RCEP brings new opportunities for regional economic development
Asia is the region with the most economic vitality and development potential in today's global production network, but factors such as global value chain restructuring, anti-globalization, and trade protectionism have adversely affected regional economic cooperation in Asia.
The signing and entry into force of the "Regional Comprehensive Economic Partnership Agreement" (RCEP) will help Asian economies further enhance the level of regional trade and investment liberalization, promote the formation of regional integrated markets, and provide a strong impetus for Asian regional economic cooperation in the post-epidemic era .
RCEP member countries should make full use of institutional dividends, promote the deep integration of regional value chains, and make greater contributions to regional and global economic and trade development.
The adjustment process of the global value chain is accelerated
Since the 1980s, the wave of economic globalization has promoted the rapid growth of the world economy, and this situation has continued until the outbreak of the international financial crisis in 2008.
Since then, the trend of reshaping the global value chain has begun to emerge.
On the one hand, compared with before the financial crisis, the growth of global value chains has slowed down.
The chain length of the global value chain has been shortened, especially the number of cross-border production of intermediate products in complex value chains has decreased, and some value chain links have returned to China.
On the other hand, the regionalization trend of the global value chain is strengthening, which is manifested in the fact that the value chain is increasingly concentrated geographically in the final consumer market.
The reason is that in addition to emerging technologies such as automation, artificial intelligence, Internet of Things, and 3D printing, which have reduced the importance of labor cost advantages, which in turn affect the speed and direction of some industrial transfers, China and other emerging economies in the global value chain The promotion of the division of labor status objectively shortens the value chain.
It cannot be ignored that in recent years, domestic nationalism has prevailed in some developed countries, and countries such as the United States and Europe have adopted discriminatory industrial policies or encouraged the return of industries on the grounds of security, which has seriously affected the layout of the global value chain based on market-oriented division of labor.
At the same time, the decision-making of investment layout of multinational companies has also shifted from efficiency priority to efficiency and safety, and they have to consider reducing supply chain risks by means of near-shoring outsourcing and decentralized layout.
With the in-depth development of economic globalization, the vertical division of labor and cooperation model has begun to disintegrate, and the production and supply links in the value chain have undergone global adjustment and reshaping.
The sudden outbreak of COVID-19 in 2020 has profoundly affected the adjustment process of the global value chain.
Due to repeated epidemics, a large number of laborers cannot be invested in the normal production activities of enterprises, the production scale of most industries has shrunk severely, and the supply of services has declined sharply, affecting the total social output of various countries.
The global spread of the epidemic has weakened investors' confidence in the market, and the world economy is facing great uncertainty.
Under the conditions of the division of labor in the global value chain, production stagnation in any country or region can cause a series of chain reactions, which will gradually spread to other countries and regions.
The impact of the epidemic not only affects the production and supply side, but also affects the social demand side.
The decline in the number of employed people and the shrinking of the production end have led to a decline in social income levels, and the demand for most industries and products has been impacted to varying degrees, which has had a major impact on the global value chain.
The blockade measures adopted by various countries in response to the epidemic have objectively hindered the flow of production factors such as goods, capital, technology, and personnel between regions, and have had a major impact on the global value chain.
Affected by the epidemic, some countries and regions have broken industrial chains and supply chains, which not only pushed up production costs, but also greatly reduced production efficiency.
How to avoid industrial chain and supply chain risks has become a major issue of concern to governments and enterprises.
Some western developed countries have reassessed their global industrial chains on the grounds of security, and have begun to make corresponding adjustments to high-tech and other important industries, promoting the return of some industrial chains, and implementing a world economy characterized by "re-industrialization" rebalancing strategy.
Although economic globalization has been hindered, the pace of regional economic cooperation in Asia has not stopped.
The RCEP, which came into effect in January 2022, has brought development opportunities to a world economy full of conflicts, problems and challenges.
RCEP has further deepened the economic linkages between Asian economies, effectively boosted confidence in regional trade and investment in Asia, further strengthened the resilience of the industrial chain and supply chain within the region, and provided a strong impetus for building a unified market within the region and achieving global prosperity and development .
RCEP focuses on improving the environment for comprehensive regional development
As the existing international economic and trade governance system is increasingly unable to cope with the increasingly complex international economic situation, Asia needs to establish an institutional framework to promote regional economic and trade cooperation.
In February 2011, the 18th ASEAN Economic Ministers Meeting passed the draft of RCEP, whose goal is to build a comprehensive, high-quality and mutually beneficial regional free trade agreement covering 16 countries.
