China News Agency, Beijing, February 8th: Chen Bo: What does the entry into force of RCEP mean for China's economy?

  China News Agency reporter Liu Liang

  On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) came into effect, marking the launch of the world's largest free trade zone.

What does the entry into force of RCEP mean for China's economy?

Chen Bo, a professor at Huazhong University of Science and Technology and dean of the Optics Valley Free Trade Research Institute, recently accepted an exclusive interview with China News Agency's "East-West Question" to interpret the new development opportunities brought by RCEP.

The following is a summary of the interview transcript:

China News Agency reporter: After eight years of negotiations, the RCEP was signed in 2020 and will come into effect in 2022.

In your opinion, what special significance does the signing and entry into force of RCEP have for China?

Chen Bo:

The signing and entry into force of RCEP are of great significance to China, which are mainly reflected in the following four aspects: First, RCEP is a major breakthrough in China's foreign economic and trade cooperation, opening a "new window" for China's global economic and trade pattern.

Second, RCEP is the world's largest regional free trade agreement, which is not only conducive to making China's voice heard in the process of reshaping international economic and trade rules, but also conducive to forcing domestic reforms.

Third, the signing and entry into force of the RCEP proves to the world that China is not "involving", but continues to participate in and promote the in-depth development of globalization while consolidating the domestic economic cycle, which is conducive to consolidating foreign investors' confidence in China's investment. Assist China to participate in high-level economic and trade cooperation negotiations such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Fourth, RCEP made the first free trade agreement between China and Japan, further expanding China's free trade network.

On January 1, 2022, the "Regional Comprehensive Economic Partnership Agreement" (RCEP) came into effect, and Qingdao Customs was exporting to Qingdao Haiwan Group Co., Ltd. More than 2,800 tons of calcium chloride in Japan have issued certificates of origin.

Photo by Chen Xinghua issued by China News Agency

China News Service: Some voices believe that the entry into force of RCEP means that the whole of Asia has its own unified regional order in the global economic and trade system.

What do you think of this statement?

What does the entry into force of RCEP mean for world economic development?

A:

RCEP is a high-standard free trade agreement integrating trade in goods, trade in services, and investment liberalization. The participating countries are all in the Asia-Pacific region.

Its entry into force can be regarded as the first time that Asia has a unified regional order dominated by itself in the global economic and trade system, which will bring considerable benefits to member states from openness and cooperation.

  In terms of trade in goods, member states agreed to achieve 90% of the free movement of goods between member states and zero tariffs within 10 years.

In terms of service trade and investment, RCEP is more open than the bilateral free trade agreements China has signed with these countries, and includes issues such as intellectual property protection, e-commerce competition policy, and government procurement.

According to estimates by an internationally renowned think tank, by 2025, RCEP is expected to drive member countries’ exports, foreign investment stock and GDP to increase by 10.4%, 2.6% and 1.8% respectively over the baseline.

  It is worth noting that the total population of RCEP member countries is 2.27 billion, the GDP is 26 trillion US dollars, and the total export value is 5.5 trillion US dollars, accounting for about 30% of the global total, which contains huge economic volume and development space.

This includes not only developed countries, such as Japan, South Korea, Australia, etc., but also developing countries with low and middle income levels in Southeast Asia.

In other words, RCEP is like a miniature version of the World Trade Organization (WTO), and its successful operation is expected to provide a reference and a model for the WTO's economic and trade cooperation reform.

China News Agency reporter: From the perspective of the composition of RCEP member countries, there are ASEAN countries and East Asian countries, as well as Oceania countries.

What do you think of this membership?

Chen Bo:

The basis of RCEP is "ASEAN+5", that is, the 10 ASEAN countries plus the five ASEAN dialogue countries, namely China, Japan, South Korea, Australia and New Zealand.

Therefore, the current composition of RCEP is "ASEAN + 5", which is completely Asia-Pacific countries.

In May 2021, at the 4th 21st Century Maritime Silk Road Expo held in Fuzhou, the commodity exhibition area of ​​RCEP member countries attracted visitors to learn about related products.

Photo by China News Agency reporter Zhang Bin

  The economic development of these member countries is very different, there are both developed and developing countries.

But all countries have a common largest trading partner - China.

Therefore, China played a central role in promoting the formation of RCEP.

China is both the largest developing country and the second largest trading nation in the world.

The RCEP program promoted by China, on the one hand, can reflect the demands of international economic and trade reform and achieve a high-level free trade agreement; on the other hand, it can take into account the reality of developing countries and take into account the development status of each country.

China News Service: At present, China has proposed a new development pattern of "dual circulation". How do you think RCEP will help China's economic development?

As a new highland for opening to the outside world, the number of China's free trade zones has reached 21. What impact will RCEP have on the development of China's free trade zones?

