Zhou Shixin
Associate Research Fellow
Center for Asia-Pacific Studies
Institute for Foreign Policy Studies
Related Articles Commentary Paper SIIS Report
Dec 06 2016
Balancing Leadership in Regional Cooperation and China’s Policy Options
By Zhou Shixin
TPP   RCEP   Regional   Integration   Leadership   Balancing  
leadership is not the title and honor that anyone is privileged to call itself but is defined and recognized by others voluntarily. In international relations, leadership is often mismatched as hegemony in theory and practice. Leadership balancing is entangled in various initiatives of Asia-Pacific regional integration, especially in TPP and RCEP in the framework of FTAAP. The US-Led TPP and ASEAN-Led RCEP are competing members and rules for the future FTA regulations. Other bilateral and minilateral FTAs, especially China-ASEAN FTAs of updated edition will be more prevailing in contribution to social and economic welfare in the future. ASEAN has been trying hard to keep its centrality in the East Asian regional integration amid many challenges from internal and external coordination. ASEAN’s credibility as the regional leader depends on its community implementation by the end of 2015, its neutrality in regional and international affairs, its contribution to completing the negotiation of RCEP, and continuous supports of public goods from other external countries. China is waiting for the proper timing to participate the TPP while playing a constructive and responsible role in completing negotiation and implementation of RCEP, in order to realize FTAAP conducive to multiple interests of broader stakeholders.
In the past few years, with the rise of a number of emerging powers, the international system has transformed into a new configuration. The development gap between the emerging power and existing powers has been narrowed. International regimes have also been launching comprehensive and deep reforms so that they can accommodate the new situation. The norms and paradigms of global governance of non-traditional security issues and economic issues have developed more new features and trends to meet the needs of emerging powers, as well as the evolving relations between emerging and advanced economies. The great powers have been played critical role in the process of this transformation. They reorganized G20 and empowered it with new missions of global economic governance by the meetings of heads of most prominent great powers and most popular international or regional organizations. However, numerous medium and small countries also play very fundamental role in promoting the evolution of international society. They can be more important if they unite as a whole to advance some specific topics although they’re comparatively weaker than great powers individually.

With the everlasting effects of international economic and financial crisis in recent years, the global structure of economic development has undergone tremendous changes. There are more talks about the various development models in the world. Washington Consensus is challenged by the so-called Beijing Consensus which is thought to be the representative economic patterns of developing countries even though its contents are not clarified and its trend is still uncertain. At the same time, East Asia has become one of the strongest engines in boosting global economic development, when some of the regional countries, especially China, Korea, Indonesia and India, have developed very fast in production, trade, investment and finance which promoted growth of the overall strength of these countries. The regional integration with the centrality of ASEAN has become the driving force of this phenomenon, and Regional Comprehensive Economic Partnership(RCEP)will be the next attractive initiative which is doomed to enhance the economic development and cooperation of relevant countries. On the other hand, the US is driving the Trans-Pacific Partnership(TPP)negotiation process in the framework of Rebalancing Strategy. The parallel processes of negotiating RCEP and TPP now are competing and supplementing with each other in the building Free Trade Areas in Asia Pacific (FTAAP).

Contending Concept of Leadership in International Relations
Leadership is not a hegemonic or dominating force, but a coordinated or shaping force. The former must have the power of keeping offshore checks and balances, but the latter does not necessarily need to have such kind of strength. Hegemony is stronger in coercive nature. The hegemonic country tries to keep the order conducive to the interests of itself and its allies. At the same time, the allies have to commit to safeguard the order and abide by the rules and norms made by the hegemonic country which at the same time provides the public goods to meet the needs of its allies which try to bandwagon its overwhelming security and development dynamics. Commitments of collective security and economic development are usually intertwined with each other as their national interests are much interdependent and mutually entangled amid the interactions in the era of globalization.

The rights and honor of the leadership are usually conferred by members of the group. In this sense, hegemony is more than a leader in international relations with its dominance to its allies and others which recognize its authority in the existing order. However, it’s not always necessary for a leader to have so powerful strength even though strength is also as important factor for a country to become a leader. However, the attraction and glamour are usually the quality of a leader who is recognized as the example or neutral coordinator in cooperation with many other countries. Thus, capability is much more important than the strength in dealing with the mutual relations among individual countries. On the other hand, it’s not necessary for a leader to coerce the others to obey its instruction because the leader are models for the others and can lead the others to get the right things done in the right way by following the right simple rules, such as understanding what to be done, knowing what’s right for the group, developing action plans, making decisions; promoting communication, boosting opportunities but not problems, meeting the needs of cooperation, and enhancing the integrity of the group.

