Leveraging the role of RCEP as an "integrator" to unleash greater potential for economic and trade cooperation

A full cargo plane from Ho Chi Minh City, Vietnam arrived at Wuwei International Airport in Nanning, Guangxi on March 30th with a full load of about 500 kilograms of fresh durian. After passing the local customs inspection and quarantine, it successfully cleared customs. This is the first time that fresh durian from Vietnam has entered the country from a domestic airport port since the Regional Comprehensive Economic Partnership Agreement (RCEP) came into effect.
Over the past year since the official implementation of RCEP, it has promoted regional trade and economic development, enriched regional commodities, and gradually become an important engine for the recovery of the Asian economy. And all of this stems from the dividend release of RCEP, which has just begun. In 2023, with the full implementation of RCEP in ASEAN countries such as Indonesia and the Philippines, the rapid recovery of China's economy and the steady progress of Chinese path to modernization, the positive effects continue to spill over, bringing more momentum to the Asian regional economy.
"Although RCEP plays a great role in promoting regional trade, it is not the end of cooperation among Asian countries." Zhang Yuyan, director of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, said in a recent interview with the media that the next step to further tap the cooperation potential of RCEP can be thought from two aspects. Firstly, from the perspective of inventory, there are currently 20 agreements covering e-commerce, intellectual property protection, competition policy, government procurement, etc. It is necessary to make good use of these existing policies and implement them solidly. Secondly, from an incremental perspective, compared to some other trade and investment agreements, the level of RCEP is not yet the highest, and some contents are still not included, such as environmental protection and state-owned enterprise management.
RCEP is an open system, and we hope that more economies, especially those in the region, can join, which can further expand the trade creation effect of RCEP. In addition, Asia's development is not only a problem for Asia itself, but also a significant contribution to the stable economic growth of the entire world, "said Zhang Yuyan.
The implementation of RCEP is beneficial for partners to share China's opening up opportunities and development dividends. From a trade perspective, the total import and export volume between China and other members of RCEP reached 12.95 trillion yuan in 2022, a year-on-year increase of 7.5%, accounting for 30.8% of China's total foreign trade. Among them, the growth rate of trade between China and ASEAN is far ahead, with the import and export scale reaching 6.52 trillion yuan, an increase of 15%. Among them, the growth rate of imports and exports to Indonesia, Singapore, Myanmar, Cambodia, and Laos has all exceeded 20%. China imports 46.2%, 10.4%, and 10.2% of mechanical and electrical products, metal mines, and ore, as well as consumer goods from other RCEP member countries. From an investment perspective, in 2022, China's non-financial direct investment in other RCEP members reached $17.96 billion, an increase of 18.9%, while absorbing their direct investment of $23.53 billion, an increase of 23.1%. The growth rate of two-way investment is higher than the overall level.
Zhang Jianping, Deputy Director of the Academic Committee of the International Trade and Economic Cooperation Research Institute of the Ministry of Commerce, said in an interview with China Trade Daily that thanks to the 40% cumulative rule of origin of RCEP, the effective implementation of RCEP is conducive to international division of labor among members through their respective comparative advantages, making cooperation between members more close and increasing employment opportunities. Of course, this effect needs to be gradually reflected over a certain period of time. Currently, relevant government agencies and business associations still need to carry out education and training around the business of enterprises, so that enterprises can understand and use rules
RCEP promotes mutual benefit and win-win development among countries, establishing a new pattern of open regional economic integration, which undoubtedly plays an irreplaceable role in the world economy's response to the severe challenges of anti globalization. On the one hand, RCEP will accelerate the further relaxation of market access for goods, services, investment and other fields among its members, and gradually unify rules of origin, customs procedures, inspection and quarantine, technical standards, etc. This will promote the free flow of economic factors within the region, expand and upgrade the consumer market. On the other hand, the differences in economic development level, industrial foundation, resource and factor endowments among members are also challenges to further tap into the potential of cooperation.
In response, Professor Liu Wen from the School of Business at Shandong University believed in an interview with China Trade Daily that RCEP is a "comprehensive, modern, high-quality, and mutually beneficial" free trade agreement, which also reflects the characteristics of inclusiveness. It includes developed countries such as Japan, South Korea, Australia, Singapore with high levels of openness, as well as countries in need of technical assistance such as Cambodia, Myanmar, and Laos. Therefore, in order to promote cooperation in areas such as industrial layout and service trade within the RCEP region, it is necessary to leverage the role of RCEP as an "integrator" of regional economic and trade rules, accelerate the optimization and integration of regional economic and trade rules, and fully tap into the benefits of the RCEP system.
RCEP has been in effect for over a year, mainly reflected in the advantages of trade, such as the increase in imports and exports between China and RCEP countries, as well as investment. However, in the medium to long term, the reduction of trade barriers will be more conducive to the upgrading and transformation of China's manufacturing industry and the collaboration and stratification of regional industrial chains, which is worth the attention of foreign trade enterprises, "Liu Wen added.
The reporter noticed that in recent years, China's trade in goods with RCEP partners has accounted for about 30% of China's total foreign trade in goods. Among them, ASEAN has also risen to become China's largest trading partner since 2020. In the context of intensified strategic competition among major countries and complex geopolitical conflicts, the global industrial and supply chains are frequently obstructed, broken or reshaped, causing serious impacts on the industrial security and stability of various countries. In this context, participating in RCEP is an important step taken by China in its high-level opening-up to the outside world.
Liu Wen believes that the next step to tap the cooperation potential of RCEP is to form joint forces with initiatives such as the construction of free trade pilot zones and the joint construction of the "the Belt and Road". In addition to policy promotion, relevant institutions in China also need to start from the RCEP rules, provide precise training based on the industry and type of the enterprise by country and product category, which is also an important demand of the majority of enterprises at present