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RCEP provides a very good and timely prospect to jump-start the two important engines of growth, export and investment, said Piriya Khempon, former ambassador of Thailand to China, while addressing the Regional Comprehensive Economic Partnership Media & Think Tank Forum via video on Sunday.
In the region, RCEP will facilitate and ease outflow of exports and expand market access among members. It will enhance other economic growth engines, such as the flow of investment and service industries, he said.
RCEP will add value to this free trade agreement in further expanding market access among 15 member countries, the former ambassador added.
There is no doubt that bold action must be taken globally to reduce greenhouse gas emissions. It requires political will, international cooperation, good business models and innovation to reach the goal of the policy agreements, said Hege Araldsen, consul general of Norway in Guangzhou, Guangdong province, while addressing the Regional Comprehensive Economic Partnership Media & Think Tank Forum on Sunday.
She noted the crucial importance of cooperation and policy consensus in the blue economy, as the challenge of climate change is becoming increasingly pressing.
Through partnerships and mutual investments, China and Norway can combat climate change and enhance climate adaptation while increasing prosperity through trade and investments, she added.
China and the Association of Southeast Asian Nations have fostered diplomatic and economic ties for decades, with positive results, said Keo Puth Rasmey, former deputy prime minister of Cambodia, while addressing the Regional Comprehensive Economic Partnership Media & Think Tank Forum via video on Sunday.
The success of these relationships encourages all nations involved to continue pursuing cooperation projects, including further implementation of the China-ASEAN comprehensive strategic partnership, he said.
Making joint efforts to achieve common development is "even more necessary" than in the past for Asian countries, which are facing critical challenges amid global uncertainty, the Cambodian politician added.
RCEP has further expanded the scope and intensified the depth for regional cooperation, which was already quite intense before RCEP, said Bert Hofman, director of the East Asian Institute at the National University of Singapore while addressing the Regional Comprehensive Economic Partnership Media & Think Tank Forum via video on Sunday.
RCEP is a very significant agreement, he said.
The RCEP Media & Think Tank Forum, "Working Together for Common Development" was held on Sunday.
The event was jointly organized by the Publicity Department of the Communist Party of China Hainan Provincial Committee, China Daily, the Chinese People's Institute of Foreign Affairs and the Hainan-based China Institute for Reform and Development.
Let's hear what some of the guests had to say.
The world is beset by global changes and a pandemic, both unseen in a century. Therefore, regional and global cooperation becomes more important than ever. As an active and critical player on the world stage, China is committed to enhancing international synergy for coordinated development. The Regional Comprehensive Economic Partnership agreement, which aims to broaden and deepen ASEAN's engagement with China, Australia, Japan, South Korea and New Zealand, reflects a determination by the participants to achieve common development.
European businesses are well-placed to help China peak carbon emissions before 2030 and push toward carbon neutrality in 2060. The report "Carbon Neutrality: The Role of European Companies in China's Race to 2060" finds 67 percent of European companies operating in China are already pursuing carbon neutrality, and 40 percent have established China focused decarbonization teams, many of which report directly to the board.
According to World Bank research released in February, Cambodia ranked third, after Vietnam and Malaysia, in revenue increase after the RCEP agreement entered into force. The implementation of RCEP is of great significance to the region and the world and will give a tremendous boost to post-COVID-19 economic recovery. Indeed, all this growth has been achieved despite the effects of the crisis still being felt by many economies worldwide.
Nepal is not a part of the Regional Comprehensive Economic Partnership but the concept and principle of regional cooperation and trade also apply to South Asia. Countries in South Asia can learn from the success of RCEP, especially ASEAN's and economic links with China for mutual economic growth.
Making joint efforts to achieve common development is "even more necessary" than in the past for Asian countries that are facing common and critical challenges amid global uncertainty, a Cambodian politician said on Sunday.
While addressing the Regional Comprehensive Economic Partnership's Media & Think Tank Forum via video, Keo Puth Rasmey, former deputy prime minister of Cambodia, said that Asian states have had good relations and trade with one another, developing in peace and harmony.
"Unlike yesterday, we now face common, critical, complex challenges with vital internal issues," he said. "The contribution of individual interests to improve collective wealth … is more essential than ever."
He said that China and the Association of Southeast Asian Nations have fostered diplomatic and economic ties for decades, with positive results. The success of these relationships encourages all nations involved to continue pursuing cooperation projects, including further implementation of the China-ASEAN comprehensive strategic partnership.
The partnership, a milestone in China-ASEAN relations, was established in November at a special summit celebrating the 30th anniversary of the relations.
During that summit, China proposed new suggestions for making the relations even stronger. It called for pursuing dialogue rather than confrontation, building partnerships instead of alliances and jointly developing a safe, beautiful and prosperous world.
The proposal "is a blueprint for China-ASEAN relations" that serves to promote the China-ASEAN comprehensive strategic partnership and to enable Asian nations to better choose the paths to prosperity that suit them.
China's imports and exports to ASEAN reached 1.35 trillion yuan ($202.2 billion) during the first quarter of this year－an increase of 8.4 percent year-on-year, accounting for 14.4 percent of China's total foreign trade, according to customs data.