In East Asia, Japan during World War II, as well as the United States and the Soviet Union during the Cold War, once tried to establish a hegemonic system, but failed finally. It’s very difficult to say the so-called China’s tribute system is a kind of hegemonic system because the neighboring countries didn’t recognize the authority and leadership of China by willingness while the system is not an integral one and China didn’t supply the public goods to maintain the system in order. At the same time, China didn’t have declared the regulations for the others to follow so that the system was a unitary one. Japan tried to build its colony by military force and launched the wars against many countries in East Asia before and during the WWII and dominated most of the region at its zenith. However, Japan lost the unjust and aggressive wars when the anti-fascist countries united together, defeated Japan’s army, punished the war criminals, and ended the imperialism. The United States and the Soviet Union built their alliance systems to win the superiority in dominating East Asia regional order. However, most of the East Asian countries kept their independence as the priority even though some of them took sides with either of them or maintained rather close relations with both of them. After the end of the Cold War, the Soviet Union collapsed in pursuing hegemony in the world and the United States began to lose its influence when the local countries lost interests in depending on its security support in keeping the balance of big powers. At the same time, the countries of East Asia began to establish the regional order by themselves without the hegemony or superior regional organization to their national sovereignty.

It can be concluded that modernity of East Asian countries are too strong. Modernity originates from the Westphalia traditions and the concept of autonomy in Wilson’s Fourteen Points during the Versailles Conference after WWI. From the perspective of the social process, the history of national development can be divided into three periods: First, the pre-modern period, during which countries live in a state of “anarchy” where “all are against all” which is proclaimed as Hobbesian Culture. Second, the modern period, during which countries stress sovereignty and autonomy according to the spirit of Machiavelli principles and Locke Culture. Third, the post-modern period, during which countries can live in perpetual peace embedded in Kant’s Culture, which stresses the idea that it is not necessary for the countries to keep security by military conquest. [1]Modernity is also the innermost essence of the Five Principles of Peaceful Coexistence[2] initiated by China, India and some other countries that obtained independence from colonialism after WWII. Charter of United Nations was also formulated to safeguard the modernity of most countries at that time when the United States and some other big powers didn’t try to seek the hegemony or empire. On February 24, 1976, as the most important document of ASEAN in history, The Treaty of Amity and Cooperation in Southeast Asia was acceded and has been treated as the guarding talisman for the ASEAN members against any intervention from other members of ASEAN while promoting perpetual peace, everlasting amity and cooperation among the countries of Southeast Asia which would contribute to their strength, solidarity, and closer relationship. Therefore, we can say that the value of hegemony doesn’t have its market currently and in the future, any country trying to seek hegemony or imperialism will be doomed to fail. However, the leadership is formed naturally and gradually amid the closer interactions of countries in the regional integration of East Asia.

Balance of Regional Integration of Asia Pacific
There are many initiatives of regional integration in East Asia. However, these initiatives are similar and interactive with each other because all of them just appeared after the end of Cold War. So far, different initiatives have been shaping circles of various free trade areas with ASEAN at the core with different features.
ASEAN Free Trade Area (AFTA) took effect in 1992 among the original members of ASEAN, and gradually expanded to all members of ASEAN. When ASEAN came into being in 1967, it declared that economic cooperation was one of its priorities besides lessening the regional security dilemma. The Roadmap of ASEAN Economic Community was formulated with the political and security community as well as socio-cultural community building. With the building of AFTA, ASEAN countries have developed very fast and more integrated in building a single market. During the process, as the least developed countries, the new members of ASEAN have been changing their economic development structure and increasing the productivity when new skills and management ideas are introduced even though they still fall much behind the other members which have implemented the market economy for many years. ASEAN countries have become the attractive destination of international investment and cooperative development projects. Many joint ventures have been built which bring plenty of employments to these countries, which even changes their ways of work and living. However, ASEAN countries as a whole are comparatively not well developed and not strong enough to compete with the big powers like the United States because they are just emerging and not uniting together as one country. Most of ASEAN member states even favor bilateral relations with its counterparts beyond the collective meetings and initiatives. No doubt there will be a huge political impact once ASEAN economic integration is completed.

