An unexpected effect of the US-China trade war has been an apparent acceleration of the process to forge an Asian trading bloc that does not include United States, according to Deloitte China’s chief economist Xu Sitao.
After a renewed push from China, an initial Regional Comprehensive Economic Partnership (RCEP) agreement was finally reached in November 2019 after six years of talks, with the deal that would create the world’s largest free trade bloc possibly being signed in November 2020, according to China’s Ministry of Commerce.
It involves the 10-member Asean bloc plus Australia, China, Japan, New Zealand and South Korea, with India eventually deciding not to participate.
“The trade war has brought a positive effect … the RCEP, where you’d have previously thought would require many years to negotiate for. But unexpectedly, an agreement has been reached,” said Xu in Hong Kong this week, a day before the US and China signed their long-awaited phase one trade war deal. “Overall, everyone is concerned about economic growth.”