Asia-Pacific News

China as a champion of free trade? Not so fast

Why China is not a free trade leader
Why China is not a free trade leader

The world's second-largest economy has been promoting itself as a champion of free trade and globalization amid Washington's isolationist foreign policy but those claims are nothing but hot air, according to a former U.S. trade representative.

"You really can't be a leader of free trade if you have restrictions on your own system," said Michael Froman, one of President Obama's top negotiators during the Trans-Pacific Partnership (TPP) talks. "To be a leader of the global trading system, it takes more than just declaring

Speaking to CNBC on the sidelines of the Boao Forum for Asia on Friday, Froman, who is currently a distinguished fellow at the Council on Foreign Relations, acknowledged that Chinese President Xi Jinping's government did outline a number of sweeping changes to markets and financial systems during the 2013 Third Plenum.

But since then, the world hasn't seen much reform out of China, he said.

"There are specific actions you need to take internationally to help support the system and actions you need to take domestically to open up your economy and make sure there's a level playing field," Froman explained.

'Declining US influence in Asia is a risk'
'Declining US influence in Asia is a risk'

When it comes to doing business on the mainland, the global community remains concerned about practices such as localization requirements and forced technology transfers, he noted.

"That flies in the face of being a global leader on these issues."

Froman was not at all surprised at the fact that Beijing joined the eleven remaining TPP members in trade talks earlier this month.

"We've been saying for some time that if the TPP did not move forward, it would create a void that China was too willing to fill, and that even our closest military allies would line up behind China. We're seeing that play out now in real time."

Beijing currently has a multitude of initiatives to increase its influence across the region, including the Belt and Road infrastructure program, territorial expansion in the South China Sea and the Regional Comprehensive Economic Partnership (RCEP) pact, Froman explained.

"It's executing on that regional strategy and drawing other countries closer to it rather than having the U.S. in the region as a balancer."

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