Why China needs to champion free trade

In the decade to come, China has a huge opportunity to seize the initiative and become an architect of free trade.

Anchoring new free trade areas would help it make the transition to a more sustainable growth model, based on consumption rather than low-cost exports, a goal set out in its 13th Five-Year Plan (2016-20). It would also help with the country's other economic goals - namely internationalization of its currency and liberalization of capital account regulations.

China has an opportunity to make the Belt and Road Initiative the foundation of a huge East-West FTA, with itself as a major consumer and lower-cost locations as manufacturing centers. Spanning 65 countries across Asia, the Middle East and West Africa and Europe, the Silk Road Economic Belt and 21st Century Maritime Silk Road aim to create two huge trade corridors that would encompass a total population of 4.4 billion and 40 percent of the global GDP. Together they would rival the US-led Trans-Pacific Partnership Agreement in size. Agreed in October 2015, the TPP covers 12 Pacific Rim countries, including the US and Japan, which account for 40 percent of world trade. It is the biggest trade agreement launched since the mid-1990s.