The Trans-Pacific Partnership (TPP) is a multilateral free trade agreement that is dominated by the US and involves 12 countries  in negotiations. The TPP implies multiple strategic intentions.

Using the TPP as a platform, the US intends to establish an Asian-Pacific free trade area in accordance with its standards in order to expand its influence in East Asia and achieve the goal of dominating the region. Furthermore, through the TPP, the US can realize its technological and financial advantages and extend its access to Asian-Pacific markets, thereby increasing its total export volume and creating favorable conditions for economic recovery.
 

More importantly, the implementation of the TPP can help the US economically contain China. China’s economic discourse power in East Asia has been growing steadily with the establishment of the Asian Infrastructure Investment Bank and implementation of the “Belt and Road.” The US is therefore worried that East Asian countries will depend too much on China. It intends to realize the “pivot to Asia” strategy through the TPP while restraining China’s rise through coordination with Japan and ASEAN.
 

The influence of the TPP on Chinese trade can be seen in the trade contacts between the TPP members and China as well as TPP members’ role in China’s international trade. Compared to 2000, data from the United Nations Conference on Trade and Development (UNCTAD) in 2014 indicated that TPP members are still China’s important export markets. More than 40 percent of Chinese products are exported to these countries. However, China’s export dependence on TPP members is gradually declining, especially its dependence on the US and Japan. As a whole, even if China does not join the TPP in the near future, its exports will not be significantly impacted.

TPP countries account for around one-fifth of China’s import volume. In the near term, TPP members cannot easily eliminate tariffs. Meanwhile, their export shifting inwards to the TPP will have limited impact on China.
 

China is a large manufacturing country. Currently, its dependence on TPP countries is weakening in the export of finished products, while the proportion of technology-intensive products imported from TPP participants is on the decline. In light of this trend, it can be predicted that the TPP will have a limited influence on China’s trade.
 

Trade complementarity is likely to happen when a country’s demand for imports matches another country’s export advantages. The Trade Complementarity Index (TCI) can be used to measure the trade complementarity between China and TPP members. It indicates how import and export matches between countries. According to these calculations, Canada, the US and Mexico match China at a high degree in either import or export.
 

Taken together, trade between TPP members and China is increasingly complementary. This means TPP countries and China have the potential to expand trade and depend on each other. Therefore, China is still an indispensible trade partner of TPP members.   
 

In the context of trade and investment liberalization, many major countries are planning to design new international trade rules. As the US gets involved in the economic cooperation in East Asia by means of the TPP, China should also ponder how to react to US behaviors. China and emerging countries should not only put forward suggestions on new issues and high standards in trade negotiations to influence the trend of trade rules but also strengthen cooperation in trade and investment to push forward the free trade agreements among emerging economies and diminish the negative influence of new trade rules. China, the biggest emerging economy in the world, should take advantage of this opportunity to carry out cooperation and encourage other countries to gain a greater say in the formulation of trade rules.

 

Wang Xiaosong is from the National Academy of Development and Strategy at Renmin University of China.