There are several ASEAN 1 Free Trade Agreements between ASEAN and its dialogue partners, such as China, Japan, South Korea, India, Australia and New Zealand. Such kind of free trade agreements was firstly initiated by China in 2001 and negotiation procedures began the next year. In 4 November 2002, China and ASEAN signed “the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and the People’s Republic of China” Phnom Penh. In November 2004, China and ASEAN signed of the Agreement on Trade in Goods of the China-ASEAN FTA which entered into force in July 2005. In January 2007, the two parties signed the Agreement on Trade in Services, which entered into effect in July of the same year. In August 2009, the two parties signed the Agreement on Investment. On January 1st, 2010, China-ASEAN Free Trade Agreement was implemented and became the largest FTA among developing countries. CAFTA is the model and driving force for other ASEAN Dialogue partners to negotiate FTA with ASEAN. The negotiation process is like building blocks as different contents of FTA are gradually negotiated step by step instead of one-time effort. Early Harvest Program is the most successful experimental measure for the real FTA. It should be mentioned that the model of ASEAN 1 FTA can’t considered as ASEAN at the core because it’s more like a bilateral FTA in essence though there are more than two countries concerned in such kind of FTAs. At the same time, there is a two-speed program for respective ASEAN countries. For example, China implemented the CAFTA with all members of ASEAN while new members of ASEAN can only implement the CAFTA by 2015. It’s a little unfair for ASEAN dialogue partners but conducive to the success of negotiation and implementation, and will benefit all the parties in the end.

ASEAN 3 FTA or APT (ASEAN plus Three) FTA is an East Asia regional FTA in a true sense as all the parties are countries in East Asia. These countries cover most of GDP in East Asia and will be a great breakthrough when three ASEAN 1 FTAs connect together. ASEAN 3 FTA is also promoted by the Chiang Mai Initiative Multilateralization (CMIM) to promote greater financial and monetary cooperation in East Asia in line with greater economic cooperation in general. Economic cooperation is just one aspect and the priority of ASEAN 3 mechanism besides some other 23 fields. However, the negotiation process hasn’t proceeded very smoothly because of the following reasons: First, ASEAN is concerned with its role in regional economic integration because its united economic aggregate can’t compete with China, Japan or South Korea. Once the ASEAN 3 FTA is implemented, it’ll be transformed into the 3 ASEAN FTA and ASEAN will possibly be marginalized in the regional integration. Second, South Korea, and especially Japan are afraid that China will dominate the mechanism as the second largest economy and one of the most attractive market in the world and all the other parties will be more dependent on China too much in the future. Third, there are historical and realistic issues which are intertwined with national interests and emotions between some of the parties, esp. between China, Japan and South Korea. The territorial issues and some other problems usually prevent the progress and depth of the cooperation among them. However, currently, ASEAN 3 is still prominent because it’s a much effective and practical mechanism in East Asia with many comprehensive and interdependent initiatives.