In November 2012, the leaders of 16 ASEAN countries, China, Japan, South Korea, India, Australia and New Zealand jointly issued the "Joint Statement on Initiating RCEP Negotiations", and officially launched the RCEP negotiations in May 2013.
During the negotiation process, India was relatively passive in its market opening and announced in November 2019 that it would suspend its accession.
In November 2020, after 31 rounds of negotiations, 15 member countries finally reached an agreement, and the regional trade organization with the largest population, the most diverse membership structure and the greatest development potential in the world was formally formed.
Although the member states differ greatly in terms of economic system, development level, scale and volume, etc., RCEP has found a balance between diversity and high standards, and handled different interest demands in a flexible way, reflecting comprehensiveness, advancement and inclusiveness .
First, RCEP covers a wide range of fields.
Its main chapters include not only trade and investment facilitation and related opening commitments in traditional fields such as trade in goods, service trade, and investment, but also new trade rules involving a large number of post-border issues such as intellectual property rights, e-commerce, competition policy, and government procurement.
Second, RCEP explores a series of high-standard economic and trade rules.
In terms of intellectual property rights, there are a total of 83 articles, not only including trademarks, patents, copyrights, etc., but also involving a wide range of issues such as transparency, anti-unfair competition, technical assistance, etc. Activities provide institutional guarantees.
In the field of trade in services, RCEP members promise to implement the negative list within six years after the agreement takes effect. The level of openness not only exceeds the WTO, but also exceeds the existing "ASEAN+1" free trade agreement.
For example, on the basis of about 100 departments promised by China’s accession to the WTO, RCEP added 22 departments including research and development, management consulting, manufacturing-related services, and air transportation, and raised the level of opening up in 37 departments including law, finance, construction, and shipping. .
In terms of e-commerce rules, RCEP is the multilateral e-commerce rules with the widest scope and the largest number of members reached in the Asia-Pacific region, and it is also the e-commerce agreement with the highest level of participation by China.
The member states promise to promote paperless trade, recognize the effectiveness of electronic signatures, and provide institutional guarantees for the development of online transactions, which will help companies expand exports through cross-border e-commerce platforms.
In the field of investment, the agreement introduced issues such as investment promotion, investment protection, investment facilitation and liberalization. All members promised to adopt the negative list method, and even adopted the "freezing mechanism" and "ratchet mechanism" to prevent the opening-up commitment to foreign investment from regressing Phenomenon.
Again, RCEP has fully demonstrated inclusiveness.
Fully considering the different development levels and economic needs of member states, and giving less developed member states a certain transition period or exception clauses, RCEP has set up a transition period of about 20 years for market opening, gradually realizing zero tariffs on imports of 90% of the tax items, and providing for Cambodia, Member states such as Laos and Myanmar have provided a transitional period for enacting domestic legislation and improving the regulatory system.
The significance of RCEP lies in the establishment of relevant open systems and legal guarantee mechanisms in the above-mentioned fields to further improve the regional comprehensive development environment, that is, to build a transparent, fair and predictable policy environment.
RCEP maximizes the integration of the "fragmented" economic and trade institutional arrangements in East Asia through the unification of tariff commitments, rules of origin, trade and investment facilitation, and other trade rules, that is, the integration of 27 trade arrangements currently signed and implemented by 15 member states and 44 investment treaties.
For example, the regional cumulative rules of origin regard the raw materials imported from other member states in the production process of member state enterprises as local raw materials, making it easier for export products among member states to meet the threshold for enjoying tariff preferences, which is conducive to promoting the trade of intermediate products in the region and investment activities to promote the deepening development of the regional value chain industry chain.
The entry into force of RCEP will have an important impact on the reshaping of the global value chain.
Given the diversity of economic development in Asia, RCEP still has room for further improvement.
On the one hand, compared with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the level of trade and investment liberalization needs to be further improved.
For example, source code in the e-commerce chapter, cross-border data flows in financial services and the location of computing facilities, as well as rules on anti-competitive practices, online dispute resolution, etc. are areas that need to be explored.
On the other hand, the participation of RCEP members in the regional value chain is still lower than the Asian average.
According to data from the Asian Development Bank, in 2018, the participation rate of RCEP members in the regional value chain was 46.8%, and the participation rate of complex value chains was 15.8%, lower than the average levels of 48.9% and 26.2% in Asia during the same period.
In 2020, the participation in complex regional value chains of member states such as Malaysia, Singapore, South Korea, and Vietnam will exceed the Asian average of 26%, while member states such as Laos and Indonesia still have room for further improvement.