During the period, trade between China and ASEAN accounted for 47.2 percent of China's foreign trade with RCEP partners, the data showed.
But as conflicts threaten the world, the China-ASEAN comprehensive strategic partnership needs more long-term creative efforts to be sustainable, Rasmey said.
He added that the China-ASEAN comprehensive strategic partnership, which emphasizes economic growth, cooperation and partnership, "is poised to become stronger".
Cambodia and China have a close connection, and both sides attach great importance to the common interests and cohesion of the region. The Cambodian government is devoted to contributing to the building of a united and stronger Asia to not only preserve its place in the complex world of tomorrow, but also to play a role in the future of the world, Rasmey said.
The tangible growth momentum generated by the Regional Comprehensive Economic Partnership agreement will help build advanced integrated industrial chains and grow a colossal consumption market in the Asia-Pacific region in the coming years, government officials and corporate executives said.
In the face of a complex global business environment, they said the pact allows member countries to choose solidarity and cooperation when facing challenges such as the COVID-19 pandemic and rising commodity prices, instead of resorting to conflict or confrontation.
With tariff cuts put in place by the RCEP and manufacturers' willingness to upgrade the technology in their products, businesses in China, including multinational companies, will be in an advantageous position to further expand their market presence in the Asia-Pacific region, said Wang Lingjun, vice-minister of China's General Administration of Customs.
Guo Tingting, assistant minister of commerce, said as opening-up is a basic national policy, deepening regional economic cooperation will provide more fresh opportunities for the development of foreign-funded enterprises in China.
Taking effect in January, the implementation of the megapact has not only brought tax cuts to foreign importers, but will also encourage China-based manufacturers to ship more goods to other RCEP markets in the coming years.
"Supported by the rich resources of supply chain in China, we can better meet the needs of local consumers and export our innovative products to other parts of the world, including the RCEP economies," said Vivian Tu, marketing leader of Philips Domestic Appliances Greater China.
"We will continue to create innovative products to expand our global manufacturing network and drive the growth of smart manufacturing in China," she said, adding the Dutch brand will expand its research team in Suzhou, Jiangsu province, to focus on advanced technologies such as robotics, internet of things and artificial intelligence over the next five years.
Exporting products made at its plants in China to RCEP countries－including Australia, New Zealand and members of the Association of Southeast Asian Nations-Titus Yu, vice-president and general manager for North Asia of the United States-based residential and commercial air conditioning maker Carrier HVAC, said it will continue to focus on investing in innovation and manufacturing capacities across China to support local and foreign customers.
Thanks to favorable terms in areas including tariffs and a complementary trade structure, China's foreign trade with the other 14 RCEP members grew by 6.9 percent yearly to 2.93 trillion yuan ($460 billion) in the first quarter, data from China's General Administration of Customs showed.
Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said the greatest benefit for trade businesses is that the RCEP agreement is generating broader market space via interaction among participating countries. This will help improve the long-term confidence of trade-businesses in China.
The RCEP agreement has brought down tariffs, cut operational costs and streamlined procedures for many trade businesses in China. It has also widened the country's market for many foreign businesses, and domestic companies will be poised for fiercer competition, he added.
"This offers an opportunity for businesses in China to improve their core expertise and better align themselves with global rules," he said.
Eager to further compete with other established global rivals in RCEP markets, Sennics Co－a subsidiary of State-owned Sinochem Holdings Corp, China's largest chemical company by sales revenue－began operating its first overseas factory at the Rojana Industrial Park in Chon Buri province, Thailand, in mid-May to better supply rubber antioxidants for the production bases of downstream customers in Southeast Asia.
The new manufacturing facility is able to produce 25,000 metric tons of rubber antioxidants annually.
"By leveraging the geographical and business advantages of Thailand, as well as favorable tariff and investment policies under the RCEP framework, the plant will be able to expand our footprint in Southeast Asia and other markets within the Asia-Pacific region, as well as reinforce the stability of the region's industrial and supply chains," said Liu Hongsheng, chairman of Sennics.
Zhai Jingli－deputy CEO for China at Asia Pulp and Paper, a subsidiary of Indonesia's Sinar Mas Group－said due to the current tariff system, although there are no tariffs on pulp, the company's imports of finished products from Indonesia still face tariffs of around 5 percent.
She said that after Indonesia ratifies the RCEP agreement, the industrial relationships and investment structures will be significantly enriched among various member economies.
"Asia Pulp and Paper will be able to export more pulp and raw materials to China, and then export a part of the finished products made in China to other RCEP markets. This will help meet diversified demand both domestically and internationally, as well as help support the growth of the regional economic integration," she noted.
Benefiting from the RCEP, preferential imports from Chinese companies were valued at 6.7 billion yuan in the first quarter of this year, and tariff refunds were 130 million yuan during the same period. The value of their preferential exports amounted to 37.1 billion yuan, and 250 million yuan is expected in tax refunds from other member countries, according to statistics from Chinese customs.
All signatories to the Regional Comprehensive Economic Partnership should continue to promote the free trade pact's implementation steadily to turn the massive economic potential into competitiveness and boost East Asia's economic integration, the leader of a think tank said at a forum on Sunday.
