Chinese President Xi Jinping. Photo: Reuters / Tyrone Siu
Chinese President Xi Jinping. Photo: Reuters / Tyrone Siu

During the five years between the 18th and 19th Chinese Communist Party congresses, President Xi Jinping has openly called for Asia to move toward a community of common destiny.

The Chinese strategy of acceleration and leadership on the Regional Comprehensive Economic Partnership (RCEP) officially unfolded at the the 18th Congress in 2012, which pointedly promoted the strengthening of China’s free-trade networks for their further global integration. This policy is highly significant both in time and substance, as it signaled that China’s strategic interests would move to “go global” very early in Xi’s tenure.

Indeed, as early as September 2014, China’s Ministry of Commerce released a statement outlining why “further promoting RCEP negotiations is of great significance” and “a solid foundation for the grand blueprint of jointly building the Asia-Pacific FTA”.

Reading between the lines of the ministerial statement, it is clear that for China the RCEP represents a crucial opportunity for guaranteeing the autonomous right of domestic economic development. Notably, such economic autonomy is tied to the “smooth establishment of the RCEP” for the “reconstruction of international economic and trade rules”, seen as a strategic opportunity for “raising China’s position in the global industrial value chain”.

Later on, then-commerce minister Gao Hucheng stated that the RCEP would “strengthen the status and effect of East Asia in world economy”. Even though Gao clarified that “the Chinese side supports ASEAN to lead the negotiation”, he also pointed out that the Chinese side “is the firm supporter and promoter of RCEP”.

This ambivalent position shows that China’s official support of the primacy of the Association of Southeast Asian Nations is tactical, as it appears simply to pre-empt other rival claims of leadership in the area, without raising suspicions of dominance. Instead it seems that China is the real driving force behind the pan-Asian economic integration, of which RCEP is merely a steppingstone and the test field to prove to regional partners and beyond that China is able to lead complex trade negotiations after only a decade of membership in the World Trade Organization (WTO).

China’s firm pursuit of the RCEP is demonstrating pivotal to this strategy, also considering that the RCEP would become the largest FTA for China, accounting for more than 30% of its total foreign trade with import-export volumes exceeding US$1.2 trillion, according to WTO data. Besides, it remains the fact that China is the largest trading partner of ASEAN while ASEAN is only the third-largest trading partner of China.

Furthermore, Chinese capital investments in the ASEAN countries are increasing significantly because of the massive infrastructure projects that will be implemented under the Belt and Road Initiative (BRI). Indeed, as China widens its Silk Road to the world, pundits maintain that “politically RCEP serves as a building block of China’s overarching economic and diplomatic framework”.

Furthermore, Chinese geo-economic research explains that conjoining the RCEP and BRI points out a “geographic direction for China’s global strategy in the 21st century”. Quite pointedly, displaying “the first attempt that China has made to reshape Eurasia in the new geographical and historical situation” goes way beyond the tactical horizon of securing China’s supply of commodities within Asia.

Overall, the bludgeoning economics of the ASEAN-China relationship unveils the evolution of China’s de facto leadership in pan-Asian economic integration from a mere transactional approach based on business to a more transformative role based on geopolitics.

In the lead-up to the 19th National Congress of the Chinese Communist Party starting on October 18, this is the second in a series of pieces on the RCEP in the context of Xi Jinping’s world trade game. These briefs are edited excerpts from my research paper forthcoming on Geopolitica Rivista (Volume VI-1), a peer-reviewed journal published by the Italian Institute of Geopolitical Studies (ISAG).

This series seeks to understand whether and to what extent Xi’s China is leading the RCEP negotiations to pursue its own geopolitical paradigm shift in Asia, which is to avoid the creation of a regional anti-China alliance under US auspices in the short term, and to create an alternative to the American world order in the long term.

The first article in the series is available here.

Giovanni Di Lieto

Dr Giovanni Di Lieto teaches international trade law in the International Business program at Monash University in Melbourne, Australia, and engages in expert analysis on the geopolitics of trade and investment for media, industry and government outlets. His professional career developed as a commercial law practitioner in Italy, and then as a global value chain specialist across the US, Europe and China.