There are two versions of ASEAN 6: the first is Comprehensive Economic Partnership in East Asia (CEPEA), and the other is Regional Comprehensive Economic Partnership (RCEP). The initiative of CEPEA was raised by Japan in 2005 which is composed of all 16 members of East Asia Summit at that time. There were several dynamic for CEPEA: First, East Asia Summit was the most popular forum against the potential superiority of China while India, Australia and New Zealand were included. It seemed that ASEAN 3 Summit would be replaced by East Asia Summit as a multilateral mechanism although issues of fewer fields would be discussed. Second, ASEAN tried to win more popularity and prestige in the world as a regional organization hosting a framework with more parties. That’s why ASEAN supported Japan’s CEPEA although China insisted on the priority of ASEAN 3 framework at the beginning and accepted the parallel negotiation of CEPEA and ASEAN 3 cooperation at last. Later on, with the growing obstacles in negotiation of CEPEA, ASEAN began losing faith and patience in promoting CEPEA. However, when seeing the US began to lead the negotiation of TPP and some of ASEAN members, such as Singapore, Brunei, Malaysia and Vietnam attended the process, ASEAN felt it urgent and necessary to reshape and reestablish its role in regional integration in case that it would be marginalized by its partners and members when they find more effective trade facilitation arrangements. At the same time, ASEAN wanted to raise its own initiative instead of CEPEA which is embedded with Japan’s ambitions of being the leader in regional cooperation. Thus, RCEP was endorsed in the Chair’s Statement of the 19th ASEAN Summit in 2011. According to ASEAN Framework for Regional Comprehensive Economic Partnership, ASEAN “resolve(s) to establish an ASEAN-led process by setting out principles under which ASEAN will engage interested ASEAN FTA partners in establishing a regional comprehensive economic partnership agreement and, subsequently, with other external economic partners”. The first round of RCEP negotiations was held from 9-13 May in Brunei Darussalam. Round 2 was held in Brisbane from 23-27 September 2013, and Round 3 was held in Kuala Lumpur, Malaysia, 20-24 January 2014. Round 4 will be held in China, March 31-April 4, 2014. Good progresses will be made towards meeting the target of concluding the negotiations by the end of 2015.

However, the ASEAN N FTA model has been challenged by the following initiatives of regional integration: First, FTA negotiation among China, Japan and South Korea, that is CJK FTA. CJK FTA negotiation was the product of CJK Trilateral Summit and started in 2012. The three countries have conducted four rounds of negotiation so far and there will be 3 rounds in 2014 as scheduled even though there are some tensions between the three countries. CJK FTA is really thrillingly big when the overall volume of production and trade of the three countries are considered. Second, TPPA is being negotiated among 12 economies including the United States, the largest economy and Japan, the third largest economy. TPPA dated from the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4) among New Zealand, Chile, Singapore and Brunei in 2005, which is only confined but open to the APEC members. The United States tries to complete the negotiation in 2013, but failed, and it tries to finish it as soon as possible. As an FTA with higher standard and quality than WTO, TPPA is designed to be a model for future FTAs with TTIP. It’s really tough for Vietnam and Malaysia that are much less developed than the others. Third, APEC members are still promoting FTAAP although the developed economies didn’t realize the Bogor Goals in 2010 as planned. As the chair of APEC in 2013, Indonesia tried to rejuvenate the Bogor Goals by 2020. Fourth, many countries have acceded or are negotiating bilateral FTAs, especially the FTA between the US and South Korea, KORUS FTA, and FTA between China and South Korea.

Balance of Leadership in Regional Integration of Asia Pacific
Various initiatives of FTA building and regional integration have formed the “Spaghetti Bowl Effect” in East Asia, where there are many intraregional powers and extra-regional powers interacting and interdependent during the process of the economic globalization, financial facilitation, trade liberalization, social informatization and Cultural exchanges. It’s quite natural that there’s a little competition amid cooperation between these prominent actors. It seems that they are pursuing the leadership in the regional integration of East Asia.

As East Asia’s largest economy, China has become the largest trading partner of many countries in the region, becoming the biggest influential actor in regional cooperation. In recent years, China has rapidly increased its security forces and become more unswerving in protecting its national security and safeguarding regional peace. Therefore, some countries in the region and outside the region take it for granted that China will certainly seek to be the leader in East Asia, and even hegemony. This kind of set thinking which resides in the concept of traditional realism, naturally leads to many countries’ vigilance to China, and constrains the greater role of China to play in regional cooperation. However, seeing from the process of regional integration, we can find that China has no intention to seek even leadership by proposing of establishing CAFTA which can’t empower China to dominate the relationship between China and ASEAN. China didn’t welcome’s Japan’s initiative of CEPEA at the very beginning not because ASEAN 3 cooperation is conducive to China’s dominance but because CEPEA is less operational than ASEAN 3 framework and it’s not limited in East Asia which is characterized with ASEAN at the core. At the same time, China’s leaders have reiterated that China supports the basic framework with ASEAN as the leader, ASEAN 1 as the foundation, ASEAN 3 as the main vehicle, and East Asia Summit as an important supplement in East Asia cooperation.

