(Finance and Economics) The "Indo-Pacific Economic Framework" was launched, and experts analyzed two "congenital deficiencies"
China News Agency, Beijing, May 24 (Reporter Li Xiaoyu) US President Biden officially announced the launch of the "Indo-Pacific Economic Framework" recently.
Analysts believe that as a tool for economic competition with China, the framework has two "inherent deficiencies", and the actual effect may be greatly reduced.
The "Indo-Pacific Economic Framework" has not yet announced specific plans, but only set four categories: fair and resilient trade, resilient supply chains, infrastructure and carbon reduction, taxation and anti-corruption.
In terms of fair and adaptable trade, seven sub-areas have been set up: labor, environment and climate change, digital economy, agriculture, regulatory transparency, competition rules and trade smoothness.
Thirteen countries including the United States, South Korea, Japan, India, Australia, New Zealand, Indonesia, Thailand, Malaysia, the Philippines, Singapore, Vietnam, and Brunei became the initial members.
Zhao Minghao, a researcher at the Institute of International Studies at Fudan University, said that although the United States has put forward general principles and goals around the Indo-Pacific economy, the participating countries, the speed and strategy of negotiating, and the intensity of implementation are different in different areas.
In general, in terms of the implementation mechanism of the "Indo-Pacific Economic Framework", the Biden administration tends to adopt more informal implementation mechanisms such as "one country, one policy" and flexible consultation, rather than establishing a Trans-Pacific Partnership similar to A formal agreement such as the Agreement (TPP).
Analysts believe that there are two "inherent deficiencies" in the "Indo-Pacific economic framework".
First, under this framework, the United States will not open its market to other member states.
In explaining the Indo-Pacific economic framework in late April, Deputy U.S. Trade Representative Sarah Biankey made it clear that the framework "does not include an agenda for negotiating the mutual opening of markets."
This means that even if this framework is added, it does not mean that domestic goods can enter the US market more smoothly.
As Solis, a senior researcher at the Brookings Institution in the United States, said, only by opening the market to the other side during negotiations can the relevant countries be persuaded to accept high-level labor rights protection standards.
But if there is no bargaining chip at the table, emerging countries will find it difficult to accept rules that could entail high political costs at home.
Second, the Indo-Pacific economic framework is advanced through executive orders signed by the Biden administration without congressional approval.
In this case, once Biden's term ends, the framework faces the risk of "changing the order of the day".
The vast majority of members of the Indo-Pacific Economic Framework are ASEAN countries.
Official data show that trade between China and ASEAN has grown against the trend during the epidemic.
In 2021, the trade volume of goods between China and ASEAN will reach US$878.2 billion, a year-on-year increase of 28.1%.
Among them, China's exports to ASEAN were US$483.69 billion, a year-on-year increase of 26.1%; imports from ASEAN were US$394.51 billion, a year-on-year increase of 30.8%.
At present, ASEAN is still China's largest trading partner.
Xu Liping, a researcher at the Institute of Asia-Pacific and Global Strategy of the Chinese Academy of Social Sciences, said that facts have proved that China-ASEAN cooperation has strong resilience and potential.
With the implementation of the Regional Comprehensive Economic Partnership (RCEP), the potential for cooperation between the two sides will be further released, stimulating more demand and markets.
The Indo-Pacific economic framework based on exclusivity is obviously inconsistent with the general trend of regional integration and globalization. It is difficult to bring lasting dividends to the region, and it is destined to be difficult to promote effectively.
"The Indo-Pacific economic framework tries to use ASEAN as a breakthrough to contain China, which is likely to backfire in the end." Xu Liping said.
Nonetheless, China cannot take the Indo-Pacific Economic Framework lightly.
Xu Liping pointed out that the Indo-Pacific economic framework consists of multiple modules covering different issues. Signatories do not need to join all the modules, but must agree to all the conditions of the modules.
This is actually the "menu" made by the United States, and the "orders" from various countries, with values and rules as the core, to establish a key supply chain system independent of China.
He believes that if the logic of the Indo-Pacific economic framework is followed, China will face severe challenges in the economic security environment in the future.
On the one hand, the “Belt and Road” cooperation projects may face the challenges of more “demonization” or stigma measured by high environmental protection and labor standards; on the other hand, the key supply chain system centered on semiconductors in the West will China is forming more and more squeezes, which may have an impact on the development of China's high-tech industries.
Zhao Minghao also said that the current external environment is very different from when the Obama administration promoted the TPP.
Therefore, the challenges posed by the Indo-Pacific economic framework cannot be ignored.
Facing the impact, China should further deepen domestic reforms, actively promote the implementation of RCEP, continuously enhance its own economic strength, and effectively respond to the increasingly fierce economic competition among major powers.