On June 2, 2023, the Regional Comprehensive Economic Partnership (RCEP) officially entered into force for the Philippines, marking the full entry into force of the RCEP for 10 ASEAN members and 15 signatories including Australia, China, Japan, the Republic of Korea and New Zealand. The full entry into force of the RCEP fully demonstrates the 15 parties’ determination and actions to support an open, free, fair, inclusive and rules-based multilateral trading regime. It will inject strong impetus to regional economic integration, enhance trade and investment liberalization and facilitation in East Asia, and contribute to long-term and stable economic development in the region and the world at large.
China will continue to promote the high-quality implementation of the RCEP, provide guidance and services for local governments, industries and enterprises to further implement and make good use of the agreement, ensure the continuous release of the benefits of the agreement, and fully leverage the positive role of the RCEP in promoting cooperation on industrial and supply chains, high-level opening-up and high-quality development. At the same time, we will work with other parties to fulfill our obligations under the agreement, strengthen the RCEP mechanism building, improve the overall implementation of the agreement, and provide a strong guarantee for the steady and long-term progress of the RCEP cooperation.
On June 2, the Regional Comprehensive Economic Partnership (RCEP) officially entered into force for the Philippines, marking the full entry into force of the RCEP for the 15 signatories. Head of the Department of International Affairs of the Ministry of Commerce answered questions from the media and the public.
Q: What is the significance of the RCEP for its full entry into force among the 15 signatories?
A: On 15 November 2020, 10 ASEAN countries, Australia, China, Japan, the Republic of Korea and New Zealand jointly signed the RCEP, which will officially enter into force on 1 January 2022. On June 2, 2023, the RCEP entered into force for the Philippines, bringing the agreement into full force for all 15 signatories. The total population, GDP and trade in goods of the RCEP region account for about 30 percent of the global total. The full entry into force of the RCEP for 15 parties marks a new stage of full implementation for the free trade area with the largest population, the largest trade scale and the greatest development potential in the world.
The full entry into force of the RCEP fully demonstrates the 15 parties’ concrete support for an open, free, fair, inclusive and rules-based multilateral trading regime and their joint commitment to advancing a comprehensive, mutually beneficial and high-standard economic partnership. The 15 parties’ commitment to opening up their markets in goods, services and investment, combined with high-level rules in various fields, will greatly promote the free flow of production factors such as raw materials, products, technologies, talents, capital, information and data within the region, promote the gradual formation of a more prosperous large market of regional integration, and promote wider, higher and deeper opening-up and cooperation among member states.
The full entry into force of the RCEP will provide a strong boost to China’s opening-up at a high level. The full entry into force of the RCEP will create more favorable conditions for China to expand trade in goods with members. It will also promote the opening-up of trade in services and investment, and facilitate trade and improve the business environment. Continuing to promote the high-quality implementation of RCEP will help further promote the integrated development of regional industrial and supply chains, help local governments, industries and enterprises expand new space for international economic and trade cooperation, and promote institutional opening-up at a higher level from a higher starting point.
Q: What positive results has the RCEP achieved in promoting regional trade and investment since it took effect on January 1, 2022?
A: Thanks to the concerted efforts of all parties, the implementation of the RCEP has yielded initial results. Trade in goods among all members has become closer, and intra-regional trade has become a key force for stabilizing and driving the growth of foreign trade among all members. At the same time, thanks to the positive signal from the effective implementation of the RCEP, the region has continued to become a hot spot for global investment. Foreign investment in most member countries is on the rise, and the region as a whole is attracting strong growth in greenfield investment.
The implementation of the RCEP has played an important role in stabilizing China’s foreign trade and foreign investment. In terms of trade, China’s import and export volume with other RCEP members reached 12.95 trillion yuan in 2022, up 7.5% year on year and accounting for 30.8% of China’s total import and export volume. In the first four months of 2023, China’s import and export volume with other RCEP members reached 4.12 trillion yuan, up 7.3 percent year on year, accounting for 30.9 percent of China’s total import and export volume. In terms of attracting foreign investment, China actually utilized US $23.53 billion of investment in other RCEP members in 2022, up 23.1 percent year on year. From January to April 2023, China’s actual utilization of investment in other RCEP members reached 8.9 billion US dollars, an increase of more than 13.7 percent year on year.
The RCEP has delivered tangible dividends and benefits to Chinese companies. The RCEP, in addition to the bilateral free trade agreements already in force between China and other RCEP members, has created favorable conditions for companies to enjoy better benefits and helped them reduce trade costs. In 2022, Chinese companies will enjoy 235.3 billion yuan worth of exports under RCEP, and 1.58 billion yuan worth of tariff concessions from importing countries. The value of preferential imports was 65.3 billion yuan, and tax concessions were 1.55 billion yuan. In the first quarter of 2023, Chinese enterprises will enjoy 62.29 billion yuan of preferential exports under RCEP, and will enjoy 930 million yuan of tariff concessions from importing countries. The value of imports was 18.25 billion yuan, with tax concessions amounting to 480 million yuan.
Q: What innovative measures and outcomes have been achieved in the RCEP synergy process?
A: Since the RCEP came into effect, local governments have worked hard to align policies, improve the business environment, strengthen economic and trade cooperation with RCEP members, improve support and services for enterprises, and help them seize the opportunities of the agreement. Many effective practical measures and innovative outcomes have been achieved.