However, in the regional cooperation framework of East Asia, ASEAN is the real axis and centrality in East Asia by providing multilateral negotiation platforms for regional cooperation although its overall strength is not too strong, and its individual members are even weaker. This is mainly reflected in the following aspects: in the political security field, ASEAN is the coordinator in the ASEAN Regional Forum (ARF) and ASEAN Defence Minister Meeting Plus (ADMM Plus), which are usually held in ASEAN countries, and ASEAN outlines the themes and agenda while its partners echo and express their support to the win-win projects which promote mutual trust among ASEAN and its partners. From the perspective of regional economic integration, there are ASEAN 1 FTA, ASEAN 3 to RCEP. ASEAN is always in the central position by deciding the scale, scope, contents and rules of the various FTAs. Actually, ASEAN stays in the center only when ASEAN N FTAs can be implemented.

In the 21st century, with the gradual formation of ASEAN N models for regional cooperation, some countries are not very satisfied with the centrality of ASEAN, or even to replace it. For example, Japan tried to be the biggest contributor in the Chiang Mai Initiative Multilateralism and thought it would be conducive to its leadership in East Asia by supplying public goods to the ASEAN countries.

The U.S. strengthens its military alliance in security and promotes TPPA negotiations in the economic field. Nowadays, the US is dominating the process of TPPA negotiations which can be considered as the top secret and most strict agreement before its conclusion. However, almost all the parties in the negotiation are more interested in the exceptions of its sensitive products in the agreements. For example, Japan especially worries about its agricultural products; Vietnam and Malaysia are particularly concerned with their state-owned enterprises. Even so, the enormous market of the US has a great attraction to all the other parties even though some of them have reached FTAs with the US. The leaders of the US, such as President Barack Obama, and former Secretary of State Hillary Clinton once declared that the US is the natural leader in Asia Pacific by promoting regional security and development.[3] This annoyed ASEAN and its member states very much, and many politicians and scholars of ASEAN criticized the remarks the leaders of the US. The US acceded Treaty of Amity and Cooperation in Southeast Asia in 2009 and the US became the formal member of East Asia Summit in 2011, but annual meeting between ASEAN members and US leaders was not called ASEAN 1 Summit but ASEAN-US leaders’ Meeting which was only transformed as ASEAN-US Summit in 2013. The meetings have been held in the US and an ASEAN country by rotation by year. That is to say, the US has never recognized the leadership of ASEAN in East Asia cooperation or in East Asia Summit. Therefore, the US tries to dominate the agenda and themes of East Asia Summit to shape the regional trends in its favor.

Currently, ASEAN is continuing its strategy of keeping balance of big powers. Namely, the big powers balance each other while ASEAN stands aloof and makes profits from the situation. ASEAN is thus pushed in the centrality of in regional integration. However, overall trend from various signs shows that ASEAN is trying to balance with big powers as a whole, to get its real leadership. Given the strength and capability of ASEAN itself, it isn’t a wise choice. Fortunately, due to its little need and urgency, ASEAN’s performance in this regard is not too strong yet. After all, ASEAN is just an intergovernmental organization in which all members enjoy the equality between themselves by preserving its independence, sovereignty and territorial integration while the principle of non-intervention is strictly followed.

It is worth noting that, although Chinese recognizes the centrality of ASEAN in regional cooperation, ASEAN countries instead of ASEAN are the participants in talking DOC and COC on the South China Sea issue. ASEAN’s leadership is strictly excluded in the process of consulting the issue. ASEAN couldn’t override its members from the very beginning of its formation. South China Sea issue is not an issue between China and all the ASEAN countries, nor China and ASEAN, but China and some of ASEAN members, that is to say, South China Sea issues is also an issue between some of ASEAN members, they are also involved with the territorial disputes in South China Sea between themselves. ASEAN’s secretariat didn’t sign ASEAN Declaration on South China Sea in 1992, Declaration on the Conduct of Parties in the South China Sea in 2002 or Guidelines for implementation of the DOC in 2011. These initiatives are based on the consensus without ASEAN. At the same time, all the parties “stressed the importance of peaceful settlement of disputes through friendly consultations and negotiations by sovereign states directly concerned”, which means non-claimants of ASEAN are also excluded in the negotiation of disputes about the territorial disputes even they play important roles in talking about COC.

