Over the weekend one of the largest free trade deals in history was signed. The Regional Comprehensive Economic Partnership (RCEP), signed by 15 countries, has taken 6 years to conclude. China stepped into a leadership role after the US pulled out under Donald Trump. The US had originally planned to be part of this agreement under Barack Obama.
Economists believe that this trade deal could add $200bn to the region's economy by 2030. For the first time it brings together China, Japan, Australia, New Zealand and South Korea’s economies together. Combined with 10 other countries it will progress the region towards a coherent trading zone (much like the EU).
This pact is one of many reasons why China is so bullish on its economy. It expects to double its economy to nearly $30 trillion in the next 15 years, overtaking the US (it has already doubled 5x since 1980). For this to happen China would need to sustain an annual growth rate of 5%, which is not unrealistic given its track record. However, some economists think this is unrealistic, with China potentially contracting during this time. The debate will continue but in the meantime, the RECP will give them a strong running chance at achieving their goal.