President Obama plays the 'China Card'. Is he correct in asserting the U.S. [View all]

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can "write the rules on trade"?

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Xi Jinping, the Chinese president and head of the Communist Party, is making a parallel pitch — but rooted in a very different strategy for gaining global influence. Mr. Xi has essentially shrugged off the question of whether his nation, the world’s second-largest economy, will join the pact. Instead, he has picked off American allies like Britain, Germany and South Korea to join, against the administration’s wishes, the Asian Infrastructure Investment bank, a project started by China in part to keep its own state-owned firms busy building roads, dams and power plants around Asia.

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America’s strategy since the 1990s, when Bill Clinton wooed Republican votes to get China into the World Trade Organization, has been a straightforward one: Entice China into institutions that operate according to Western standards of trade rules, labor practices and the protection of intellectual property, gradually changing the way a rising power rises. Mr. Clinton made that case in visits to Beijing, arguing that if China opened its doors to trade, new ideas and the internet would inevitably pressure its leaders toward democracy and freer expression.

It was a view that, in retrospect, overestimated American influence and underestimated the degree to which the Chinese believed they could amend the global order to suit their own economic interests. So while Mr. Obama plays the China card to sell the accord in the United States, the Chinese are pursuing their own course.

China has been excluded from the negotiations on the trade deal because it has been unwilling to sign on, so far, to the wide-ranging reforms of its economy required of all members. It could join later on — and Chinese officials have left open that possibility, as have nations like South Korea. But for now, China seems in no rush. Just as it created an infrastructure bank to suit its own ambitions, it is assembling trade agreements whose rules it can write by virtue of the huge size of its market.

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“The Chinese government knows the TPP is a major attempt by the U.S. to win back economic leadership in the region,” Mr. Shi said. “China also knows the Asia Pacific region is such a wide region, so you can have two stages. One is led by the U.S., which is pushing the TPP. The other is dominated by China.”

Mr. Shi said China was not worried about the TPP because Asia was a vast enough region to allow for multiple trade agreements. “This is far from a zero-sum game,” he said. “In the future, both countries will find places of cooperation as well as competition.”

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http://www.nytimes.com/2015/05/13/us/politics/as-obama-plays-china-card-on-trade-chinese-pursue-their-own-deals.html?_r=0