In a significant move that could shift the balance of power in the Asia-Pacific region, China has formally applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The pact, initially proposed by the U.S. to counter China’s growing economic influence, was abandoned by President Donald Trump in 2017. Now, China’s bid marks the latest step in its efforts to integrate further into the global trade system, even as it faces mounting geopolitical challenges.

The CPTPP, a trade agreement among 11 countries, was designed to foster economic ties in the region, with the U.S. originally at its helm. After Trump’s withdrawal, Japan led the revised agreement to completion in 2018. Now, China’s move to apply for membership in the pact could significantly impact the economic landscape in Asia, where Beijing is a dominant player and the top trading partner for many countries.

The application comes after years of behind-the-scenes discussions, particularly following President Xi Jinping’s 2020 announcement of China’s interest in joining. While the application is expected to provoke concerns in Washington, no indication has emerged from President Joe Biden’s administration about rejoining the agreement.

A Geopolitical Calculus

Hosuk Lee-Makiyama, director of the European Centre for International Political Economy in Brussels, notes that China’s decision to apply is a “rational calculation,” with the Chinese market driving much of the global economic recovery. As Lee-Makiyama points out, the cost of rejecting China’s application could be high, making it a strategic decision for both China and the countries in the pact.

The move adds another layer of complexity to the region’s geopolitical landscape. Countries like Australia, Japan, New Zealand, and Singapore, which are close allies of the U.S., are also members of the Regional Comprehensive Economic Partnership (RCEP)—a trade agreement negotiated by China. Despite their longstanding ties to the U.S., these nations share strong economic interests with China, adding further nuance to the decision on China’s application to the CPTPP.

Taiwan’s Competing Bid and Rising Tensions

While China’s application takes center stage, Taiwan has also expressed interest in joining the CPTPP. However, Taiwan’s bid is complicated by China’s opposition to its participation in any international organization. Taiwan has been in discussions with CPTPP members and has expressed a willingness to apply once a consensus is reached among members.

At the same time, tensions between China and Japan, the largest economy in the CPTPP, have escalated. With territorial disputes, military tensions, and China’s increasing military presence in contested regions, Japan faces a delicate balancing act in considering China’s application.

The Strategic Implications for Global Trade

China’s sudden application to join the CPTPP comes just after a trilateral defense pact was announced between the U.S., Australia, and the U.K. to counter China’s growing military might. This defense alliance, which China has strongly criticized, will now intersect with China’s efforts to gain access to the influential trade bloc.

Australia, however, remains deeply divided over China’s accession. Despite a free trade agreement with China, ongoing trade disputes, including tariffs and export bans, have strained relations. Australian Trade Minister Dan Tehan has stressed that all 11 CPTPP member nations must agree for China’s negotiations to begin, and noted that Australia has not held official talks with Chinese counterparts for more than a year.

The Road Ahead: Challenges and Opportunities

China’s formal application to join the CPTPP signals its intent to play a larger role in global trade. However, whether it will be able to meet the high standards set by the agreement remains a question. Issues surrounding labor standards, state-owned enterprises, e-commerce, and data flow have long been barriers to China’s entry.

Some experts are optimistic about China’s potential success, especially given the growing importance of the Chinese market to the CPTPP members. However, others, including former U.S. trade officials, express skepticism, citing China’s economic practices and lack of alignment with the free-market principles of the pact.

As China moves forward with its application, the process is expected to take years. Meanwhile, the United Kingdom, the first country to apply to join, aims to complete its talks by the end of 2022. If China succeeds in joining, it would make the CPTPP the largest free-trade agreement in history, with a combined economic value of approximately $13.5 trillion, or 13% of global GDP.

Ultimately, China’s participation in the CPTPP could reshape trade dynamics in Asia and beyond, further solidifying China’s position as a global economic leader.