In the future, how to make members of developing countries better participate in the regional production network through the improvement of the system, especially to promote economic development through complex value chain trade is a topic that needs continuous research.
Provide impetus for regional trade development
From January 1, 2022, RCEP will come into effect for 10 countries including Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, China, Japan, New Zealand and Australia, and for South Korea from February 1, and from March 18 Effective for Malaysia and effective for Myanmar from May 1.
Currently, 13 of the 15 signatories have entered into force.
Since RCEP came into force, member states have held multiple multi-field joint meetings to negotiate and promote the implementation of the agreement.
At the same time, the RCEP Industrial Cooperation Committee was established to promote trade, investment, and industrial cooperation among countries.
From July to August 2022, the RCEP Industrial Cooperation Committee and more than 10 national business associations in China signed the "Strategic Cooperation Memorandum" respectively, agreeing to jointly help China and other RCEP member countries to cooperate in new developments in related industries.
According to the commitments in the agreement, China's liberalization rate of trade in goods with RCEP member countries has reached an average of 88.5%, with ASEAN being the highest at 90.5%.
Among the member countries, Singapore has the highest commitment to liberalize trade in goods, reaching 100%, followed by Australia and Brunei, respectively reaching 98.3% and 98.2%; Myanmar and Laos are the lowest, both at 86%.
For a long time, the proportion of intra-regional trade of member states has remained high. Except for China, intra-regional trade of other member states accounts for more than 50% of their total foreign trade.
From January to June 2022, RCEP intra-regional trade will achieve rapid growth.
In terms of exports, the exports of China, South Korea and Singapore to RCEP trading partners reached US$469.15 billion, US$171.87 billion and US$137.08 billion, respectively, a year-on-year increase of 15.1%, 18.7% and 19.1%, which was higher than the growth rate of the three countries’ exports to the world. 0.8, 3.5 and 1 percent.
Exports from Australia, Indonesia, Malaysia and other countries to RCEP trading partners all increased by more than 10%.
In terms of imports, Vietnam, Australia and New Zealand imported US$134.96 billion, US$88.63 billion and US$15.61 billion from RCEP trading partners, respectively, a year-on-year increase of 13.3%, 26.2% and 18.2%, higher than the growth rate of the three countries' global imports 1.6, 4.6 and 3.3 percentage points.
Japan, South Korea, Thailand, Indonesia, Malaysia and other countries have increased their imports from RCEP trading partners by more than 10%.
It is worth noting that RCEP established free trade links between China, Japan and South Korea and Japan for the first time. From January to June 2022, the bilateral import and export trade volumes of China, Japan, South Korea and Japan were 20.3 trillion yen and 5.5 trillion yen respectively. Yuan, an increase of 10.6% and 25.5% over the same period in 2021, respectively.
Although the members are each other's major trading partners and have a high internal trade base, RCEP still strongly promotes the development of intra-regional trade. The proportion of internal trade is stable at about 45%, and it also guarantees Asia's central position in the global value chain.
According to data from the United Nations Conference on Trade and Development, from January to June 2022, global foreign direct investment (FDI) will be 872 billion US dollars, a decrease of 7% compared with the same period in 2021, and East Asia will absorb 185 billion US dollars of foreign direct investment, an increase from the same period in 2021. 5%.
Although global investment has fluctuated greatly this year, based on the economic links and supply chain resilience in East Asia, most RCEP members have achieved rapid growth in absorbing foreign direct investment.
Among them, China's actual use of foreign direct investment was US$112.35 billion, an increase of 21.8% year-on-year; Malaysia's absorption of foreign direct investment was 138.47 billion ringgit (about US$31.50 billion), an increase of 62.2% year-on-year; Australia's absorption of foreign direct investment was US$41.26 billion, a year-on-year increase of 21.8%. An increase of 136.2%; Japan’s absorption of foreign direct investment was 1.8 trillion yen (about 13.25 billion U.S. dollars), an increase of 8.5% year-on-year; South Korea’s absorption of foreign direct investment was 9.04 billion U.S. dollars, a year-on-year increase of 29.1%; Direct investment reached US$14.03 billion, US$10.27 billion and US$6.15 billion respectively.
It is worth noting that China, Malaysia and Vietnam will absorb foreign direct investment in the second quarter of 2022, respectively, by 18%, 37% and 15% compared with the same period in 2021.
