If China joins the TPP, will Vietnam would lose its advantages?

VietNamNet Bridge - The possibility of China becoming a member of the Trans Pacific Partnership (TPP) Agreement remains open. Experts say China’s membership, to some extent, would affect Vietnam.

Vietnam, TPP, TPA, China

China will join TPP, sooner or later

According to Dr. Le Van Sang, former deputy head of the Institute for the World Economics and Politics Research, the US has not invited China to join TPP but does not oppose the country’s membership. Meanwhile, Chinese press report that Beijing may consider joining the free trade area.

“Both the US and China remain inconclusive about Chinese membership. But I think China would join TPP, sooner or later,” Sang commented.

Analysts have every reason to believe that TPP would be inked soon, which means China may not join TPP from the very beginning. However, the door to TPP remains open for China.

According to Bui Ngoc Son, a renowned analyst, in the past, the US did not want to admit China into TPP for some reasons. First, the US did not welcome the Chinese foreign exchange policy. Second, rising China may overcomE the US plan to increase its influences in Asia Pacific.

However, though wanting to establish a free trade area with no China, the US has no reason to oppose the presence of China in TPP.

What will happen if China joins TPP? The strategy China has been following for the last years is that it tries to prevent other countries to benefit in its land. 

However, the analysts both affirmed that China, if joining TPP, will have to change its ways.

What will happen if China joins TPP?

An economist said that if China stays outside TPP, it will be put at a disadvantage as TPP members, or China’s rivals, can do business with the US and benefit from the world’s largest economy. Meanwhile, if China joins TPP, its products sold among TPP member countries will be exempted from tax.

If China joins TPP, its great advantages will be fully exploited. If not, it will face big difficulties because of increasing labor costs.

Meanwhile, the Chinese TPP membership, to other TPP member countries, would not be good news, because they will have to share benefits with China.

As for Vietnam, the great benefits it expects from TPP membership would shrink with China’s presence, because the Vietnamese economy is smaller than Chinese and is quite similar to Chinese. 

The two countries have similar export products and therefore, they compete with each other. If China can also enjoy tax preferences like Vietnam, Vietnamese products will have no more advantages over Chinese.

Dat Viet

Vietnam, TPP, TPA, China