First, we will actively align the opportunities of the agreement and take practical measures in light of local conditions. Local governments have actively implemented the Guidelines on High-quality Implementation of the RCEP. Many have introduced work plans or action plans for the implementation of the RCEP in light of their own development realities. Some have incorporated the opportunities of seizing the RCEP into their 14th Five-Year Plan and 2035 vision goals, and introduced practical measures to systematically promote high-quality implementation. Promote deeper integration into large regional markets.
Second, we need to enhance trade facilitation and smooth regional economic and trade channels. Many localities have implemented RCEP trade facilitation measures to a high standard, and advanced the implementation of express and six-hour customs clearance for perishable goods. We will actively build an online public service platform for the intelligent application of RCEP, and vigorously promote digital services for the whole process of Certificate of Origin to help enterprises enjoy benefits efficiently. Relevant localities will expand and increase the number of foreign trade liners, air routes and railway freight trains and stations catering to RCEP members, constantly improve integrated logistics and supply chain services, and enhance customs clearance efficiency and capacity at ports.
Third, make full use of the open policy of the agreement to ensure that the fruits of trade and investment are delivered. Local governments and enterprises have made full use of the RCEP cumulative rules of origin and preferential policies for opening up trade in services and investment markets, actively optimized regional trade and investment layout, and promoted the deeply integrated development of industrial and supply chains. Some localities have made great efforts to develop intermediate goods production and trade for RCEP members in light of their resource endowments and industrial characteristics, with positive results. Some localities have combined pilot free trade zones and other open platforms with RCEP policies, stepped up targeted investment in key industries, and launched a number of major projects.
Fourth, we will create a first-class business environment by successfully implementing the RCEP. Local governments have strictly implemented domestic laws, regulations and regulations corresponding to the RCEP’s mandatory obligations. They have also made great efforts to implement the RCEP’s encouraging obligations, improve local governance capacity, attract industries, capital and human resources, and significantly improve their trade and investment environment. Some localities have actively taken advantage of such platforms as regional fairs and economic and trade forums to strengthen industrial cooperation with RCEP members, promote competitive products with local features, and coordinate trade and investment projects.
Fifth, strengthen publicity training, enhance the awareness of enterprises to use the agreement. Local governments have strengthened RCEP training and policy publicity through various means, conducted targeted training for different industries, and spread the interpretation of preferential policies across all types of enterprises. Some localities have published a list of their own competitive import and export products under the RCEP, conducted comparison of tariff concessions and trade big data analysis among RCEP members, and publicized and analyzed key export destinations of competitive local products to enterprises, helping them better explore the RCEP regional market.
Q: How will MOFCOM guide and support local governments, industries and enterprises to make full use of the policy dividends of the Agreement?
A: With the full entry into force of the RCEP for all signatories, we will continue to work on the high-quality implementation of the RCEP, guide local governments, industries and enterprises to better align with the opportunities of the RCEP, fully enjoy the policy dividends of the RCEP, and further leverage the positive role of the RCEP in promoting cooperation on industrial and supply chains and high-quality development.
First, we will continue to guide local governments, industries and enterprises in implementing and making good use of the agreement. We will guide local governments in the implementation of the Guidelines on High-quality Implementation of the RCEP, grasp the process of gradual opening up of the RCEP, and gradually fully leverage the economic effect of the agreement. We will further strengthen training on the RCEP. Building on the 13 training sessions held in the previous two years, we will carry out in-depth training on the RCEP on stabilizing and strengthening chains in specific industries such as petrochemical, mechanical and electrical, light textile and automotive. We will encourage local governments and industries to carry out more detailed and targeted training to help enterprises fully understand and make good use of the benefits of the agreement policies.
Second, we will continue to improve the level of public services and promote the replication of the implementation experience of the agreement. On the basis of optimizing the functions of the service network of China’s Free Trade zones, China will continue to provide RCEP policy consultation and Q&A services to enterprises. We will encourage and support local enterprises to provide services in various forms in light of local conditions, and provide package solutions related to the implementation of the FTA. We will regularly track and evaluate problems in the implementation of the agreement, review and summarize the good experience and practices of different countries in connecting with the RCEP, improving the business environment, and promoting trade and investment cooperation, so as to form classic cases of the RCEP that can be replicated, promoted and implemented, and constantly raise the utilization level of the agreement.
Third, we need to promote high-level implementation of the RCEP and deepen institutional building and cooperation. We will work with other members to ensure that the RCEP commitments on tariff reduction and service trade and investment liberalization are fully implemented, and that the rules and obligations on trade and investment liberalization and facilitation are fully fulfilled. We will promote regular institutional meetings such as ministerial meetings and joint committees of the RCEP to oversee and promote high-quality implementation of the agreement, support the establishment of a secretariat for the RCEP, and strengthen economic and technical cooperation in the RCEP. We will actively promote coordination and alignment of regulations on product and service standards among member countries, advance regional cooperation on mutual recognition of conformity assessment, create better conditions for high-quality implementation of the RCEP, and enable local governments and enterprises to more fully integrate into the RCEP market, so as to achieve mutual benefit and common development at a higher level.