The world's largest free trade zone officially landed

05-01-2022

The world's largest free trade zone officially landed


RCEP

On January 1, 2022, RCEP officially came into effect. The first batch of countries to take effect include 6 ASEAN countries and 4 non-ASEAN countries including China, Japan, New Zealand and Australia. This marks the official landing of a free trade zone with the world's most populous, largest economic and trade scale, and the most potential for development.



The entry into force of the agreement will greatly boost confidence in economic recovery in the context of the epidemic, effectively hedge against the negative impact of the new crown pneumonia epidemic on the economy, boost trade and investment confidence, and inject new impetus into China's economic growth.

Earlier, Yu Benlin, director of the Department of International Economic and Trade Relations of the Ministry of Commerce, stated that the tax reduction implementation plan has entered the final stage of the domestic approval process, and the tax reduction obligation will be fulfilled after the agreement takes effect.



The Ministry of Commerce, in conjunction with relevant departments, carefully sorted out the 701 binding obligations involved in the agreement, and all departments involved in the 701 obligations are ready to perform the contract.



Among them, the General Administration of Customs alone or jointly acted as the responsible department for a total of 174 items, accounting for 24.8%. Including simplification of procedures, product standards, service trade liberalization measures, investment negative list commitments, e-commerce, comprehensive intellectual property protection commitments, and administrative measures and procedural compliance and other broad areas.


According to the General Administration of Customs, in 2020, China's total import and export value to the other 14 RCEP member states was 10.22 trillion yuan, accounting for 31.7% of China's total import and export value during the same period. From January to November this year, the total value of China's imports and exports to the other 14 RCEP member states was 10.96 trillion yuan, accounting for 31% of China's total foreign trade value.



Benefits after RCEP takes effect



After the RCEP is fully implemented, it will drive nearly one-third of the world's economy to form a unified super-large-scale market, injecting strong impetus into regional and even global economic growth.


From the perspective of real GDP growth rates, ASEAN countries have benefited the most. It is estimated that by 2035, the cumulative growth rate of ASEAN's overall GDP will increase by 4.47% due to RCEP.



For China, RCEP is a powerful tool for stabilizing foreign trade and foreign investment. The entry into force of the agreement has brought multiple positive effects.



First, RCEP is conducive to expanding the export of our country's superior products. my country's trade with RCEP member countries accounts for about 1/3 of China's total trade. These countries are my country's important economic and trade partners. Among them, ASEAN, Japan, and South Korea are my country's first, fourth, and fifth largest trading partners.



Second, the cumulative rules of origin greatly reduce the threshold for commodity enjoyment. This will encourage manufacturers to use more of the original materials in the region, facilitate member states to enjoy the agreement's zero-tariff treatment, and help the region to form a tighter and more resilient industrial chain supply chain.



The third is that RCEP will enhance the growth of mutual investment between my country and other member states. Commitments to open goods, services, and investment are superimposed, trade and investment facilitation is guaranteed by the system, industrial chains and supply chains are more integrated, and regional investment will be more active.


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