Chi Fulin, president of the China Institute for Reform and Development, said pushing the work ahead will also further enhance the status of the Association of Southeast Asian Nations in regional economic cooperation frameworks.
Calling on countries to implement the RCEP's rules for and commitments to opening up markets as soon as possible, Chi said the RCEP will be the trading bloc with the most economic vitality in the world and will unleash development potential in the region.
The largest free trade agreement in the world, the RCEP was signed by all 10 ASEAN member states and China, Japan, South Korea, Australia and New Zealand in November 2020.
From January to May this year, the pact came into effect for 13 of its 15 signatories, including China.
RCEP countries, which generated more than 30 percent of global GDP in 2019, will account for more than 50 percent by 2030, according to an HSBC report.
All RCEP members will benefit from the free trade pact, and ASEAN member states will benefit more than others in terms of real GDP growth rate, according to a report from the Chinese Academy of International Trade and Economic Cooperation.
Openness is the greatest driving force for the RCEP, and China will make important contributions in this regard, Chi said.
China, which is going through an economic structural transformation and enhancing the openness of its services industry, will increase imports of services from RCEP members in the post-pandemic era at a fast pace, especially in tourism, health, intellectual property rights, telecommunications, finance and insurance, he added.
China and ASEAN, "the two most dynamic markets with the largest growth potential" will further integrate under the RCEP, Chi said, adding that China and ASEAN are becoming more complementary and important to each other's trade and economy.
China has been ASEAN's largest trading partner for 13 consecutive years, while ASEAN was China's largest trading partner in 2020 and 2021.
Both sides lifted their ties to a comprehensive strategic partnership in November 2021, when they convened a special summit to commemorate the 30th anniversary of bilateral dialogue relations.
In his address to the summit, President Xi Jinping called on both sides to fully harness the role of the RCEP and begin working toward further upgrading the China-ASEAN Free Trade Area soon.
The move is a major step taken to deepen and consolidate the bilateral comprehensive strategic partnership, Chi said on Sunday, pointing out that China will bring more opportunities to ASEAN and continue to be its largest market.
China's Hainan Free Trade Port has the right conditions to become an important hub for developing the partnership due to its favorable location and policies, Chi said.
Located near ASEAN countries, Hainan has close people-to-people exchanges with them, Chi said, adding that it is also "at the center of the RCEP region".
The port not only has China's "super-scale market" behind it, but also "has been implementing the highest level of opening-up policy", the scholar said.
Chi also proposed establishing a "think tank network" among RCEP countries.
Since the pact came into effect, the RCEP region has embraced huge development opportunities, but it also faces serious challenges from changes in the geopolitical landscape, Chi said.
"Against this special backdrop, it is even more important to give full play to the role of think tanks and media," he said, adding that the network aims to promote cooperative studies and dialogue and lend intellectual support to the advancement of the RCEP process.
Experts say RCEP will help countries better meet digital transformation goals
The digital trade, regional connectivity and efficient industrial chain sectors will help member countries of the Regional Comprehensive Economic Partnership boost economic growth in the post-pandemic era, experts and global business leaders said on Sunday.
Addressing a sub-session of the RCEP Media & Think Tank Forum in South China's Hainan province, held both online and offline, they said these are practical business areas that can promote the restructuring of the industrial supply chain and bolster the drive for common prosperity in the Asia-Pacific region, amid global uncertainties.
Shen Yuliang, director of the international trade office of the Institute of World Economics, Shanghai Academy of Social Sciences, said that under the RCEP framework, multilaterally unified comprehensive e-commerce rules will accelerate the digital transformation and upgrading of the regional supply chain.
Apart from facilitating the institutional environment for the growth of the digital economy, the rules in this field will help build a solid foundation for RCEP countries to expand their trade volume via digital trade in the coming years, said Zhang Jianping, deputy director of the academic committee of the Ministry of Commerce's Research Institute.
Digital trade comprises both digitally ordered trade in goods and services, including cross-border e-commerce, and digitally delivered trade such as services delivered internationally through the internet or other networks, according to the United Nations Conference on Trade and Development.
Li Jie, vice-president of the Chinese People's Institute of Foreign Affairs, said the megapact will support universal and equal participation in the growth of the digital economy, narrowing the technology gap and gradually realizing the digital transformation of the economy in the years to come.
The RCEP has adopted many creative ways in the design of specific rules, so that member countries can easily find a position in the regional industrial chain that suits their advantages, said Yose Rizal Damuri, executive director of the Jakarta-based Center for Strategic and International Studies.
Together with enhanced regional connectivity projects, Shada Islam, founder of the China-EU Forum, said the free trade deal also plays a positive role in expanding market access for investment, harmonizing rules and regulations, streamlining customs procedures and setting standards and rules concerning the development of e-commerce and small and medium-sized enterprises.
The New International Land-Sea Trade Corridor, a trade and logistics passage jointly built by western Chinese provincial regions and Singapore, has promoted close ties between western China and RCEP members in Southeast Asia, and has bolstered the smooth flow of economic and trade exchanges between the two sides.
