By the end of June, the Regional Comprehensive Economic Partnership (RCEP) will be officially implemented for half a year. In half a year, RCEP’s “circle of friends” continued to expand. From January 1 this year, the RCEP will come into effect for 10 countries including Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, China, Japan, Australia and New Zealand. It will take effect for South Korea on February 1 ，effective March 18 for Malaysia and May 1 for Myanmar. From January to May, China’s trade with ASEAN reached $371.21 billion, up 10.2% year-on-year; trade with South Korea and New Zealand also achieved growth.
The RCEP has now entered into force in 13 of its 15 signatories, delivering more dividends to businesses and consumers in its member countries.
Both businesses and consumers benefit
——After RCEP takes effect, the immediate tariff-free ratio between China and ASEAN, Australia and New Zealand will exceed 65%, the immediate tariff-free ratio with South Korea will reach 39% and 50%, and the immediate tariff-free ratio with Japan will reach 25% and 57%.
RCEP is a large-scale regional trade agreement jointly promoted by ASEAN and China, Japan, South Korea, Australia, New Zealand and other free trade partners. Compared with regional trade groups such as the EU and CPTPP, RCEP is by far the largest free trade zone in the world in terms of population, economic aggregate, and trade in goods. RCEP adopts the rules of origin accumulated in the region, and the total number of products that will eventually be exempt from tariffs for trade in goods will exceed 90%. At the same time, the negative list is used to promote investment liberalization and improve the transparency of investment policies.
In the past six months, many enterprises in traditional foreign trade provinces have fully benefited from dividends such as preferential tariffs, simplified customs clearance, and facilitation of trade and investment brought about by the entry into force of RCEP.
In Zhejiang, within the first month after RCEP came into effect on January 1, the province issued 5,190 preferential certificates of origin, with a value of more than 240 million dollars, and tariff reductions for related enterprises exceeded 13 million yuan. From January to April, RCEP provided Zhejiang enterprises with more than 40 million yuan in import and export tax incentives, and Zhejiang Province’s imports and exports to other RCEP member countries increased by 10.5% year-on-year.
Ningbo Shidannu Import & Export Co Ltd. successfully issued a RCEP origin declaration for a batch of apparel products exported to Australia in January. The company’s staff told reporters that Australia and ASEAN countries among the RCEP member countries are the company’s important overseas export markets. “This statement is Ningbo’s first RCEP origin statement, which enables the company’s goods to enjoy duty-free treatment in the importing country. It greatly enhances the company’s autonomy and flexibility in foreign trade business.”
Industry development ushered in more opportunities. In Guangdong, with the entry into force of RCEP, market access has been relaxed, and more products have poured into the international market, prompting further transformation and upgrading of Guangdong ceramic enterprises. Zhu Zhifang, head of customs affairs of Guangdong Owenlai Ceramics Co., Ltd. Introduced that the company has used new technologies of tactile technology in a variety of new products independently developed to open up the RCEP market. “Since this year, the company has applied for the RCEP certificate of origin for Korean ceramic tiles 9 copies, the value of the goods exceeds 2.58 million yuan, and it is expected to enjoy a tariff reduction of more than 100,000 yuan.”
RCEP also brings a richer consumption experience to Chinese consumers. On the day RCEP came into effect, a large number of products were exempted from tariffs. Among them, the immediate tariff-free ratio between China and ASEAN, Australia and New Zealand exceeds 65%, the mutual immediate tariff-free ratio with South Korea reaches 39% and 50%, and the mutual immediate tariff-free ratio with Japan reaches 25% and 57%.
“Japanese home appliances, Southeast Asian fruits, Australian milk powder… People who often buy imported goods can feel that in the past six months, there have been more and more high-quality imported goods, and the prices of some goods have dropped.” said Ms. Chen, a white-collar worker in Beijing. According to the relevant person in charge of the Ministry of Commerce, more foreign high-quality goods have entered the Chinese consumer market under the incentives of the RCEP taking effect. At the same time, tariff-free access reduces the cost of imported goods, and coupled with high-level trade facilitation measures, consumers can buy imported goods at a more desirable price and at a faster speed.
“Combination Boxing” Seize the RCEP Opportunity
——China sorts out 701 binding obligations and 170 encouraging obligations of RCEP, and requires all localities to fulfill RCEP commitments with high standards, and guide industries and enterprises to adapt to a more open environment and more adequate competition in regional markets.
“Since this year, the value of our exports to Japan has increased by nearly 1/4 compared to last year. Before and after the implementation of RCEP, Gongbei Customs organized a number of special policy seminars, which provided great help for us to further expand the Japanese market.” Li Hui, head of customs of Changxing Special Materials (Zhuhai) Co., Ltd. Introduced that since this year, the company has obtained 44 certificates of origin issued by Gongbei Customs, with over 31 million yuan of goods enjoying favourable export, “Not long ago, a batch of high-performance paints worth nearly 410,000 yuan was sent overseas, and the company could enjoy about 40,000 yuan in the importing country tariff concessions.”
Thanks to the measures taken by the local customs department to stabilize and benefit enterprises, traditional advantageous products such as chemical materials, textiles and garments, and plastic products in the Pearl River Delta region have benefited from RCEP to further consolidate and expand overseas markets. From January to May, Gongbei Customs issued a total of 1,165 RCEP certificates of origin exported to Japan, with a visa amount of nearly 340 million yuan. Gongbei Customs promotes convenient modes such as “self-service printing” and “smart auditing” of certificates of origin, and provides “shared” printing services for enterprises in the jurisdiction. From January to May, enterprises in the customs area self-printed about 30,000 certificates, an increase of over 80% year-on-year.
