Rival trade pacts vie for Pacific hegemony

In a move being openly portrayed as part of a race with the US-backed Trans-Pacific Partnership (TPP) for hegemony in the Asia-Pacific region, China has set up a working group to study the feasibility of a Free Trade Area of the Asia Pacific (FTAAP). The proposal comes ahead of a meeting in May of trade ministers from the Asia Pacific Economic Cooperation (APEC) forum, which China will host. Wang Shouwen, an assistant commerce minister, assured: "We think there will be no conflict between the FTAAP and the region's other FTAs under discussion." But reports note that the news comes just as progress of the TPP has snagged over Japanese insistence on protecting its agricultural and automotive sectors. Chinese President Xi Jinping in October said at the APEC business forum in Indonesia that Beijing will "commit itself to building a trans-Pacific regional cooperation framework that benefits all parties"—an obvious veiled criticism of the TPP. (Tax News, May 5; AFP, April 30)

Even well before the announcement of the FTAAP study, Beijing has been pushing a Regional Comprehensive Economic Partnership (RCEP) within the Association of Southeast Asian Nations (ASEAN) as a perceived "strategic counter to the US-led TPP." China has been more aggressively pushing the RCEP since Japan decided it would participate in TPP talks. Those nations in the RCEP process now extend beyond Southeast Asia to include India, Japan, Australia and New Zealand—those last four also being in the TPP process. Also involved in both processes are Malaysia and Vietnam. (Sun Daily, Malaysia, Yomiuri Shimbun, Japan, May 5; CoolLoud, Taiwan, April 20; The Nation, Thailand, April 17; SCMP, April 11)

Obama baits activists
The TPP has been coming under considerable opposition from international activists. At his joint press conference with Malaysian Prime Minister Najib Razak, President Obama addressed concerns that "intellectual property provisions" of the TPP will lead to "higher costs of medical supplies." His response was that those who raise such concerns have a "lack of knowledge" about what is happening in the negotiations, and are therefore prone to "rumors" and "conspiracy theories." Obama's comments were certainly an irony, given the strict secrecy that has characterized the TPP talks. (InfoJustice.org)

Beijing colonizes Amazon, Andes
But activist opposition is beginning to emerge to Chinese imperail ambitions as well—especially in Latin America. Chinese capital has been making especially aggressive inroads in the Amazon basin—with Ecuador is in the lead. Shunned by most global lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, which are expected to cover 61% of Quito's $6.2 billion budget this year. In return, China can claim as much as 90% of Ecuador's oil shipments in coming years. "This is a huge and dramatic shift," said Rene Ortiz, a former Ecuadoran energy minister and current secretary general of the Organization of the Petroleum Exporting Countries (OPEC). "Never before has Ecuador committed its oil to a lender." (Financial Post, Canada, Nov. 26) A piece in the Mexico-based leftist website Rebelión, "China's 'Soft' Imperialism and the Conquest of Latin America," asserts that much of the China-bound oil is slated to be taken from Yasuni National Park, which the government controversially agreed to open to hydrocarbon exploitation last year.

Peru is also opening its hydrocarbon-rich rainforest to Chinese capital. Out of a total of $90 billion in Chinese overseas investment last year, as much as $70 billion was destined for the Amazon basin, with $10 billion of that in Peru, according to Paulina Garzón of Ecuador's Center for Economic and Social Rights (CDES). (Gestión, Peru, April 28)

Peru's mineral rich mountain ranges are also being targeted by Chinese capital. With the appropriation of Peru's Las Bambas mega-mine by the Chinese firm Minmetals, China has overtaken the US as the top foreign investor in Peru's mineral sector, with $14 billion (23%) to USA's $10 billion (15%). (CooperAcción, April 21)

The anti-imperialist card
Despite the emergence of activist skepticism, Beijing continues to play to anti-imperialist sentiment in seeking investment in the developing world. China's Premier Li Keqiang is currently making his first visit to Africa since taking office last year, taking in Ethiopia, Nigeria, Angola and Kenya. Li has dismissed accusations of Chinese complicity in rights abuses and environmental despoliation on the African continent as "growing pains" and "isolated incidents." China has been Africa's biggest trade partner since 2009, with direct investment dramatically jumping from $500 million in 2003 to almost $15 billion by 2012. Last year, China pledged $20 billion in loans for infrastructure development on the continent. In announcing his tour, Premier Li said: "I wish to assure our African friends in all seriousness that China will never pursue a colonialist path like some countries did or allow colonialism, which belonged to the past, to reappear in Africa." (Al Jazeera, May 4)


  1. Australia and China seal free trade deal

    China and Australia have sealed a major free trade agreement, as Chinese President Xi Jinping made a rare address to parliament in Canberra. The deal will give Australian dairy farmers, winemakers and other sectors tariff-free access to the huge Chinese market within a few years. China is seeking greater access for its investment projects. (BBC News, Nov. 17) Days later, China and New Zealand agreed to expand their burgeoning trade relationship during a state visit by President Xi. (Channel News Asia, Nov. 19) Meanwhile, a new exchange link opened that allows Hong Kong and Shanghai investors to trade shares on each other's bourses, a major step towards opening China's tightly controlled capital markets. (Reuters, Nov. 17)