Freight trains from the corridor delivered 170,000 twenty-foot equivalent units in the first quarter of this year, soaring 56.5 percent year-on-year, according to national railway operator China State Railway Group.
The RCEP will encourage more cross-border trade, investment and flows of people across the Asia-Pacific region, thus expediting economic and trade integration in the region. It will create substantial new trade and investment opportunities, said Harley Seyedin, president of the American Chamber of Commerce in South China.
Arthur Xu, president for China of Danfoss Group, a Danish engineering company, said the pact will not only boost trade activities in the Asia-Pacific region but also innovation. The reinforced protection of intellectual property rights further boosts the confidence of global companies to lift up China from a manufacturing base to an innovation base, he said.
In addition to shipping more products manufactured in its plants in China to other RCEP member countries in the future, he said the company will invest 300 million yuan ($44.79 million) to build new manufacturing facilities in Tianjin to support its growth in the Asia-Pacific region in the second half of this year.
The blue economy and ocean-based industries are to be prioritized as areas of future growth, an example of the enormous potential for cooperation among China and the participating countries of the Regional Comprehensive Economic Partnership, experts said on Sunday.
They made the comments while participating in a roundtable discussion, themed on blue economy cooperation and ocean sustainability, at the RCEP Media & Think Tank Forum.
Zhu Huayou, a research fellow at the Hainan Institute for Free Trade Port Studies, said economic cooperation between China and the Association of Southeast Asian Nations has been steady and robust in recent years. This has laid a solid foundation for the two sides to expand further cooperation in the blue economy, adding that in recent years, trade between China and ASEAN has notably increased.
The blue economy refers to the sustainable use of ocean resources for economic growth, ensuring the preservation and health of ocean ecosystems.
Zhu suggested efforts be made to build up a zone of economic cooperation centered around the South China Sea, in an effort to realize win-win economic growth via blue economy cooperation.
"Interconnectivity of ocean-based infrastructure will be a key fulcrum underpinning the growth of the blue economy. More concrete efforts should be made in enhancing cooperation among countries around the South China Sea in areas of hub construction, logistics systems and the building-up of supply chains," he said. "A strong, reliable supply and logistics chain will notably help in formulating an economic and trade cooperation corridor based on ocean industries and generate economic growth."
Figures from China's Ministry of Commerce show that the trade volume of goods between China and ASEAN came in at $878.2 billion in 2021, a year-on-year increase of 28.1 percent.
Hege Araldsen, consul general of Norway in Guangzhou, Guangdong province, noted the critical importance of cooperation and policy consensus in the blue economy, as the challenge of climate change is becoming increasingly pressing.
"There is no doubt that bold action must be taken globally to reduce greenhouse gas emissions. It requires political will, international cooperation, good business models and innovation to reach the goal of the policy agreements," she said.
Li Shijie, deputy dean of the College of Economics at Hainan University, believes Hainan province has great potential and experience in advancing the ocean-based economy, while the Hainan free trade port will play an indispensable role in such development.
"The blue economy and ocean-based industries are key strategic areas in the Hainan free trade port's blueprint, as the port is located in a central area of the whole RCEP region," he said. "Going forward, efforts must be and will be made on several fronts, including nurturing new modes for cooperation in global shipping and fully delivering financial policy incentives."
Once the Regional Comprehensive Economic Partnership agreement fully takes effect, it will inject new impetus into economic and trade cooperation among China and members of the Association of Southeast Asian Nations, experts said on Sunday.
They said RCEP will unlock huge economic benefits and cooperation opportunities for participating members, including China and ASEAN countries, and it will also help those nations better deal with the downward pressures brought by COVID-19 and changes in the international environment.
The remarks were made at a seminar discussing the opportunities and prospects for high-level cooperation between China and ASEAN under their strategic cooperation partnership, which was held on Sunday on the sidelines of the RCEP Media& Think Tank Forum.
The RCEP agreement was signed in 2020 by 15 countries in the Asia-Pacific region: 10 member states of ASEAN and five of their key trading partners－China, Japan, South Korea, Australia and New Zealand.
Officially taking effect on Jan 1, the agreement creates the world's largest free trade bloc, and it promotes regional economic integration through tariff concessions and other trade and investment liberalization and facilitation measures.
Zhao Jinping, former director-general of the Department of Foreign Economic Relations at the Development Research Center of the State Council, said East Asia has become a key hub in global supply chains, and China and ASEAN countries will embrace new opportunities to further enhance the resilience of those supply chains.
He said the implementation of the RCEP will expand trade liberalization in goods and services, investment liberalization, and e-commerce and intellectual property rights, and it will help further deepen economic and trade cooperation between China and ASEAN.
Zhao said RCEP members should work together to fully implement the commitments and rules stipulated in the agreement and follow-up on negotiations as soon as possible.
China and ASEAN should make a big push to strengthen industrial cooperation, such as setting up industrial funds, creating favorable conditions for fostering enterprises and boosting emerging industries, he said.
In 2020, ASEAN became China's largest trading partner for the first time, making the two sides each other's largest trading partner.