Over the past six months, various localities and departments have made “combination punches” to release the RCEP policy dividends.
At the beginning of the year, the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the People’s Bank of China, the General Administration of Customs, and the State Administration for Market Regulation issued the “Guiding Opinions on High-Quality Implementation of RCEP” to guide local governments, industries and enterprises to adapt to the region after RCEP takes effect. A more open market environment and more adequate competition. Commerce, customs and other departments have held a large number of training and publicity activities nationwide to help enterprises seize the opportunity of RCEP and expand the export of competitive products and the import of high-quality goods. In April, the “National RCEP Series Special Training” sponsored by the Ministry of Commerce and focused on enterprises was launched. The training content includes RCEP overall situation and main content introduction, RCEP trade in goods market access and interpretation of rules of origin, RCEP trade in services, investment market access commitments and rules interpretation, as well as opportunities, challenges and suggestions faced by relevant industries in China.
Various regions have also continued to do a good job in publicity and services to speed up the integration process of market players and RCEP. In Jiangxi, 6 departments including the Provincial Department of Commerce recently issued opinions, proposing 7 aspects and 21 key tasks, including vigorously developing trade in goods, accelerating the development of new forms of foreign trade, and deepening two-way investment cooperation, in order to further connect with RCEP. In Guangxi, the State-owned Assets Supervision and Administration Commission of the Autonomous Region, the Department of Commerce and other departments re-established the Guangxi Supply Chain Service Group to build a commodity supply chain platform serving RCEP.
Experts pointed out that China has contributed a lot to the release of RCEP policy dividends. “China regards RCEP as an important platform for deepening institutional opening, and has sorted out 701 binding obligations and 170 encouraging obligations of RCEP, requiring all departments and localities to fulfill RCEP commitments to a high standard, and promoting the formation of a national top-to-bottom comparison of RCEP. A good atmosphere for deepening the reform of high-standard agreements,” said Gu Xueming, dean of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce.
China actively promotes in-depth integration with RCEP and actively fulfills its commitment to opening up, which also demonstrates its determination and sincerity to continue to expand opening up. “In the field of trade in services, compared with the 100 sectors committed when China joined the WTO, China has increased its commitment to opening up 22 sectors in RCEP. Among the sectors that have been opened up according to WTO commitments, 30 sectors have increased openness commitment levels in the RCEP. Wang Shouwen, vice minister of commerce, said.
“Win-win” becomes the key word of RCEP
——In the first quarter of this year, Thailand’s total trade with RCEP partners increased by 23% year-on-year; Japan’s total trade with RCEP partners was nearly $200 billion, accounting for 47.6% of Japan’s overall foreign trade; South Korea’s March exports record biggest increase since trade statistics began in 1956.
In the past six months, RCEP has also benefited other countries in the region a lot, and “win-win” has become the key word of RCEP’s “circle of friends”.
RCEP brings a broader market to Thai fruit farmers. “Golden pillow durian is very popular in China, and it is also the main variety we plant.” Shirapong, who runs a durian orchard in Chanthaburi, Thailand, said that she will pay more attention to the cultivation of high-quality varieties to meet the diversification of Chinese consumers need. Since the beginning of this year, Thai companies have greatly reduced the time and cost of exporting agricultural products to China. From the fruit train to the “Durian Express”, Thailand-China trade has continued to grow.
In the first quarter of this year, Thailand’s total trade with RCEP partners exceeded 2.7 trillion baht, a year-on-year increase of 23%, of which processed agricultural products increased by 43%. During the same period, Vietnam’s trade with China, Japan, South Korea and other ASEAN countries grew by more than 10%; the total trade volume between Japan and RCEP partners was nearly $200 billion, accounting for 47.6% of Japan’s overall foreign trade, an increase of 11.5%. Since RCEP came into effect for South Korea on February 1 this year, South Korea’s exports in March reached $63.48 billion, an increase of 18.2% year-on-year, the largest increase since South Korea’s trade statistics began in 1956.
Gu Xueming analyzed that RCEP has reduced the tariffs on trade goods of countries in the region, and through high-level economic and trade rules, has had a positive effect on regional trade and investment and the value chain of the industrial chain, supply chain, and value chain. At the same time, RCEP also encourages enterprises to rely on the comparative advantages of each member state to carry out cross-border integration, optimize the layout of regional industrial chains and supply chains, and improve comprehensive productivity and product competitiveness. “During this gradual adjustment process, all member states have the opportunity to participate in and continuously improve their position in the regional value chain with their own advantages, and promote the formation of a mutually beneficial and win-win regional industrial chain supply chain cooperation pattern.”
Looking forward to the second half of the year, the RCEP dividend will continue to be released, further enhancing regional industrial cooperation, strengthening the regional industrial chain and supply chain, and helping to maintain the stability and quality of China’s foreign trade.
In May, the growth rate of China’s import and export rebounded to 9.6%, and the foreign trade sector showed a recovery growth momentum. Ministry of Commerce spokesperson Shu Jueting said that the increase in China’s free trade agreement partners has created favorable conditions for achieving the goal of maintaining stability and improving foreign trade this year.