Chen Bo:

In general, the implementation of RCEP is conducive to the further integration of China with the world's fastest-growing and most economically active Asia-Pacific market, consolidating the Asia-Pacific industrial chain, enhancing the overall competitiveness of China's domestic market, and promoting the Chinese market. Survival of the fittest, industrial transformation and upgrading.

Therefore, the landing of RCEP will effectively promote the new development pattern of "dual circulation" in China.

  As we all know, the original intention of establishing the free trade zone is to make it an experimental field to help China adapt to the requirements of international high-level trade and investment agreements, and to be the first to try to create a new pattern of China's comprehensive opening up.

The negative list in the RCEP clause was first piloted in the free trade zone.

Although there are some slowdown measures against China in the RCEP terms, they should be implemented immediately in the free trade zone.

For example, RCEP allows China to suspend the implementation of the negative list of the service industry for six years, but the task of piloting the free trade zone should start immediately.

The landing of RCEP marks that the nationwide opening-up has entered a new stage.

Correspondingly, the free trade zone, as a "test field", should continue to explore and implement higher-standard open and innovative measures, and benchmark against more open economic and trade requirements.

New energy vehicles on display at the 11th China-ASEAN (Liuzhou) Automobile Industry Expo in October 2021.

Huang Yonghe, a senior expert from China Automotive Technology and Research Center, said at the meeting that under the framework of RCEP, China-ASEAN new energy vehicle industry cooperation has ushered in new opportunities.

Photo by China News Agency reporter Zhu Liurong

China News Service: Where are the benefits of RCEP's tariff reductions and trade facilitation measures?

What impact will it have on Chinese companies and related industries?

Chen Bo:

First of all, the scope of goods covered by the RCEP tariff reduction is very large.

After the agreement is implemented, more than 90% of the goods exported from China to RCEP countries will enjoy zero-tariff treatment in the next 10 years.

This also means that for the first time, there is a free trade agreement between the two major economies of China and Japan, and Japan will soon implement zero tariffs on 88% of exports from China.

China's measures for RCEP trade facilitation are mainly reflected in the following four aspects.

  First, it is clearly stated that imported goods from RCEP countries are generally cleared within 48 hours.

Of course, 48 hours is the minimum. The customs strives to achieve 6-hour fast customs clearance, and goods will have channels for fast customs clearance.

  Second, in terms of rules of origin, RCEP countries will enjoy back-to-back certificates of origin, improving distribution and logistics efficiency, and the cumulative rules of RCEP will help the integration of the industrial chain.

Due to the large number of member countries, most of the inputs required by enterprises for production come from RCEP countries, so they can enjoy a cumulative tariff-free policy, thereby promoting the strengthening of the industrial chain in the region.

  Third, there is no time limit for direct transportation, and the time spent in the RCEP member countries during the distribution and logistics process is not included in the time limit, and no customs duties are required.

However, according to the previous regulations, staying for more than half a year may be considered as a commodity in the host country and need to pay customs duties.

  The fourth is the regional value algorithm, including two different algorithms, one is to look at the proportion of a country in the added value, and the other is to calculate the tax exemption by adding up the added value of all RCEP countries in this commodity. part.

Within the RCEP region, member states enjoy duty-free treatment in the process of production, industrial chain cooperation, and value accumulation, which can promote the flow of trade between regions.

In December 2021, the staff of Binzhou Customs in Shandong Province randomly inspected colored pencils to be exported in a pencil production enterprise.

When RCEP is about to take effect, the Binzhou customs department actively guides enterprises to understand the preferential policies such as RCEP tariff concessions and rules of origin, and helps foreign trade enterprises seize new opportunities of RCEP.

Photo by China News Agency Chu Baorui

  In general, RCEP has a magnifying effect on industries that originally participated in the international division of labor and cooperation, and will be beneficial to industries or enterprises that rely on the international industrial chain; for enterprises that compete with RCEP countries, there may be a short-term adaptation. process of new challenges.

From the perspective of industry classification, industries such as freight, textiles, clothing, light industry, building materials, agricultural products, mining, e-commerce, public transportation, and the Internet have benefited greatly, while industries such as automobiles and parts, petrochemicals, medical care, and tourism may be affected to a certain extent. challenge.

In addition, some industries have long industrial chains, such as electronic products and mechanical equipment, and the overall assessment of their impact by RCEP is also complicated.

(Finish)

Interviewee Profile:

  Chen Bo is a professor and doctoral supervisor of Huazhong University of Science and Technology, director of the Open and Development Research Center, dean of the Optics Valley Free Trade Research Institute, a double-appointed professor of Hainan University, and a visiting researcher of the Federal Reserve Dallas Branch.

The main research directions are international trade, Chinese economy and international economic cooperation. He has published more than 20 papers in top international journals of international economics and comparative economics, as well as top domestic economic management journals such as "Economic Research" and "Management World", and participated in the chair. Conducted research and consulting work in Shanghai, Fujian, Hubei, Hainan and other free trade zones/ports.

Won the titles of Huazhong Outstanding Scholar and Chutian Scholar.

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