Ky Sereyvath, director-general of the Institute of China Studies at Royal Academy of Cambodia, said both sides need to make more efforts to enhance high-level cooperation, including further developing the ASEAN-China Free Trade Area, boosting ocean industry development and developing a blueprint for China-ASEAN cooperation for inclusive growth.
Fu Zhengping, president of the Institute of Free Trade Zones at Sun Yat-sen University, said the RCEP agreement will offer huge opportunities for free trade in agriculture for both China and ASEAN.
He suggested that China and ASEAN countries consider the establishment of free trade zones for agriculture and cross-border agricultural cooperation zones, which will further strengthen exchanges, deepen opening-up and enhance cooperation between the two sides.
High-level implementation of the Regional Comprehensive Economic Partnership agreement, which took effect on Jan 1, will propel regional economic integration to inject new impetus into world economic growth, officials and experts said on Sunday.
To that end, joint efforts are required from all RCEP members to deepen cooperation and seek common development with a firm resolve to uphold globalization, they said.
They made the remarks at the RCEP Media & Think Tank Forum, whose theme was "working together for common development".
The event was jointly organized by the Publicity Department of the Communist Party of China Hainan Provincial Committee, China Daily, the Chinese People's Institute of Foreign Affairs and the Hainan-based China Institute for Reform and Development.
"Working together for common development" is the right and wise call and corresponds to these uncertain, worrisome times for Asia, said Keo Puth Rasmey, former deputy prime minister of Cambodia, who added that the call for working together is no doubt even more necessary now.
Qu Yingpu, publisher and editor-in-chief of China Daily, said that world peace and development are facing serious challenges arising from both the pandemic and changes unseen in a century.
"We must always abide with the right course of history and remain vigilant on anti-globalization sentiments and behaviors and oppose them, to safeguard economic globalization, deepen interconnectivity and jointly build an open world economy," he said.
The RCEP economies should increase openness and deepen cooperation to enhance regional integration, promote high-quality economic development with the principle of mutual benefit and a win-win approach, and strengthen people-to-people bonds to actively create a good environment for common development, according to Qu.
According to Wang Yiming, vice-chairman of the China Center for International Economic Exchanges, the agreement is a successful example of open regionalism, as it unprecedentedly groups economies with different development levels and industrial structures into an integrated economic community.
Aiming to facilitate and liberalize trade and investment, the RCEP eliminates more than 90 percent of tariffs on goods traded in the region over a period of 20 years.
In comparison, the recently launched "Indo-Pacific Economic Framework", which has been joined by 11 RCEP members, has no content on the much-anticipated tariff reduction and market access to the United States, and all rules and standards are dictated by the US, according to Ong Tee Keat, chairman of the Center for New Inclusive Asia in Malaysia.
Chi Fulin, president of the China Institute for Reform and Development, said the RCEP is not only conducive to the full play of the advantages of traditional developed countries, but also enables underdeveloped countries to optimize their resource allocation, which will further unleash RCEP members' economic dynamism and promote steady economic growth in the region.
The implementation of the RCEP is a milestone for Asia-Pacific economies in opposing anti-globalization and jointly building a unified regional market, said Li Jie, vice-president of the Chinese People's Institute of Foreign Affairs.
It is also an important measure for advancing global trade and for liberalizing and facilitating investment, as well as a major victory for multilateralism and free trade, Li added.
Wang Bin, head of the Publicity Department of the CPC Hainan Provincial Committee, said the province will grasp the opportunities presented by the RCEP's implementation to better engage in China's dual-circulation development－in which the domestic market is the mainstay and the domestic and foreign markets reinforce each other－and to improve resource allocation and enhance opening-up.
High-level implementation of the Regional Comprehensive Economic Partnership agreement, which has taken effect since Jan 1, will propel regional economic integration to inject new impetus for world economic growth, according to officials and experts on Sunday.
To that end, joint efforts are required from all members to deepen cooperation and seek common development with a firm resolve to uphold globalization, they said.
They made the remarks at the RCEP Media & Think Tank Forum with the theme of "working together for common development".
The event was jointly organized by the Publicity Department of the Communist Party of China Hainan Provincial Committee, China Daily, the Chinese People's Institute of Foreign Affairs, and the Hainan-based China Institute for Reform and Development.
"Working together for common development" is the right and wise appeal that corresponds to these worrying and uncertain moments for Asia. And the appeal is no doubt even more necessary now, said Keo Puth Rasmey, former deputy prime minister of Cambodia.
Qu Yingpu, publisher and editor-in-chief of China Daily, said the world peace and development are facing serious challenges rising from both the pandemic and the unfolding changes not seen in a century.
"We must always abide with the right course of history and remain vigilant on the anti-globalization sentiments and behaviors and oppose them, should safeguard economic globalization, deepen interconnectivity and jointly build an open world economy," he said.
The RCEP economies should increase openness and deepen cooperation to enhance regional integration, promote high-quality economic development with the principle of mutual benefit and the win-win approach, and strengthen people-to-people bond to actively create good environment for common development, according to him.
Signed by 15 Asia-Pacific economies in November 2020, the RCEP agreement has created the world's largest free trade bloc covering one-third of the global population and domestic gross product. It has come into force in 13 members so far.
