China, wary of isolation, asks Asia-Pacific countries to avoid ‘cliques’

China’s international trade representative said the country is making progress toward joining a Pacific Rim digital economy deal while also taking care to mention it opposes any “small cliques” among nations – language that analysts say is aimed at avoiding the dangers of being cut off from global value chains.

Trade representative Wang Shouwen said that talks have led to “positive progress” for China’s membership in the Digital Economy Partnership Agreement (DEPA) when he attended a meeting with pact members at the sidelines of the Asia-Pacific Economic Cooperation (Apec) summit in San Francisco on Tuesday. Wang also serves as vice-minister of commerce.

China is “willing to work with members to step up technical consultations, jointly handle key items and respective concerns, and strive to explore practical cooperation in the field of digital economy,” Wang said, according to a statement by the ministry.

The three-year-old scheme works to solve digital trade and digitalisation issues. Current members are Chile, New Zealand, Singapore and South Korea.

China is also vying to join the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a high-level trade and investment treaty among players such as Japan, Australia and Singapore. But little progress has been made.

“We must adhere to openness and inclusiveness and continue to promote membership expansion, a process to benefit more economies,” he said. “All parties should avoid forming closed and exclusive ‘small cliques’ in the region.”

China’s Commerce Minister Wang Wentao also discussed China’s application to join the CPTPP with his Japanese counterpart Yasutoshi Nishimura in San Francisco on Tuesday, the ministry said.

03:29

RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal

RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal

The two broached the topic of adding new members to RCEP, where Japan is a founding member. Both sides also agreed to establish a dialogue on export controls and a working group on boosting business ties.

The flurry of negotiations and comments suggests officials in Beijing worry that some agreements have been created to limit China’s global trade space or access to advanced technology, analysts said.

“China is responding to the US strategy of forming various ‘councils’, ‘groups’, or ‘partnerships’ with like-minded countries to address global issues of common concern,” said Stephen Olson, a senior research fellow at the Hinrich Foundation, a philanthropic research organisation with a focus on Asia.

China says RCEP pact gives it ‘powerful leverage’ in trade, investment

“China’s interpretation is that the real purpose of these groups is to coordinate actions and strategies that could disadvantage or exclude China. This is a very troubling trend from China’s perspective.”

Beijing is concerned it will be “locked out” of these deals, said Stephen Nagy, a senior associate professor of politics and international studies at International Christian University in Tokyo.

“Ultimately, China is a global trading superpower and if it gets locked out, that prejudices it,” Nagy said. “If you’re not at the table, you’re on the menu.”

Concerns over being shut out are also likely a direct result of the US-led campaign to restrict its access to advanced technology.