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BEIJING: The Regional Comprehensive Economic Partnership (RCEP) agreement, signed by 15 Asia-Pacific countries in November last year, will take effect on Jan 1 in 10 countries – RCEP signatory members that have already completed the ratification procedures.
The agreement has grouped together all of the 10 member states of Asean – comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – and China, Japan, South Korea, Australia and New Zealand to create the world’s largest free trade bloc.
The implementation of the agreement, a big step forward toward regional economic integration, is expected to inject new economic growth impetus into member economies.
For China, the agreement will facilitate its establishment of the new dual-circulation development pattern, which takes the domestic market as the mainstay while letting domestic and foreign markets reinforce each other.
This is because it contains high-level opening-up commitments by member countries for both trade and investment.
Designed to eliminate tariffs on as much as 90% of goods traded between its signatories over the next 20 years once it comes into effect, the RCEP agreement also has high-standard level of liberalisation and facilitation for investment and trade in services.
The full implementation of the RCEP agreement will bring zero-tariff treatment to nearly 30% of Chinese exports.
The agreement will also bring more opportunities for Chinese enterprises to invest in related economies, according to estimates by the Commerce Ministry.
In 2020, China’s exports to RCEP members exceeded US$700bil (RM2.96 trillion), which accounted for 27% of the nation’s total exports.
China’s imports from the RCEP region were worth around US$778bil (RM3.29 trillion), or about 38% of China’s total imports.
Furthermore, the implementation of the RCEP agreement will also reshape the economic relations between China and Japan.
This is thanks to the formation of direct free-trade relations between the two for the first time.
The implementation of the RCEP agreement will enable China and Japan to mutually benefit from lower tariffs on products like machinery, electronic information technology and chemical products.
Under the RCEP agreement, Asean member states will also significantly expand duty-free treatment to Chinese products.
Asean member states such as Indonesia, the Philippines, Cambodia, Myanmar and Malaysia will enlarge their duty-reduction lists for Chinese products.
This includes automobiles, auto parts, motorcycles, chemicals, electromechanical products and steel products.
Chinese enterprises will also be able to lower import costs related to advanced technology, key equipment, key components, consumer goods, pharmaceuticals and medical devices, and production services like design, research and development, energy conservation and environmental protection, to better meet the domestic market’s needs for consumption updates.