According to Wang Yiming, vice-chairman of the China Center for International Economic Exchanges, the agreement is a successful example of open regionalism, as it unprecedentedly groups economies with different development levels and industrial structures into an integrated economic community.
The RCEP will become a stabilizing anchor and accelerator for advancing economic globalization, he said.
Aiming to facilitate and liberalize trade and investment, the RCEP eliminates more than 90 percent of tariffs on goods traded in the region over a period of 20 years. It also allows products to enjoy tariff reduction or elimination if they have 40 percent or more of their value added within the region.
That comes in comparison with the recently launched "Indo-Pacific Economic Framework", in which 11 RCEP members have joined.
The US-led IPEF, with all rules and standards dictated unliterally by the United States, has no content on the much-anticipated tariff reduction and market access to the US, according to Ong Tee Keat, chairman of the Center for New Inclusive Asia in Malaysia.
The initiative's high overlapping membership with RCEP is no coincidence. It focuses on countering China's growing geopolitical influence in the region, according to him.
He said the RCEP needs no duplication in its role to promote regional economic integration.
Chi Fulin, president of the China Institute for Reform and Development, said the RCEP is not only conducive to the full play of the advantages of traditional developed countries but also enables underdeveloped countries to optimize their resource allocation, which will further unleash RCEP members' economic dynamism and promote steady economic growth in the region.
He suggested RCEP countries implement the market openness commitments and rules stipulated in the agreement and start consultations on subsequent provisions as soon as possible.
The implementation of the RCEP is a milestone for Asia-Pacific economies to oppose anti-globalization and jointly built the unified regional market, said Li Jie, vice-president of the Chinese People's Institute of Foreign Affairs.
It is also an important measure to advance global trade and investment liberalization and facilitation, and a major victory of multilateralism and free trade, Li added.
Wang Bin, head of the Publicity Department of the CPC Hainan Provincial Committee, said the province will grasp the opportunities presented by the RCEP implementation, to better engage in the dual-circulation development, improve resource allocation and enhance its opening-up.
Ong Tee Keat, former minister of transport of Malaysia and currently president of the country's Center for New Inclusive Asia, made a speech at RCEP Media & Think Tank Forum on Sunday.
'Working Together for Common Development'—Plenary session of the CIRD Forum
RCEP-- Prospects amid the arising challenges
With the RCEP coming into fruition on Jan 1st, 2022, a huge market comprising about 30 percent of the world population and one third of the global GDP contribution was finally open up amid rising de-globalisation against the backdrop of a gloomy global economy in the Post-Covid19 era.
Many international economic analyses appeared optimistic in their prognosis for RCEP. One estimate, published by the US-based Peterson Institute for International Economics before the RCEP sign-off on November 15th, 2020, projected the deal could add USD500 billion to the world exports by 2030. The North Eastern Asian trio of China, Japan and South Korea is deemed the major beneficiaries, with China's exports projected to rise by USD248 billion, Japan seeing an extra USD128 billion and South Korea USD 63 billion. While another study by the Japan Institute of International Affairs indicated that South Korea may see the biggest economic contribution, with RCEP adding 6.5 percent to its real GDP, comparing with Japan gaining 5.0 percent and China 4.6 percent.
However all these were the optimistic projections prognosed before the Indo-Pacific Economic Framework (IPEF) was rolled out by the Biden Administration. It's no secret that the newly minted Framework was focused to counter China's growing geopolitical influence in the region. Contrary to the RCEP, the Indo-Pacific Economic Framework is a US-led Presidential initiative, with all rules and standards dictated unilterally by Washington. The absence of Congress ratification made it different from the traditional Trade Agreement. The much anticipated tariff reduction and market access to the United States were nowhere sighted in the economic statecraft of Biden's Indo-Pacific Strategy.
Nonetheless, its high overlapping membership with RCEP is no coincidence. Of the 13 inaugural members of the Economic Framework, only the United States and India are not affiliated with RCEP.
Is this a boon or a bane to the regional economic integration of Asia Pacific? Would IPEF merely play a sparring partner to RCEP, or is it a designated vehicle tasked to rival RCEP? This remains to be watched. But the reality is RCEP needs no duplication in its role to promote regional economic integration.
While the nascent agreement is placed under microscopic scrutiny in many aspects by various quarters, the RCEP-sceptics were quick in casting aspersions on the trade deal's purported failure in benefitting the developing economies in ASEAN. They seem to ignore the fact that RCEP harmonizes rules-of-origin provisions and establishes a single set of regional content rules. This will effectively create a single market for intermediate goods that will promote the creation of supply chains across the region. In this perspective, the developing economies in ASEAN will undoubtedly benefit the most.
Under the harmonized rules-of-origin provision, tariff exemptions would apply as long as a sufficient proportion of the goods for export is made of inputs sourced from any of the 15 members of the bloc. This will reduce production costs in the supply chains of Multinational companies (MNCs) in these countries, while helping to strengthen and deepen the resilience of regional industrial supply chains.
All in all, this would translate to more job creation, higher GDP growth and speedier poverty reduction in the region. This is crucial to ASEAN where propelling economic growth to drive post-Covid19 recovery remains central to its agenda.