Promoting China's promotion of trade status in the region
In order to implement RCEP smoothly, six departments including the Ministry of Commerce of China jointly issued the "Guiding Opinions on the High-quality Implementation of the Regional Comprehensive Economic Partnership Agreement" to implement the agreement's service trade opening commitments and investment negative list commitments, and promote enterprises to make better use of Policy bonus.
From January to October 2022, China's imports and exports to the 14 RCEP member countries will increase by 8.4% year-on-year.
Among them, the bilateral trade between China and Japan, which established a free trade relationship through RCEP for the first time, has developed rapidly. From January to October, Japan exported 15.8 trillion yen to China, an increase of 7.3% over the same period of the previous year; and imported 20.5 trillion yen from China. , an increase of 24.2% over the same period last year.
For the first time, China's import and export trade with South Korea exceeded that with Japan, reaching US$306.3 billion, a year-on-year increase of 4.8%.
ASEAN continues to be the largest trading partner, accounting for 15.2% of China's total foreign trade.
From January to October, China's import and export volume to ASEAN was US$798.4 billion, a year-on-year increase of 13.8%.
Among them, exports were US$463.9 billion, up 20.5% year-on-year; imports were US$334.5 billion, up 5.6% year-on-year.
Vietnam, Malaysia, and Indonesia ranked the top three, with imports and exports reaching US$192.9 billion, US$165.5 billion and US$122.3 billion respectively.
Due to the new triangular trade structure formed in the East Asian production network, China, as the core of the value chain network, has formed a close division of labor with upstream and downstream countries.
Among the member countries, China and Vietnam had the largest trade surplus of US$49.2 billion; China and South Korea had the largest trade deficit of US$33.5 billion.
From January to June 2022, China's actual use of foreign direct investment was US$112.35 billion, a year-on-year increase of 21.8%, of which US$11.45 billion was from RCEP partners, a year-on-year increase of 15.7%.
From January to October 2022, South Korea and Japan's actual investment in China will increase by 106.2% and 36.8% respectively.
In the first half of 2022, China's direct investment in RCEP partners was US$8.43 billion, a year-on-year increase of 3.5%.
After RCEP came into effect, Chinese enterprises actively used the online and offline platforms of key economic and trade exhibitions such as the Silk Road International Expo, Import Expo, and ASEAN Expo to actively carry out multi-field and multi-form economic and trade cooperation with enterprises of member countries.
Regional origin accumulation rules allow enterprises to optimize supply chains, flexibly carry out industrial layout, establish a more refined and complete industrial chain division of labor system, reduce the production cost of final products, and promote the deep integration of regional value chains.
According to data from the General Administration of Customs, since the implementation of RCEP for half a year, my country's export enterprises have applied for 266,000 RCEP certificates of origin and issued a statement of origin, with a value of 97.9 billion yuan, and can enjoy tariff reductions of 710 million yuan from the importing country. For clothing and clothing accessories, plastics and their products, leather products, etc.
The value of imported goods under RCEP is 23.86 billion yuan, and the tariff reduction is 520 million yuan. The main commodities are steel, plastics and their products, mechanical appliances and their parts, etc.
According to the China Council for the Promotion of International Trade, from January to September 2022, enterprises applied for 108,600 RCEP certificates of origin, with a value of US$5.003 billion, and can enjoy US$75 million in tariff reductions from importing countries.
In addition, RCEP also provides an institutional platform for my country's small, medium and micro foreign trade enterprises to reduce tariff costs and seize the international market, injecting new vitality into foreign trade.
In the first half of this year, the collection volume of my country's small, medium and micro foreign trade enterprises exporting to the RCEP region increased by 11.4% year-on-year, and the number of small, medium and micro foreign trade enterprises exporting to countries in the RCEP region increased by 23.1% year-on-year.
In the future, with the improvement of the mechanism, my country's intra-regional trade volume will further increase.
Provide new opportunities for China's sustained economic growth
The entry into force of RCEP means that the liberalization and facilitation of trade and investment in the Asian region has entered a new stage, which has further enriched and developed the connotation of the Asian economic and trade cooperation mechanism. Offered new opportunities.
One is to help reconstruct the regional value chain and maintain the security of the industrial and supply chains.
China, Japan, Japan, and South Korea established free trade relations for the first time through RCEP. The cooperation between China, Japan, and South Korea in the fields of machinery manufacturing, automobile manufacturing, and optoelectronic equipment manufacturing is a regional value chain for the three countries in high-end manufacturing industries such as new technologies and new energy. Cooperation lays the groundwork.
