China backs push for regional integration

China backs push for regional integration
Chinese Vice Premier Zhang Gaoli.

China has pledged openness and resolve in establishing closer partnership and integration with Asia-Pacific economies, even as rival free trade pacts championed by Washington and Beijing have led to fault lines in the 21-member Apec grouping.

Speaking at the opening of the Apec Finance Ministers' Meeting here yesterday, Vice-Premier Zhang Gaoli said China is willing to work with the various economic bodies and take steps towards regional integration and sustainable development.

"We are willing to take on a broader horizon and take resolute steps to strengthen reform and innovation for mutual benefit and win-win cooperation," he told the audience, which included Singapore's Deputy Prime Minister Tharman Shanmugaratnam.

As the United States and China compete over who will dominate trade policy in Asia in the coming decades, two big-bloc trade agreements have emerged, complicating negotiations.

They are the US-led Trans-Pacific Partnership and the China-led Regional Comprehensive Economic Partnership, each with overlapping but separate sets of members.

Beijing is also expected to continue pushing for an Apec-wide free trade zone by 2025, known as the Free Trade Area of the Asia Pacific, at the Apec leaders' summit next month.

Despite the differences, Mr Zhang highlighted possible avenues for cooperation such as in infrastructure investment and financing.

China will commit US$5 million (S$6.3 million) from its Regional Cooperation and Poverty Reduction Fund under the Asian Development Bank (ADB) to support infrastructure public-private partnerships in developing economies, he said.

A glaring omission from talks, however, was the Asian Infrastructure Investment Bank (AIIB) proposed by China last year.

Chinese Finance Minister Lou Jiwei said the AIIB was not discussed although the group agreed that a huge financing gap exists in the infrastructure sector. "I've spoken to the World Bank and ADB on multiple occasions and they have both welcomed the AIIB. The AIIB is complementary to them and we'll work together in the future," he told a press conference after the meeting yesterday.

The AIIB is widely seen as part of China's efforts to dilute the influence of existing multilateral financial institutions such as the World Bank and the ADB, which Beijing regards as too dominated by the US, Europe and Japan.

Other issues discussed include persistent weaknesses in the global and regional economy and fiscal and taxation policy.

A day after China announced growth of 7.3 per cent, a five-year low, in the third quarter, Mr Zhang maintained that the figure was within "reasonable range".

His comments echoed Premier Li Keqiang's remarks to the Apec ministers on Tuesday when he noted that time is needed for reforms to gain traction.

On the bilateral front, Japanese media reported that Japan's Deputy Prime Minister and Finance Minister Taro Aso and Mr Zhang chatted for "minutes" on the sidelines of the meeting.

Last week, Mr Abe and Premier Li Keqiang exchanged greetings at the Asia-Europe Meeting in Milan. These contacts bode well for a possible bilateral summit between the Asian rivals next month.

This article was first published on Oct 23, 2014.
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