Prospects of Leadership in Regional Integration of Asia Pacific
It’s still much uncertain about the leadership of and in the various initiatives of regional integration in the future. It depends on several factors in the following:

First, the ASEAN community can be built by the end of 2015. Although the timeline is postponed from the beginning of 2015 to the end of the year, ASEAN has the confidence in enhancing the unity of all its members. Of course, the so-called ASEAN Community can’t be so  deeply integrated as European Union, but ASEAN countries try to work in that direction while keeping their modernity all the time. So far, ASEAN has made great progress in promoting economic cooperation. Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand have already eliminated import duties on 99 percent of trade-tariff lines. Since January 2010 most of the import duties in Southeast Asia have been reduced to 0 percent. As more and more factors of the single market has been arranged, the free movement of trade, investment, labor and others can greatly interconnect all the countries and their society. While the process of the integration has been moving forward for a long time, 2015 is the year when increased and unconstrained regional trade becomes a reality.

Second, ASEAN can keep its neutral and objective role as the leader in the regional integration. ASEAN has little authority over its members or dialogue partners while it provides various forums for all the parties to talk about the diverse issues in different fields. ASEAN has been leading for many years in the agenda setting and theme planning in no matter security discussion forums such as ARF and ADMM Plus, or dialogue mechanisms on comprehensive issues, especially economic issues, such as ASEAN 1, ASEAN 3, and East Asia Summit. ASEAN has shaped its popularity and fame in coordinating all the parties in ASEAN Way. That’s why ASEAN can act as the leader when all parties find no threat from ASEAN and its member states. Usually, ASEAN countries hold internal meetings among themselves, such as ASEAN Foreign Minister Meeting, ASEAN Defence Minister Meeting, ASEAN Summit, and so on. They can channel the trends of the regional cooperation in the reciprocal direction.

Third, the US succeeds in completing the negotiation of TPPA before RCEP. TPPA is more advanced with high standards, especially of intelligence property protection, market access, green trade barriers and some others. Generally, RCEP is the configuration of a set of ASEAN 1 FTAs, which is considered as the response to the TPPA. There are many overlapping membership between TPPA and RCEP and they can promote the two initiatives of regional integration in the similar direction. In this sense, TPPA can’t go too far ahead of RCEP in operation. However, if TPP can be more effective than RCEP in the future, some members will prefer TPP to RCEP and ASEAN will be marginalized in the regional integration. Although TPPA and RCEP are designed under FTAAP Framework, they are different in membership, scale and scope. All APEC members can get access to TPPA after negotiation in theory, but not all members in RCEP are APEC members. For example, Cambodia, Laos, Myanmar and India are not members of APEC yet. Thus, the US has the relative superiority to ASEAN in reality and can seize the leadership from ASEAN if possible.

Fourth, China and other East Asian countries continue to support the centrality of ASEAN in the regional integration. All ASEAN dialogue partners would rather work like the ASEAN members. They see ASEAN as an opportunity supplier and coordinator between them. That’s why even DPRK is willing to take part in ARF where security issue on Korea Peninsula is usually discussed as an important topic. However, if ASEAN tries to balance with big powers, that is, ASEAN wants to be more assertive and act as a big power or hegemony, it’ll be uncertain if the ASEAN’s partners will recognize it as the leader any longer. Therefore, ASEAN has usually been very conscious in dealing with internal and external, regional and international issues, and strictly adheres to the ASEAN principles. ASEAN played very little role in the border dispute between Cambodia and Thailand, expressed almost nothing on junta administration of Myanmar before its political and economic reforms. ASEAN can play the leading role in East Asian regional integration and bandwagon from the tensions and competition among many big powers. As a group of medium and small countries, ASEAN won’t boost the so-called East Asian Community too fast but gradually and in order, otherwise it’ll hurt ASEAN’s interests at the end because ASEAN is not capable of competing with big powers in productivity, investment, technology and management.

Therefore, ASEAN can continue to be the leader in regional integration of East Asia among various initiatives of regional integration if it doesn’t pursue hegemony or makes mistakes by taking side with one party amid internal or external, regional or international issues. ASEAN is not qualified as the leader in the eyes of many countries considering its capability and strength of its individual members, but it has acted as the leader in the centrality for many years and is recognized by many countries as a contributive coordinator. The wise and moderate leadership itself can be seen as the public goods in regional integration.

