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FEATURE STORY: China's Strategic Economic Partnerships
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China's Strategic Economic Partnerships

By Harold Murphy


BT 201705 Feature 01In 2013 China overtook the United States to become the world's largest trading nation. As China rises, strategic economic partnerships have become a prominent instrument for establishing a prosperous environment for its growing economy. Beijing has already established strategic partnerships with a dozen foreign countries and three international organizations since the early 2000s. These agreements are viewed as China's embrace of globalization and multilateral diplomacy. In this article, we will give an overview of the most important partnerships between China and other countries.


Asia

China built a 'strategic partnership of equality, mutual confidence and mutual co-ordination in the 21st century' with Russia in 1996. This was followed by a 'collaborative partnership for the 21st century' with South Korea in 1998 and a 'strategic and cooperative partnership for peace and prosperity' with India in 2005.


After the dissolution of the Soviet Union in 1991, China and Russia established diplomatic relations. In 1996, the two countries established the "strategic partnership of equality, mutual confidence and mutual co-ordination in the 21st century". By the end of 2013, China and Russia had further strengthened their bilateral relations. Chinese and Russian presidents meet with each other every year and there is a hotline for direct communication between them. The premiers as well as the heads of parliament of both countries also meet annually.

BT 201705 Feature 02China's president Xi Jinping at the Victory Day Parade in Moscow, 2015, source: nationalinterest.org


Russia and China have similar positions on regional and global issues and Moscow is Beijing's key ally in its effort to maintain a strategic partnership. Russia now provides significant amount of China's energy needs while China provides financial guarantee and loan to Russia without announcing the same explicitly.


Other partnerships in Asia include the Regional Comprehensive Economic Partnership (RCEP). This is a proposed free trade agreement (FTA) between the ten-member states of the ASEAN (Association of Southeast Asian Nations) and the six states with which ASEAN has existing free trade agreements (Australia, China, India, Japan, South Korea and New Zealand).


Negotiations for RCEP were formally launched in November, 2012, at the ASEAN Summit in Cambodia. RCEP is widely viewed as an alternative to the Trans-Pacific Partnership (TPP) trade agreement, which excludes China and India and includes several nations of the Americas. RCEP member states would account for a population of 3.4 billion people with a total Gross Domestic Product of $21.4 trillion in 2016.


United States of America

At $17.419 trillion, the United States boasts of being the largest economy in the world and is China's largest trading partner. Last year the total value of bilateral trade between the two countries was $590.4 billion, with U.S. imports from China valued at $466.7 billion and U.S. exports to China valued at $123.7 billion.

BT 201705 Feature 03Chinese Vice-Premier Wang Yang with U.S. Secretary of State John Kerry at the opening session of the U.S.-China Strategic and Economic Dialogue in Washington, source: frontline.in


The U.S. - China Strategic and Economic Dialogue (S&ED) discusses a wide range of regional and global strategic and economic issues between China and the United States. The establishment of S&ED was announced on April 1st, 2009 by then U.S. President Barack Obama and Chinese President Hu Jintao.


The upgraded mechanism replaced the former Senior Dialogue and Strategic Economic Dialogue started under the George W. Bush administration. This format is such that high-level representatives of both countries and their delegations will meet annually at capitals alternating between the two countries. However, when George W. Bush took office in 2001, Sino-US relations took a step back. At a meeting with the press in Shanghai in 2001, Jiang and Bush expressed only the intention to build a 'constructive relationship of cooperation'. The word 'strategic' has not been included in official documents ever since. In 2013, Chinese and American leaders agreed to build a 'New Type of Major-Power Relationship' to guide the Sino-US relationship.


European Union

Since EU and China have established their strategic partnership in 2003, both countries have furthered their cooperation by developing agreements in key areas like politics and economics. Economic and especially trade cooperation have been cornerstones in partnership between EU and China. However, this partnership is gradually changing since both sides are facing slower economic growth, especially the European Union. Other European countries having a partnership agreement with China include France, Germany, Italy, UK in 2004, Spain and Portugal in 2005, Greece in 2006, Denmark in 2008, Serbia in 2009, Ukraine and Poland in 2011, Ireland in 2012 and Belarus in 2013.


Africa

Chinese-African relations became an issue of increasing importance leading up to the 2006 China-Africa Summit in Beijing. Nevertheless, strategic partnerships have already been signed with South Africa (2004), Nigeria (2005), Angola (2010), Algeria (2014) and the African Union (AU, 2006). Only with South Africa and Algeria did China sign a "comprehensive" strategic partnership in 2010 and 2014 respectively.

BT 201705 Feature 04Chinese President Xi Jinping arrives at Julius Nyerere International airport in Dar es Salaam, Tanzania, source: foreignpolicyjournal.com


South America

Brazil was the first country to sign a strategic partnership agreement with China in 1993, but it was not until 2006 and 2008 respectively that the High-Level Committee on Coordination and the Strategic Dialogue started its work. Other countries in South America which have established agreements with China include Venezuela (2001), Mexico (2003), Argentina (2004), Peru (2008) and Chile (2012).


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