrastructure construction projects in the Asia Pacific region.
The push for establishing the AIIB, which is expected to go into operation next year, sends a message that China aspires to challenge Western-dominated financial organizations, like the World Bank.