By integrating regional economic and trade rules, especially regional accumulation rules of origin, it will help China and ASEAN and other countries to further strengthen cooperation in the regional value chain, stabilize and expand intra-regional intermediate product trade and investment activities, and strengthen economic links with RCEP partners To alleviate the negative impact of the epidemic and the risks posed by trade protectionism to regional industrial chains and supply chains.
The second is to help improve the level of opening up in an all-round way and build a new system of higher-level open economy.
At present, China's total import and export trade with RCEP member countries accounts for 30% of the total trade volume, and the FTA (free trade agreement) coverage rate has been increased to 35%.
The areas covered by RCEP include not only trade in goods, trade in services and investment, but also high-level modernization issues such as e-commerce, intellectual property rights, and competition policies.
In particular, RCEP will promote the service industry to play a more linking role in the global value chain. Productive services such as finance, logistics, and commerce will be used as intermediate inputs to fully participate in the production and manufacturing of the primary and secondary industries. The backward correlation enhances the international competitiveness of the manufacturing industry and plays an important role in promoting the growth of total factor productivity, promoting the transformation and upgrading of industrial structure and expanding employment.
The third is to help improve the level of institutionalization of the “Belt and Road”.
The trade and investment facilitation policies and measures stipulated in RCEP will help member countries establish a higher-level economic and trade institutional framework. These institutional constructions will become an important part of China's participation in the institutional construction of the "Belt and Road".
In particular, less developed member states will better realize value chain integration by virtue of multi-stage and step-by-step regional cooperation. The economic spillover effect of RCEP provides the best practice for Asian regional inclusive cooperation.
Fourth, it is conducive to the mutual promotion of domestic and international dual cycles.
On the one hand, RCEP builds an institutional open platform, optimizes the layout of foreign trade and investment, promotes domestic industries to fully participate in international and domestic market competition, and provides effective support for a virtuous cycle of the national economy.
On the other hand, by optimizing the regional value chain division of labor and strengthening the determination to deal with external risks, it will play an important role as a stabilizer.
Promote the deepening of regional economic integration
Facing the complex economic situation at home and abroad, my country must steadily expand the opening up of rules, regulations, management, and standards, implement RCEP with high standards, and fully release RCEP dividends.
First, continuously optimize the service system to provide institutional guarantees for better use of RCEP.
Establish and improve a comprehensive service system, develop, optimize or integrate free trade agreement services, and provide enterprises with all-round comprehensive services ranging from tariff preference inquiries, origin operations, customs clearance facilitation, to industrial risk and safety warnings, and commercial arbitration.
Second, stimulate the development vitality of the central and western regions and promote the balanced development of the regional economy.
Relying on the free trade pilot zone to try out the RCEP economic and trade rules first, to provide new impetus for optimizing the business environment.
Guide the central and western regions to combine RCEP with economic development strategies and construction plans, and rely on the advantages of local economy, industry, and location resources to strengthen economic and trade cooperation with member countries, so as to drive economic development.
Third, improve the regional comprehensive development environment and promote the reconstruction of the value chain division system.
As an important achievement in the development process of regional economic cooperation in East Asia, RCEP is an institutional norm promoted by East Asian economies to further strengthen regional economic links and optimize regional value chains, aiming to improve the comprehensive regional development environment.
Therefore, it is necessary to speed up the adjustment of the layout of the regional industrial chain, promote the integration of the manufacturing industry chain and the innovation chain, implement 701 binding obligations with high quality and actively explore the implementation of 170 soft obligations, further improve the trade and investment environment, and provide production factors for technological innovation And institutional guarantees, stimulate the vitality and motivation of micro-enterprises, consolidate and improve the core position of China's regional value chain, and finally realize the reconstruction of the value chain division system.
Fourth, speed up the implementation and upgrade of RCEP negotiations at an appropriate time to give it lasting vitality.
Accelerate the implementation and upgrade of the RCEP negotiations at an appropriate time, accelerate the exploration and cooperation with member states to jointly promote the electronic network of origin, promote the mutual recognition and cooperation of "Authorized Economic Operators (AEO)", etc., and timely carry out investor-state dispute settlement mechanism (ISDS), Government procurement, e-commerce and other follow-up chapter negotiations will further upgrade the economic and trade rules in the fields of digital trade, intellectual property rights, and service trade, continuously promote the deepening of regional economic integration, make full use of system dividends, and continue to improve the overall efficiency of my country's economy and international competitiveness.
(Economic Daily, Chinese Academy of Social Sciences, Institute of Asia-Pacific and Global Strategies: Shen Minghui, Li Tianguo)