China’s Policy Options in Asia-Pacific Regional Integration
There are some opportunities that China can utilize in promoting Asia-Pacific regional integration. First, China has a gross domestic market which is attractive to many other countries. No matter how the political relations with China are, some countries try to avoid the political and security issues influencing or preventing the economic and trade relations with China as much as possible. Second, China has acceded bilateral and multilateral Free Trade Agreements with various regional actors. ASEAN-China FTA is the biggest FTA among developing countries and has obtained great successes since its implementation on January 1st, 2010. The trade volume and economic relations have grown much faster than the average level of the world. Third, China has become the major trade partners of most economies in the world. This means the interdependence and mutual fragility coexist between China and other economies, the fates of China is closely related with others and the world as a whole. This is why China tries to sustain the existent international trade, financial and monetary regimes even though they have been unfair to China and many other developing countries. China has developed as the second largest economy in the world by benefiting from the stable regional and international system. It’s imperative for China to keep the international regimes healthy and effective to the interests of all stakeholders. In this sense, China has no sense to be a revisionist in the transformation of the international system, but tries to reform the international regimes to greater interests of emerging and developing economies.

On the other hand, the challenges that China is currently faced with still multiple and serious. First, China is weak in competing with advanced economies in various fields. China is still inferior in the development level because China’s technological creation rather falls behind many developed countries although the gap is narrower and narrower. China can’t change the fact that China’s large number of cheap commodities exchange expensive technologies and industrial products in a short time. This does mean China’s goods are always popular in the international market, but China’s enterprises are less capable of making equivalent profits with their advanced counterparts in developed countries. Second, China’s external economic policies are not open enough for Foreign Direct Investments and trade partners. There’re still many negative lists for the bilateral and multilateral FTA negotiation. At the same time, China is also discriminated in many occasions and given pressures to open and facilitate domestic market in a more comprehensive and deeper scope. Third, China is reluctant to be proactive in creating new initiatives to promoting external economic relations. It’s quite ridiculous to conclude that China has no capability of making innovative ideas, but many counterpart countries are often suspicious of China’s intention to raise some new concepts or initiatives, and hesitant to welcome or acknowledge them, let alone accept and follow them. On the other hand, China is willing to accept the ideas which are conducive to all partners. However, all these factors don’t inevitable prevent China’s growing economic relations and activities all over the world.

There’re still many controversial arguments on whether China joins the TPP or not. The positive arguments are the following: First, TPP can promote China to further reform external economic policies until they meet the TPP’s criteria. The tariffs of TPP members will be reduced to zero, which will greatly boost China’s export to the other TPP members.[4] Second, it can improve China’s external economic environment by mutually opening market with TPP members, and this can further stimulate China to negotiate TPP-style FTAs with other international economies in a more convenient way. Third, China can flatter the US and other advanced economies and they also will receive China in the equal footing in the future. This can further stabilized the political and security relations by growing economic interdependence, confidence and trust. Fourth, China can develop or rise peacefully at least in economic field. China will be more confident to seek greater discourse privileges in the international economic and trade regime. China can spill over its economic effects gradually over into political and social fields.

Of course, there’re also many concerns from domestic and abroad about the whether China joins TPP or not. First, the regulations on the market access of TPP are too strict and the standards are too high for China to accept currently. It’s not China isn’t willing to join the TPP but can’t accede the TPP in fear that possible losses will be beyond its bearing ability. Second, China should balance the relationship among the TPP, the RCEP and FTAAP. The TPP will prevent China from join other various FTAs of lower quality, so hinder China’s willingness to boost negotiations of RCEP and FTAAP. Third, it’s particularly difficult for the relevant partners to conclude a new kind of creative FTAs. There have been 19 rounds of negotiation since the launch of TPP so far and it’s still far from conclusion in the end. Fourth, the TPP negotiations in essence are multiple bilateral FTAs, are combination and accumulation the various minilateral and bilateral FTAs. The hindrances are not from all TPP members but from some TPP members which try to exclude China out of their dominant bloc. Finally, China’s negotiation of TPP will prevent its dynamics to promote the negotiation of RCEP, which will cast upon a negative influence on East Asian regional integration.

