China eyes FTA network

China plans to build a high-level network of free trade agreements while pledging to act as a firm supporter of the multilateral trade system under the World Trade Organization, trade officials said on Wednesday.

"China has basically established a platform of free trade agreements covering neighboring regions and FTA networks radiating the continents," Yao Jian, spokesman of the Ministry of Commerce, told reporters in Beijing.

In the comprehensive reform plan released in November, China vowed to speed up its FTA strategy based on trade pacts with neighboring economies and to develop a global and high-standard FTA network.

"High-standard means more facilitation of goods trade, trade in services as well as investment," said Li Guanghui, vice-president of the Chinese Academy of International Trade and Economic Cooperation, a think tank of the ministry.

Sun Yuanjiang, deputy director general of the ministry's Department of International Trade and Economic Affairs, said that the China (Shanghai) Pilot Free Trade Zone will "break new ground and allow us to gain experience" to build future FTAs.

"The pilot programs in the Shanghai zone, such as loosening restrictions on the services sector, simplifying business registration procedures and improving investment facilitation, are also new issues in future FTA negotiations. The pilot zone will create favorable conditions for our future FTAs," he said.

Sun declined to disclose further plans for the free trade zone, as overall guidelines are being handled by the State Council, China's cabinet.

China has signed FTAs with 12 countries and organizations, including the Association of Southeast Asian Nations, Iceland and Switzerland, and is under negotiations with six economies, including South Korea, the Gulf Cooperation Council and Australia, according to the ministry.

As East Asia becomes the new engine of global economic growth, China has boosted efforts for the China-South Korea FTA, the China-South Korea-Japan FTA and the Regional Comprehensive Economic Partnership as well as to upgrade the FTA with the ASEAN, said Sun.

However, at the end of November, South Korea expressed interest in joining the United States-led Trans-Pacific Partnership, a high-level free trade pact for the Asia-Pacific region. Japan joined the 11-nation talks last summer.

"At present, we don't notice any impact of South Korea's move on the China-South Korea FTA or on the China-Japan-South Korea FTA. Future impact will depend on South Korea's specific move to join the TPP and the progress of the two FTAs," said Sun.

He added that China has an "open attitude" toward the TPP and welcomes any regional trade pacts as long as they can boost regional economic integration.

"We've been studying the TPP from the very beginning. But joining the TPP is a big deal as it has unique rules, different from our current ones. We are following its progress, studying its standards and analyzing its advantages and disadvantages," he said.

As the World Trade Organization made little progress on renewing the global free trade agreement in the past decade, regional FTAs are booming. A total of 221 FTAs were reported to the WTO by the end of October, and 80 percent of them were launched in the past 10 years amid the global financial crisis and the following recession, according to Sun.

"However, in the long run, no regional free trade pact can replace the multilateral trade mechanism. Only the WTO can unify the different standards in the different FTAs and expand the scope of trade liberalization," said Sun. "We firmly believe that the multilateral trade mechanism is the mainstream and regional FTAs are supplements."

On Wednesday, Commerce Minister Gao Hucheng said during the Ninth WTO Ministerial Conference, which is being held in Bali, Indonesia, from Dec 3 to Dec 6, that participants should break the decadelong dilemma and reach a new global trade agreement.