Forming an FTA based on the Belt and Road Initiative would help China fulfil many of its goals, as China would become the economic anchor for the FTA, so the renminbi could become its currency anchor, making it a major trading currency.

The Belt and Road Initiative is likely to deliver more sustainable growth to all economies along the routes. Asia's economies have huge infrastructure requirements over the next decade, as they seek to move up the value chain while absorbing fast-growing populations. China can pave the way for greater growth by helping to finance high-quality roads, railways, ports and other infrastructure. But if a Belt and Road FTA is established, the benefits would be even greater.

Regardless of the framework, China needs to accelerate reforms and integrate its economy further with the rest of the region and world. This means exposing its industries to more competition and giving foreign investors greater onshore access. The TPP promotes a high standard for such integration among its members, and China will also need to step up.

Trade agreements are generally anchored to one economic powerhouse, which tends to set the rules. While the Belt and Road Initiative provides the perfect opportunity for such an FTA, the TPP shows the potential danger to China of not taking such an initiative.

As China enters a new economic era, its ambitions for sustainable economic growth depend partly on taking a leadership in free trade. To successfully move up the value chain and become a consumer of goods made elsewhere, the time has come for it to take a lead.

The author is managing director and regional head of transaction banking, Standard Chartered Bank in Greater China and North Asia.