Therefore, China can have such following measures to its interests: First, China can manage and consolidate the existent FTAs which have been concluded or implemented, such as ASEAN-China FTA and some bilateral FTAs. These FTAs can boost China’s economic growth and close relations with its partners. Second, China can wait for the proper timing to participate in the TPP if it is testified as an efficient project. Even though it’ll be more difficult for China to join the TPP in the future, China has confidence to be a member of it because China is potentially qualified to be acceded into the TPP as an APEC member. As the second largest economy in Asia pacific and the world, any regional economic bloc is not complete without the involvement of China’s deep engagement. At the same time, Hong Kong and Taiwan might also join the TPP as a proper identity affiliated to China. Third, China should also promote the negotiation of FTAAP in the framework of APEC, to reset and realize the Bogor Goal in the due time, so that more economies to join the regional integration. China can enhance Asia-Pacific regional integration in the perspective of global economic governance, in which Asia Pacific is one of the indivisible parts. Fourth, China can promote WTO Doha development round negotiation process to supplement the linkage to the multilateral and bilateral FTAs all over the world. China can broaden and deepen its global FTA architecture as the instrument to realize the fair and reasonable international trade order.

The prospects of Asia-Pacific regional integration may appear various intertwined circles of “Spaghetti Bowl” effect with two biggest potential centers, that is, the dominance of the US in TPP and centrality of ASEAN in RCEP. The two initiatives will compete with each other, but actually between the US and ASEAN, to show can be the real rule-maker and leader in the Asia-Pacific regional integration. The two actors have been competing in APEC for many years in a different form, though three members of ASEAN, Cambodia, Laos and Myanmar are not members of APEC after the Kuching Consensus in 1990. In this sense, China can find a neutral policy in seeking its special role in coordinate the two initiatives. Currently, China is supporting to some degree ASEAN by promoting the negotiations to conclude RCEP and not join the TPP when ASEAN is nervous and a little worried about its marginalization in the regional integration. After the conclusion of RCEP, China can find an appropriate way to join the TPP in a proper identity and overwhelming involvement. Amidst the process, China should consistently adhere to two types of relationship, the New Model of Major Power Relations with the US and the Strategic Partnership for Peace and Prosperity with ASEAN. At the same time, China should learn not to seek leadership or dominance like hegemony in regional affairs. Only in this way, China’s actual role and interests can be realized eventually.

Asia Pacific is a region with the diversity of development levels and models, as well as the political cultures and social cultures among so many countries. There of course will be tensions between individual countries because of modernity, independence, sovereignty, territorial disputes which can’t be solved in a day or in one-time effort. However, all the relevant countries can benefit from cooperation other than competition, coordination other than isolation. When they won’t accept a big power as a strong leader, ASEAN may be the best choice for us as a weak leader so far even though there might be some other alternatives in the future. At the same time, with more and more initiatives of regional integration, more and more expansion of cooperative areas, scopes and scales of them in Asia Pacific, it’ll be more important while difficult for ASEAN to sustain the leadership with greater responsibility and willingness in regional integration. All the various stakeholders in East Asian regional integration should support and even help ASEAN to play a better and constructive role, keep self-constraint of its ambition and aspiration to be the hegemony. Currently, ASEAN is developing very fast but it’s still less advanced, less advantaged to compete with the US in leading the regional integration. China can prioritize its policy options of softly balancing the two as the third power by joining the RCEP and TPP in its own interests and way, so that it can constrain the ambitions of the US and ASEAN to dominate the process of regional integration.

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Source of documents:《国际贸易法论丛》

more details:

[1] Robert Cooper, “The Post-Modern States”, The Observer, April 7, 2002; Robert Kagan, “Power and Weakness”, Policy Review, No. 113, June-July 2002. Alexander Wendt, Social Theory of International Politics, Cambridge: Cambridge University Press, 1999, Chapter 6.
[2] The Five Principles of Peaceful Coexistence are: mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence. It was 60th anniversary of FPPC last year.
[3] Hillary Clinton, “America’s Pacific Century” , Foreign Policy, October 11,2011, http://www.foreignpolicy.com/articles/2011/10/11/americas_pacific_century
[4] Zhonghe Mu, “TPP’s impacts and China’s Strategies in Response”, SCID Working Paper, No. 490, January 2014, pp.10-14.