Beijing hopes to finalise regional trade pact soon

China hopes to conclude talks on the Asean-led, 16-nation Regional Comprehensive Economic Partnership (RCEP) soon amid an escalating trade spat with the United States.

Chinese Ambassador to Asean Huang Xilian said yesterday that Beijing notes the urgency of the deal to maintain a rules-based trading system amid a surge in protectionism in global trade.

Both parties consider the deal "the best way" to safeguard multilateralism, Mr Huang told journalists after an event to mark the 15th anniversary of the Asean-China Strategic Partnership. "We work together with Asean and other members to conclude RCEP at an early date and to work together to safeguard multilateral trading system," he added.

Started in 2012 between the 10 members of Asean and its six major trading partners - Australia, China, India, Japan, New Zealand and South Korea - the RCEP talks aim to create an integrated market of more than three billion people.

Mr Huang said the escalating trade war between Beijing and Washington will have repercussions in Asean countries, although he did not elaborate.

Last week, the US applied 25 per cent tariffs on US$34 billion (S$46.3 billion) worth of Chinese goods, and China immediately responded by imposing levies on US$34 billion of American items. Both countries plan to apply duties on another US$16 billion in goods that would affect $50 billion worth of shipments.

As the US is prepared for another round of tariff hikes, China will certainly move forward with "necessary counter-measures", Mr Huang said, adding that they will be announced soon.

China's exports have grown significantly following its entry into the World Organisation in 2001, allowing it to become the world's second-biggest economy, after the US. But it has faced mounting accusations from its trading partners, including the US, that it has adopted unfair trade practices.

Asean Secretary-General Lim Jock Hoi told the anniversary event that the relationship between the bloc and China is among "the most substantive and dynamic partnerships" in the region. He added that both parties will take advantage of the upgraded Asean-China Free Trade Area to achieve their goals of posting US$1 trillion in two-way trade and US$150 billion in two-way investment by 2020, he added.

"We are also committed to working together to make substantive progress in the negotiation for a quality Regional Comprehensive Economic Partnership this year to boost regional trade and growth."

Trade between Asean and China hit a record high of US$514.8 billion last year, up 13.8 per cent year on year, said Xinhua, citing China's Ministry of Commerce. Chinese exports to Asean rose 9 per cent to US$279.1 billion in the past year, while its imports from Asean climbed 20 per cent to US$235.7 billion.

Vietnam, Malaysia and Thailand were China's largest trading partners in the region last year. China spent US$9.2 billion in the region in 2016, according to the Asean Secretariat.

A version of this article appeared in the print edition of The Straits Times on July 13, 2018, with the headline 'Beijing hopes to finalise regional trade pact soon'. Print Edition | Subscribe