Is China Ready For A Free Trade Zone In The Apec?
A trading nation is a nation in which international commerce constitutes a high percentage of its gross domestic product. In other words, a trading nation has an immense trade surplus. This means that their total goods imports less total goods exports constitute a high percentage of the national income. This is not the case for other nations in the world. When comparing the economic strength of a nation to that of another nation, it is easy to see which nation has the greater surplus.
China has been doing quite well economically and this is reflected in its overall goods exports. It is also evident from the level of foreign investment it receives. China’s foreign direct investment (FDI) has risen dramatically over the past decade to reach levels not seen since the early seventies. While this has been good for Chinese exporters, it has also encouraged Chinese manufacturers to take advantage of markets beyond their home turf.
One obvious result of this rise in China’s FDI is the surge in global exports. Imports of goods from China have risen almost forty percent in recent years. Most of these products are manufactured here in China and exported to other countries. While China’s role as a trading nation has been critical to the global economy, it can also be said that much of its success as a manufacturer and exporter of goods comes from its ability to successfully manage the global supply chain. This ability to do so has allowed it to become a major exporter of goods internationally.
To be successful at being a trading nation, a nation must be able to establish itself as a credible trading partner. One way to do this is to ensure its currency is accepted at other destinations in the world. This is important because most major currencies are traded globally. Another way to build confidence in the dollar of one nation against that of another is to have a stable central bank. A strong and stable central bank is vital to facilitating trade and investment. Finally, a nation that is committed to building up its soft power – its influence among other nations – will find that it is far more likely to successfully establish itself as a credible trading nation.
Building Up Soft Power: Creating a Strong Free Trade Zone In pursuing its goal of becoming a powerful trading nation, China must address some serious issues that are likely to impede its ability to successfully become a leading trading nation. The first and most important issue is the need for a free trade zone in the Asia-Pacific region. The existence and strength of this free trade zone is critical to promoting trade between the United States and China. Many in the United States and in the United Kingdom believe that such a zone should be a part of an overall economic strategy for the United States. A strong free trade zone will make it easier for goods to be shipped to and from the United States and reduce barriers to trade.
China’s neighbors in India, South Korea, and Taiwan are all trying to forge ahead with economic integration and an open trading agreement with the United States. These nations will not join the Apec unless there is an open and free trade agreement between them and the United States. While such an agreement is possible, it will be a slow process given the poor economic conditions in these Asian nations. If China wants to successfully become a trading power and wants to join in economic integration, it needs to take a long time to complete its internal reforms and improve its external trade practices. It is too early to talk about the possibility of Chinese economic integration into the Apec.