Be that as it may, the naysayers might still turn sceptical of RCEP's commitment to meeting the discerning standards of labour, environment and subsidy-free requirements set by the developed economies. They resort to hair-splitting by raising the threshold for RCEP, irrespective of the capacity of its developing and less-developed economies to meet the criteria.
Nonetheless, RCEP remains staying true to itself by prioritizing the need to bridge the economic and development gaps between the developed and less developed member states. Due cognizance is given to the disparate level of development among the RCEP member states. Less developed economies in RCEP such as Laos, Myanmar and Cambodia are given differential treatment with additional flexibility in implementing the RCEP agreement.
In the ASEAN perspective, its centrality in RCEP has never been an issue. No foreign political agenda could ever override its concerted aspiration of reinvigorating the floundering economy devastated by the deadly contagion. And RCEP provides the viable solution. Ultimately it is still the livelihood and well being of the people in ASEAN that matters.
ONG TEE KEAT
Chairman, Centre for New Inclusive Asia (CNIA)
Kuala Lumpur, MALAYSIA
27th May 2022.
China's textile and apparel sector will focus on developing new fibers and green manufacturing, as well as expanding markets related to the Regional Comprehensive Economic Partnership agreement to remain competitive in the coming years, said a senior industry leader.
As the ongoing Russia-Ukraine conflict has put China's textile and garment exports to Russia and Europe under direct pressure, Sun Ruizhe, president of the Beijing-based China National Textile and Apparel Council, or CNTAC, said the growing uncertainty of global economic recovery and geopolitical issues have had a huge impact on China's textile and apparel industry.
Moreover, affected by geopolitics, the prices of commodities such as crude oil and cotton remain stubbornly high, and the profits of man-made fiber and cotton textile production shrank significantly. Also, the repeated COVID-19 pandemic waves and global divergence in prevention and control measures have weakened industrial production and logistics, which, in turn, have weakened market confidence and consumer spending.
He said that the enforcement of the RCEP agreement, which covers 15 countries in the Asia-Pacific region, will create fresh opportunities for a more comprehensive and deeper regional industry cooperation. This will hedge against the current economic and trade risks and generate strategic value for the diversification of industrial and supply chains.
Under the framework of the RCEP, over 94 percent of textile and garment products from China to other members will eventually enjoy zero tariffs after a certain period, and the number is over 95 percent for textile and garment products from other members to China.
Sun said that the tariff reduction commitments, accumulative rule of origin and trade liberation and facilitation measures will be conducive to a closer relationship between China and other countries such as Japan in textile and garment trade.
"RCEP not only covers trade in goods but also engages in economic and technological cooperation, intellectual property rights and other factors. The introduction of advanced technology, important equipment, key components and new patterns will speed up transformation and upgrading of the entire industrial chain," he said.
China's textile and garment exports soared 11.1 percent on a yearly basis to $72.25 billion in the first quarter, according to the CNTAC. The council predicted that the industry will experience a slowdown in growth in the first half, due to external factors such as weak global demand and supply chain issues.
As the bill H.R.6256 passed by the US Congress in December 2021 attempts to prevent the importation of goods produced in China's Xinjiang Uygur autonomous region into the United States, Sun said this move will hit hard on the exports of Chinese cotton textile and garment goods to the US market.
Eager to enhance its earning strength and mitigate risks, the CNTAC and its member companies have made notable progress in both basic and applied research. The industry has shifted its focus from following others to keeping pace and even leading the way. Breakthroughs in technological bottlenecks have been made in the fields of new fibers, green manufacturing and textile machinery.
The development of the platform economy and content economy has fueled the upgrading of traditional brands and the emergence of new brands. E-commerce platforms such as SHEIN and PatPat are well-known in overseas markets. The changing lifestyle and consumer behavior have brought new markets and product categories for new brands. The love of hanfu－traditional Chinese dresses－and domestic brands has heralded a new trend known as guochao, a Chinese phrase referring to homegrown style. Domestic brands have entered a high-speed growth period.
In addition to facilitating the integration of digitalization into industrial development, Sun said China's textile and garment companies will work harder on developing new markets via new technologies and the country's dual-circulation development pattern that takes domestic development as the mainstay, with domestic and international development reinforcing each other.
The US, the Association of Southeast Asian Nations, the European Union and Japan remained the four biggest export markets for China's textile and garment products in the first quarter, accounting for 54.6 percent of the country's total exports of this kind during the period, data from China's General Administration of Customs showed.
"Although many domestic manufacturers encountered fierce competition from rivals in Southeast Asia since the second half of 2021, they still have distinct advantages in design, equipment, and integration of the upstream and downstream industry chains," said Deng Lijun, chief analyst at Changchun-based Northeast Securities.
JINAN - East China's Shandong province reported its trade with members of the Regional Comprehensive Economic Partnership (RCEP) neared 357.4 billion yuan ($53.1 billion) from January to April, an increase of 19.9 percent year-on-year.
The figure accounted for 36.9 percent of the province's total imports and exports.
"More than 100 import enterprises have seen nearly 51 million yuan in tariff concessions during customs clearance at Qingdao Customs in the first four months of the year," said Bi Haijun, an official of the customs of Qingdao, an important coastal city and international port city.
