On November 15, 2020, the Regional Comprehensive Economic Partnership (RCEP) was officially signed.

On March 22, the head of the International Department of the Ministry of Commerce stated that China has now completed the approval of the Regional Comprehensive Economic Partnership Agreement, which is the RCEP Agreement, and has become the first country to ratify the agreement. In addition, Thailand has also ratified the agreement. All member states of RCEP have stated that they will ratify the agreement before the end of this year and promote the agreement to enter into force on January 1 next year.

The 15 countries that signed the agreement have a population of approximately 3.6 billion, accounting for nearly half of the world’s total population of 7.8 billion. Total economic output of the 15 countries about $ 27 trillion, accounting for about one-third of global GDP, trade volume accounts for about one-third of the world, so RCEP called the current world's most populous, the largest trade and economic scale, the most A free trade zone with development potential .

But I am afraid that many foreign trade friends do not understand that, in fact, it was ASEAN that initiated the RCEP first .

In 2011, ASEAN countries put forward the concept of RCEP; in the same year, the leaders of ten countries at the ASEAN Summit formally approved this concept.

In 2012, the leaders of the ten ASEAN countries and China, Japan, South Korea, India, Australia, and New Zealand jointly issued the "Joint Statement on Launching the Negotiations of the Regional Comprehensive Economic Partnership Agreement", a free trade area covering 16 countries The agreement was officially launched.

Since then, ASEAN has also been actively promoting the formal signing of RCEP. For example, our country has emphasized ASEAN's largest trading partner in Vietnam, signed RCEP has been one of the priorities of Vietnam into the international strategy ; and the second largest ASEAN member countries have put Malaysia as saying thatprogress RCEP agreement should not be in India Hinder .

For the overall regional economy, ASEAN countries and ASEAN as a whole have bilateral free trade agreements with the other 5 member states. RCEP is a collective upgrade of existing agreements.

In general, RCEP members’ mutual implementation of tariff concessions, open market access, removal of barriers affecting trade, and simplification of customs clearance procedures will further reduce trade costs in the RCEP region, promote trade facilitation, and contribute to the growth of trade and investment among countries in the region. Has a positive role in promoting. As a whole, each member will cut tariffs on about 90% of tariff items, which will stimulate the potential for growth in trade and investment among countries in the region.

According to statistics, in RCEP, China's manufacturing industry accounts for 65%, the population accounts for 64%, and the economy accounts for 55%, which is much larger than any other country in RCEP . This determines that China has an almost dominant position in RCEP . RCEP will focus on China and carry out the division of labor in the industrial chain, which is very beneficial for China to establish its own economic system and international sphere of influence.

For foreign traders, what are the specific opportunities worth exploring?

The current 10 member states of ASEAN are, in order of GDP, Indonesia, Thailand, Singapore, Malaysia, Philippines, Vietnam, Myanmar, Cambodia, Laos, Brunei. The total population of each country is currently approximately 660 million. If the neighboring countries of India, Pakistan, and Bangladesh are added, the total population exceeds 2.5 billion, which is nearly twice that of China, and the huge population also brings endless business opportunities.

PricewaterhouseCoopers analyzed in its report in early October last year that most ASEAN countries are still in the early stages of economic development and their economic foundations are relatively weak. With the rapid development in recent years, the living standards of the local people have improved significantly, and the demand for and consumption of various products has continued to increase .

At present, ASEAN can be divided into three echelons according to the level of economic development:

These two countries have complete infrastructure construction and economic systems, but due to their land area and high labor costs, the industrial volume is relatively small, and they are mainly concentrated in high-end manufacturing industries.

The industrial foundations of these two countries are relatively complete, and their citizens have a relatively high level of education. Coupled with the accumulation in the past few decades, they have formed a complete supply chain system in certain specific fields and are highly competitive.

The industrial base of this echelon country is relatively weak and the level of national development is relatively low. However, thanks to its abundant labor population and low labor prices, it is highly competitive in labor-intensive industries. These countries are regarded by many foreign investors as the next China, attracting a large amount of foreign investment and rapid economic growth.

