China to drive APEC growth

2014-11-07 00:55:31 GMT2014-11-07 08:55:31(Beijing Time)  Global Times
A Chinese worker prepares for the APEC CEO Summit 2014 at the media center for the Asia-Pacific Economic Cooperation summit in Beijing on Thursday. Photo: AFPA Chinese worker prepares for the APEC CEO Summit 2014 at the media center for the Asia-Pacific Economic Cooperation summit in Beijing on Thursday. Photo: AFP

Asia-Pacific Economic Cooperation (APEC) members are cautiously optimistic about the region's business outlook for the next few years, a senior APEC official said Thursday, with experts saying that proposals offered by host China are expected to inject vigor into the region's long-term growth.

Economic progress in APEC economies since 2008's global financial crisis has been slow, and the region needs new engines to sustain its growth, Denis Hew, director of APEC's Policy Support Unit, told a media briefing on the sidelines of the APEC summit Thursday.

APEC economies currently account for 57 percent of global GDP. The region's GDP grew by 3.9 percent year-on-year in the first half of 2014, lower than the 4.3 percent seen in the second half of 2013. Hew expects regional economic growth for the whole year to be 3.9 percent, and rise to 4.3 percent in 2015 on the back of a robust recovery in the US economy.

But the region is still faces challenges such as sluggish private consumption and low commodity prices dragging down resource-rich economies, as well as the questionable sustainability of the US economic recovery, Hew said, adding that APEC members should seek to reduce their dependency on exports to drive the growth. Structural reforms and the service sector should serve as the new engines, he said,

The service sector accounts for 17 percent of APEC economies' output and 46 percent of regional employment, but many APEC economies still focus on low-end service industries. "There's lots of work for policymakers to promote knowledge-based services," he said.

During the two-day Concluding Senior Officials' Meeting of APEC 2014 that closed Thursday, APEC members vowed to improve infrastructure, facilitate trade, and promote cooperation in global value chains with a batch of measures that experts say will inject new vigor into the region's long-term development.

APEC officials have agreed to study the Free Trade Area of the Asia-Pacific (FTAAP), a regional trade pact that will cover all of the 21 APEC members, Alan Bollard, executive director of APEC Secretariat, told the same briefing.

He estimated that it would take two years for APEC members to map out a path to an agreement, and to determine how the proposed pact will interact with the US-led Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). The latter partnership includes China, while the former does not.

An APEC Strategic Blueprint for Promoting Global Value Chains (GVC) Development and Cooperation was another highlight of this year's summit, marking the first time that promoting GVC has been written into a regional development strategy.

"Developed economies have captured the design and sales [links of the value chain], which have higher profitability, while most developing economies [are stronger in the less profitable] manufacturing sector. We want all economies to benefit from the supply chain through closer cooperation," Zhang Shaogang, a senior official with China's Ministry of Commerce, told reporters Thursday.

China's proposals speak to its aims to fulfill its role as host by boosting long-term growth in the APEC region, experts said.

China hopes to drive global economic recovery with its advocacy of FTAAP and GVC, but barriers remain in the Asia-Pacific region in light of the US Asia-pivot strategy, said Ji Qiufeng, a professor of international relations with Nanjing University.

An earlier report from the Wall Street Journal said the US has blocked China's efforts to push the FTTAP at the summit. China's commerce ministry has denied the story.

"The US has adopted a protectionist attitude as the 'real' sector of its economy strengthens, with manufacturing coming back to the US. It has more interest in the TPP than the FTAAP," said Bai Ming, a research fellow with the Chinese Academy of International Trade and Economic Cooperation.

Chinese President Xi Jinping is also expected to meet leaders from major APEC economies including the US, Russia and South Korea during the week-long APEC summit. There are expectations the bilateral meetings will help ease tensions caused by trade frictions and national security disputes.

"The US is not likely to openly oppose China's initiatives at the summit, although it has a different agenda to promote its own TPP. [The US] wants to use trade as a way to unite the Asia-Pacific region under its wing," said Ding Yifan, deputy director of Institute of World Development at the Development Research Center of the State Council.

But Ding believes that China's initiatives will still be supported by most APEC members despite the US passivity.

Indonesia recently openly declared its interest in joining the China-initiated Asian Infrastructure Investment Bank despite opposition from the US, he noted.

Editor: Zhao Wei
Add Comment
Please read our Terms of Service. Messages that harass, abuse or threaten others; have obscene or otherwise objectionable content; have spam, commercial or advertising content or links may be removed.