On his first working day as President of the United States, the first presidential decree signed by Trump was to formally withdraw from the Trans-Pacific Partnership (TPP). The “group leader” left the group, and the people in the group behaved differently. Japan thought that since the United States left, I should be the boss; Australia thought that if the United States quits, we would drag China in. It’s the same thing.
Is China really interested in joining the TPP? We might as well assume that if China really joins the TPP, what are the pros and cons to China?
To analyze the pros and cons of China’s joining the TPP, we must first know why the United States wanted to withdraw from the TPP.
What kind of agreement is TPP?
In plain language, TPP is something that facilitates Wall Street in the United States to shear the wool of member countries. It is absolutely beneficial to the U.S. financial industry, but it will have a great impact on the U.S. manufacturing industry. Trump values more industrial capital than Wall Street, so he withdrew from the TPP.
Why do Australia, Chile and other countries want China to join the TPP?
Australia, Chile and other countries are major resource exporters, and the policies Trump has implemented after taking office have a strong “anti-globalization” tendency, which is very detrimental to them. But China is different. China is a beneficiary of economic globalization. China’s participation will definitely bring more advantages than disadvantages to resource-exporting countries.
So if China joins the TPP, will it have any impact on China’s textile industry?
1. The transfer of the textile industry to Southeast Asia is accelerating
Nowadays, the trend of China’s traditional textile industry moving to Southeast Asia has become more and more obvious, especially the garment industry, which has been forced into a corner by low-cost labor in Southeast Asian countries, and a large part of the low-end fabric industry has also moved there.
The most obvious function of TPP is to facilitate the flow of capital among member countries. In the TPP agreement, the textile industries in Vietnam and Malaysia are developing rapidly, and Brunei is gradually becoming one of the overseas layout options for Chinese petrochemical companies.
It can be expected that given the cost advantage overseas, if China really joins the TPP, the transfer of the textile industry to Southeast Asia will accelerate.
2. Accelerate the transformation and upgrading of the domestic textile industry
In the past few years, China has been promoting the transformation and upgrading of the manufacturing industry, and the textile industry, as a traditional manufacturing industry, is naturally no exception. In the past two years, under the environment of strict environmental protection pressure and significant increase in raw material costs, the living space of companies that have not transformed and upgraded or that are slow to transform and upgrade has been compressed to a very small extent.
If China joins the TPP, as mentioned above, low-end textiles will be transferred to Southeast Asia at an accelerated pace. If we still make simple low-end products, it can be said that it will be difficult to find a way out in China. This will force companies to transform.
On the other hand, the TPP agreement includes environmental protection content, which coincides with domestic measures to strictly control environmental protection in recent years. This also imposes requirements on foreign trade companies in terms of energy conservation, emission reduction, and environmental protection.
3. It will be beneficial to China’s foreign trade exports in terms of tariffs
In the comparison of textile costs between China and Southeast Asian countries, in addition to the labor gap, tariff differences are also a very important reason.
Experts once analyzed that the most important article in the TPP is the principle of origin, and this article is also the most important article that curbs China’s development. To put it simply, products can be imported with zero tariff only when all production processes are circulated among member countries. It can be said to be a very “exclusive” principle.
But once China joins the TPP, it becomes one of its own people and must be treated according to the standards of its own people. In terms of tariffs alone, China’s joining the TPP is beneficial to textile exports.
4. Create barriers to textile exports from Southeast Asian countries
Issues such as environmental protection, workers’ welfare, and intellectual property rights used to be excuses for China to be made difficult by Western countries. When China’s economy has developed to a certain level, issues such as the environment, workers’ treatment, and intellectual property rights have also made great progress.
In Southeast Asian countries, due to the low level of economic development, the overall level of its textile industry may still be at the level of China from the late 1990s to the early 21st century, so problems in this area are still very serious.
If China joins the TPP and gains its dominance, it can launch attacks on Southeast Asian countries in these aspects.
Finally, let’s analyze the possibility of China joining the TPP
The most direct purpose of the TPP when it was established was to contain China. It is inevitable that there will be many clauses that are not conducive to China.
Let’s take a look at the unified regulatory standards of the TPP (Pacific Rim Free Trade Agreement), which include: freedom of trade and services (prohibition of various thresholds), free currency convertibility (prohibition of manipulation of exchange rates), fair tax system (prohibition of subsidies), privatization of state-owned enterprises , protection of labor rights, protection of intellectual property (protect originality and oppose copycats), protection of environmental resources (not allowed to pollute the earth’s ecology), freedom of information (including freedom of the press, freedom of the Internet, etc.)… After reading, you will find that China has violated all these conditions. Some of them are Chinese��It’s acceptable, but China will definitely not agree to some of the content related to sovereignty.
Therefore, if China wants to join, the content of the TPP will inevitably need to be significantly modified.
On the other hand, if China really joins the TPP, a very strange phenomenon will occur. In the words of Zhihu netizen Cui Yunlong, “Yuan Benchu returned to Hebei in anger, and all the princes welcomed Taishi Dong”, which is ironic when you think about it. Moreover, the United States has already set up the overall framework before withdrawing. China needs such a framework to allow the international community to recognize its market economy status and seek further development.
To use an analogy, China’s own companies (One Belt, One Road) have good prospects, but they cannot be listed (recognizing market economy status). At this time, someone happened to have a TPP framework, and the original major shareholders ran away. At this time, China You can seize the opportunity to use the TPP to “backdoor listing”.
Therefore, the editor analyzes that the possibility of China joining the TPP is still very high, but it is unclear how similar the TPP then was to the current TPP.
</p
