Prospect of China and Asia-Pacific Economic Cooperation

　　We often say China’s development can’t be independent from the Asia-Pacific region and development of Asia-Pacific region can’t bypass China too. Over the past three decades, developments of China and Asia-Pacific region accompanied and boosted each other. Both of them jointly kicked off a new stage of development of Asia-Pacific region. In the early 1970s and late 1980s, the Asia-Pacific region planned to establish the Pacific Economic Cooperation Council (PECC) when China just started implementation of reform and opening up policy. Common missions facing them connected China with all economies of Asia-Pacific region so China joined the PECC inevitably. In the early 1990s, China joined the Asia-Pacific Economic Cooperation (APEC), which didn’t only speed up the process of reform and opening up but also improved the economic cooperation between other economies in the Asia-Pacific region and China. In the early 21st century, after China succeeded in entering the WTO, its opening up ushered in a new era and interdependence between China and economies of Asia-Pacific region continued to escalate, generating an Asia-Pacific production network having influences on the globe. China’s development bolsters development of Asia-Pacific region as China has become the largest or most important trading partner and major investor of most economies of Asia-Pacific region. Interweavement of interests between China and Asia-Pacific region reaches an unprecedented high level.

　　Overall cooperation between China and Asia-Pacific economies boosts rapid development of the regional economy, helps the Asia-Pacific region to become a propeller of the world economy, and enables us to withstand austere ordeals of two great Asian and global financial crises and to drive the revival and development of the economy of Asia-Pacific region. Furthermore, the cooperation between them also brings about substantial profits to the Asia-Pacific region so such win-win and open cooperation is a precious experience for development of Asia-Pacific region.

　　Looking around the Asia-Pacific region, we are at the starting point of a new development stage now. On one hand, the economy of Asia-Pacific region still has a great development potential of continuous growth. On the other hand, the traditional economic growth mode of the Asia-Pacific region has been broken. All regional economies, whether developed or developing ones, are confronted with various changes and reforms, such as shifts of long-term export-oriented economic strategies, expansion of domestic consumption, more dependence on investment-driven economic development and cash-strapped impasses. Although they face different challenges, all economies have to shift their economic development methods, adjust economic structures, boost reform and innovation, release potentials of domestic demands, driving forces of innovation and vitality of the market, and provide internal driving forces for sustainable and sound economic development.

　　In China, we have decided to accelerate the transformation of development methods in order to prevent economic growth from dependence on excessive investment and exportation and make domestic consumption and innovation play more important roles in economic development. We speed up the structural adjustment through developing “new economy,” service sectors and urbanization. We will also more actively implement the strategy of opening up, enlarge the opening up of inland areas based on opening up of coastal regions and focus on establishment of the Silk Road Economic Belt and 21st century Maritime Silk Road; loosen the investment permission and grope for the all-round opening up mode based on experience of China (Shanghai) Pilot Free Trade Zone; accelerate the progress of “going abroad” and enhance the integration and international operating ability of global value chains; properly coordinate multilateral, bilateral and regional cooperation and speed up establishment of free trade zones.

　　In the Asia-Pacific region, all economies are taking measures to realize economic transformation and development, improve the quality and efficiency of economic development and solve different prominent contradictions and problems. They set forth new cooperative plans for interconnection of infrastructures, systems and people; and continue to conduct and expand cooperation in fields including green economy, blue economy and new energy. They are engaged in opening up and development, improvement of Asia-Pacific production network, enhancement of integration and prevention of fragmentation.

　　It can be seen reforms and adjustments of China and the Asia-Pacific region interconnect in concept, interweave in interests, complement mutually in content and benefit mutually in cooperation each other.

　　The new round of reform of China doesn’t only comply with interests of Chinese people but also accord with demands of the Asia-Pacific region and the world since it will enable China to expand its market’s absorbing capacity, increase the outbound investments, keep a relatively long-period high or medium speed of economic growth and maintain the opening world economic and free trade system. It is beneficial to settlement of unbalanced trade relations between both banks of the Pacific Ocean and improves the regional inclusion and sustainable growth. Meanwhile, the success of China’s new round of reform also counts on the deepening of Asia-Pacific economic cooperation as the Asia-Pacific region, as an increasingly cooperative and interest community, is facing the common challenge of development transformation. To realize the better and faster development in the region, first, it is necessary to make the common interests larger and have the dividends of development benefit all people of regional economies; second, great efforts need be made to strengthen the integration between industrial and value chains during structural adjustment, boost the leading formation of growth industrial clusters of the Asia-Pacific region around the world and continue to inject driving forces into the world economy; third, it is crucial to respect and borrow good experience of existing regional free trade arrangement, consolidate the cohesive force and push the integration of regional economy to a higher level; fourth, the establishment of interconnection should be promoted with an aim at benefiting all members on both banks of the Pacific Ocean and provide support for the free flow of regional productive elements.

　　We are not sure how long the new round of development transform will last but we know only cooperation can help us to make success as a region.

　　The regional partnership in the new period needs the top-level design. Currently, the Asia-Pacific region has become a community with members influencing mutually each other. We need improve the macro policy adjustment, exchange the experience in reform and growth policy and achieve the collaborating efficiency increase.

　　The regional partnership in the new period needs to stick to the opening regionalism. Various cooperative paths in the Asia-Pacific region are contingent on the regional diversities and can benefit each other. We must hold an open and actively supporting attitude to improving the more integration of the region.

　　The regional partnership in the new period needs the comprehensive improvement. We should regard the innovative development, reform and growth as a driving force, take the interconnection and intercommunication as a base and look on the higher-level integration of regional economy as a goal in order to push forward the three work.

　　The regional partnership in the new period needs exploration and innovation. We should dauntlessly explore the new concept, vision and path of economic cooperation and governance of the Asia-Pacific region so as to create a cooperative and win-win path and form a community with common interests.

　　The regional partnership in the new period needs the financial cooperation. First, it is necessary to improve the monetary cooperation and jointly safeguard the regional financial stability and monetary safety. Second, great efforts need be made to increase the fundraising channels to support the construction of infrastructures and the focus should be put on the energy, transport, telecommunication, urban construction and other fields. The Asian infrastructure investment bank proposed by China is an important effort in this aspect. Third, it is required to further improve the capital market, especially development of direct fundraising, in a bid to better serve the real economy; it is necessary to enhance the cross-border financial trade and settlement mechanisms and promote the interconnection of capital markets in the region; it is crucial to establish the regional rating institutions in order to provide the financial services for the capital market. Fourth, it is necessary to expand the use of local currency with an aim to drive the intraregional trade and investment.

　　(The writer is vice chairman of the 12th National Committee of the Chinese People’s Political Consultative Conference and this paper is the speech delivered by Chen Yuan at the 22nd PECC General Meeting on September 10, 2014.)