"Since the RCEP agreement took effect, the tariff rate of alloy steel plates we imported has declined from 3 percent to zero, with a total tariff concession of over 300,000 yuan, which has greatly reduced our production and operation costs," said Qu Xiaoqun, business manager of Yantai Tiezhongbao Steel Processing Co Ltd, a marine engineering platform equipment manufacturer which imports alloy steel plates from Japan.
Qu said that the company benefits from the RCEP agreement and other supportive policies, and domestic trade orders of the company are expected to increase dramatically this year and alloy steel imports from Japan will increase by about 70 percent.
LANZHOU - Northwest China's Gansu province saw its trade with members of the Regional Comprehensive Economic Partnership (RCEP) grow 12.6 percent year-on-year to 3.85 billion yuan ($570 million) during the first four months this year, according to the Lanzhou Customs.
From January to April, major goods exported from Gansu to RCEP member countries such as Japan, Thailand, Vietnam and the Republic of Korea included agricultural products, plastic products and traditional Chinese medicinal herbs.
During the same period, the province's agricultural exports increased 41.8 percent year-on-year. Exports of seeds, apples and apple juice all reported strong growth.
These agricultural products were mainly exported to RCEP member countries including Thailand and Japan, and countries and regions along the Belt and Road such as Kazakhstan and Nepal.
Agreement will spur tech innovations, promote regional trade integration
China is expected to better unleash the potential of the Regional Comprehensive Economic Partnership agreement to upgrade its manufacturing sector as well as support exports, according to experts and business leaders.
As the Chinese economy currently faces mounting uncertainties, it has become more important for the nation to pursue high-quality development, they said.
Officially taking effect on Jan 1, the agreement grouped 15 Asia-Pacific economies, including all 10 member states of the Association of Southeast Asian Nations, to create the world's largest free-trade bloc, promoting regional economic integration through tariff concessions and other trade and investment liberalization and facilitation measures.
For China, its economic and trade cooperation with the other RCEP countries has embarked on a fast growth track in recent years, with close collaboration seen across upstream and downstream manufacturing industrial chains.
Chinese Customs data showed imports and exports between China and the other 14 RCEP countries have increased by 3.9 percent year-on-year to 3.84 trillion yuan ($603 billion) during the first four months.
"As Chinese importers face multiple pressures, the RCEP is expected to provide more growth room for the nation's exports through creating new market demand with tariff concessions," said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.
"The integration of regional industrial and supply chains brought about by the agreement will also create new growth space for the Chinese economy," Zhou said, adding that it is particularly important for China to upgrade its manufacturing sector.
The RCEP will spur technological innovations and upgrades among Chinese manufacturers to meet market demand. It will also promote the establishment of new standards, rules and regulations among the member states, creating a more favorable external environment for the Chinese manufacturing sector to upgrade, he added.
According to a recent report by the PHBS Think Tank, affiliated with Peking University HSBC Business School, trade between China and other RCEP economies surged 11.2 fold from $166.7 billion in 2000 to $1.87 trillion in 2021, while Chinese exports to these countries surged by 11.8 fold over the period from $74.1 billion to $873.4 billion.
Moreover, manufactured goods accounted for around 90 percent of Chinese exports to the other RCEP economies in 2020, and for imports, the figure was around 74 percent, the report said.
According to analysts and business executives, Chinese enterprises should accelerate moving toward high-value-added sectors through innovation-driven product research and development and services optimization, and actively use the RCEP agreement to seek better development.
Xu Ningning, executive president of the China-ASEAN Business Council and chairman of the RCEP Industry Cooperation Committee, said the RCEP has created favorable development conditions for enterprises, and it is important for Chinese enterprises to take more actions to better utilize RCEP rules.
For that, enterprises are expected to make innovations in corporate management, product development and market exploration to improve their level of international cooperation, he said.
Cheng Shi, chief economist at ICBC International, said as the trade pact will advance regional industrial and supply chain integration, Chinese enterprises, especially those small and medium-sized ones, should further explore the growth space for the production of intermediate products and related opportunities for expanding imports and exports, to better participate in the regional industrial and supply chains.
That will unleash the vitality of small and medium-sized enterprises, enhance their expertise and promote their upgrades, as well as add resilience to China's industrial chain, he said.
He also said the RCEP will facilitate China to expand foreign trade due to its stimulus for regional trade activities with tariff concessions and other measures.
Wu Dazhi, chairman of Guangdong Zhida-Walking New Material Technology Co Ltd, said at a recent forum held by the RCEP Industry Cooperation Committee that the trade agreement is set to promote the upgrade and transformation of China's footwear industry toward a high-quality growth pathway because it can further unleash Chinese enterprises' ability to utilize market resources in the region leveraging on the nation's complete industrial chains.
Wu, who is also president of the Guangzhou Leather & Footwear Association, said the agreement will further reduce trade barriers for Chinese products to export and gain more recognition for Chinese brands in global markets, as Chinese products have good quality and affordable prices.
Having established a research and development center and factory in Vietnam, the company plans to increase investment and build facilities in other RCEP countries, he said.
