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Recent events and developments in China promoted the idea that China is considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The country prepares fundamentally to opening-up reforms even further. This is supported by the news that on Wednesday, December 30, 2020, the negotiations between China and the European Union (EU) on Comprehensive Agreement on Investment (CAI) have been successfully concluded, making China one step closer to joining the CPTPP as well.
Based on the remarks made at China’s annual Central Economic Work Conference in December 2020, joining the CPTPP is at the head of the agenda as the next step of the opening-up reforms. It is important to notice that the Investment Agreement between China and EU covers areas such as labor rights and State-owned enterprises’ business practices, which also constitute an important part of the CPTPP. China has become more accommodative and flexible in policy negotiations in areas such as market principles and labor rights.
Given the stage of China’s economic development and the pace of growth, the partnership agreements align the objectives of the country with agreements’ provisions such as investment liberalization and facilitation of economic globalization. Despite certain challenges associated with applying these standards domestically, the country is expected to benefit tremendously from its close ties with both Asia-Pacific and EU economies. Some of the measures already implemented include intellectual property rights protection changes and the Foreign Investment Law. Additionally, China has made service sectors such as R&D, consulting, education, and senior care services accessible for outside investment, and the country now applies stricter standards in e-commerce and intellectual property protection.
The World Bank report published on December 23rd, 2020 has underlined the importance for China to join the CPTPP. The World Bank suggests that China’s entry in CPTPP “could provide an anchor for additional reforms, as China's WTO accession did almost 20 years ago”. To find out more about what China’s signing of CAI has led to, as well as what the potential entry in CPTPP could provide for your business in China, feel free to contact us at info@phcadvisory.com.
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