Before the outbreak of the new crown epidemic, the average annual GDP growth rate of ASEAN countries remained at around 5% for many years, and ASEAN has been regarded as "one of the best economically performing regions in the world" for a long time .

However, due to the "black swan" of the new crown, five of the six major ASEAN member states including Indonesia, Singapore, Malaysia, the Philippines, and Thailand will all have negative growth in 2020. Only Vietnam is "outstanding" and maintains positive growth, but the growth rate is also significantly reduced. Slow, only 2.9%.

However, all parties generally expect that the economies of ASEAN countries will turn to recovery in 2021 like the rest of the world, and the momentum will be stronger. After all, the basic local advantages have not changed .

From the perspective of the division of labor in the industrial chain between my country and ASEAN countries, China is relatively at the high end of the manufacturing industry, and ASEAN countries have an advantage in labor-intensive industries because of their demographic dividend. Previously, China had direct investment in ASEAN countries. After the signing of the RCEP, the low-end industry chain will accelerate the transfer .

Among them, the textile and apparel industry will benefit most.

As the world’s largest exporter of textiles, my country has advantages in the production of the entire industry chain. It has advantages in industry research and development, high value-added, fast and short delivery times, and complex product orders. On the other hand, Southeast Asia has significant advantages in overseas labor costs. The advantage of tariffs between the EU and North American markets takes the lead.

In addition to textiles and apparel, the plastic products industry represented by tires will also benefit from the signing of RCEP. China is the world's largest tire manufacturing country, but my country's natural rubber dependence on foreign countries is as high as 87%. With China's accession to RCEP, importing natural rubber from Southeast Asia may truly achieve zero tariffs in the future, which is a major benefit for my country's rubber tire industry.

In addition, it is particularly worth mentioning that RCEP has formulated unified rules of origin, which will reduce the investment costs of enterprises in the region. In international trade, a large number of products often go through multiple cross-border transactions from the completion of manufacturing to the final market. The regional accumulation rule in the rules of origin means that the proportion of enterprises purchasing in the region reaches 40%, and the product can be regarded as the regional origin and enjoy preferential arrangements. This will encourage the further improvement and enhancement of the regional supply chain, and drive the substantial growth of intra-regional trade and investment.

Another giant free trade agreement in the Asia-Pacific region that came into effect in 2019-the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) has a very clear xenophobic intention in terms of trade in goods, trade in services, and investment , which makes it include China Non-joined economies in the region have suffered the negative impact of exclusive trade transfers triggered by CPTPP, especially in labor-intensive manufacturing industries such as textiles and light industry. RCEP can hedge the negative impacts from CPTPP.

As we all know, CPTPP is an updated version after the United States withdrew from TPP. Biden is working hard to add back those "groups" that Trump withdrew. There are already many predictions that the United States may restart the TPP.

On the other hand, the Biden administration stated on March 1st local time that it will comprehensively review its trade policy with China and use "all available tools" to deal with Beijing's alleged "unfair trade practices".According to the report, the current tariffs initiated by the Trump administration on approximately US$370 billion of Chinese exports to the United States per year are still the same. It is estimated that the Biden administration will retain these tariffs as a bargaining chip to force Beijing to comply with the terms of the trade agreement.

According to data from the Japan Maritime Center, ASEAN’s presence in the maritime container shipping market to the United States is increasing. Judging from the traffic volume in 2020, ASEAN’s container shipments have increased significantly, with the share exceeding 20% for the first time in the past 20 years. According to the latest data in January 2021, the share of ASEAN shipments in containers sent to the United States reached 23.3%.

With the uncertain prospects of Sino-US trade relations, RCEP will undoubtedly give China more confidence.

At present, ASEAN has surpassed the United States and the European Union to become China's largest trading partner.Especially in the first two months of this year, my country's exports to ASEAN soared by 43.2%!After the RCEP takes effect, there will be more bright spots in the cooperation between China and ASEAN.