On January 1, 2023, the first anniversary of the entry into force of the Regional Comprehensive Economic Partnership Agreement (RCEP).
Over the past year, against the backdrop of rising anti-globalization trends and sluggish world economic recovery, RCEP has fully released mechanism dividends, effectively deepening the economic links between Asian economies, boosting confidence in regional trade and investment in Asia, and further strengthening the regional economy. The resilience of domestic industrial chains and supply chains will inject new momentum and vitality into regional economic cooperation and global economic development.
The entry into force of RCEP allows partners to more fully share the opportunities and development dividends of China's opening up. According to data from the Ministry of Commerce, from January to November 2022, the total import and export volume between China and other RCEP member countries reached 11.8 trillion yuan, a year-on-year increase of 7.9%, accounting for 30.7% of China's total foreign trade import and export. Among them, China's exports to other RCEP member countries increased by 17.7% year-on-year, exceeding the overall growth rate of China's exports by 5.8 percentage points.
Intra-regional economic and trade ties are also getting closer due to RCEP. According to the agreement, more than 90% of the goods trade in the region will eventually achieve zero tariffs. According to the cumulative rules of origin, as long as the value-added part of the product in the process of processing belongs to 15 member countries, and the cumulative value-added exceeds 40%, it can enjoy the corresponding tariff preference. This will significantly boost the overall regional economic, trade and investment growth, and bring more confidence to enterprises in the region to carry out transnational cooperation.
China, Japan, and Japan and South Korea have established free trade relations for the first time through RCEP, and the dividends of opening up are particularly obvious. According to data from the Ministry of Commerce, from January to November 2022, South Korea and Japan's actual investment in China increased by 122.1% and 26.6% year-on-year respectively. Under the RCEP framework, China, Japan and South Korea have cooperated in the fields of machinery manufacturing, automobile manufacturing, and optoelectronic equipment manufacturing, laying the foundation for regional value chain cooperation among the three countries in high-end manufacturing industries such as new technologies and new energy.
The entry into force of RCEP has injected strong growth momentum into emerging markets. RCEP integrates 27 trade arrangements and 44 investment agreements currently signed and implemented by 15 member countries, further promoting regional economic integration and becoming the biggest starting point for developing regional economic growth potential. The latest report of the Asian Development Bank raised the economic growth forecast for Southeast Asia in 2022 from 5.1% to 5.5%, reflecting to a certain extent the RCEP’s expectation of boosting the ASEAN countries’ economies.
In the face of many uncertainties and downside risks in global trade, RCEP has provided rare stability and certainty for the interregional and even the world economy. Peter Drysdale, director of the Institute of East Asian Economics at the Australian National University, said that the first year of RCEP's entry into force has shown the importance of filling the gaps in free trade agreements, boosting regional trade, and strengthening regional supply chains. It has the potential to serve as a platform to Asian trade dividends are projected globally.
The vitality of RCEP comes from the common will to create development opportunities through mutually beneficial cooperation, and also from the guarantee of the agreement's continuous adjustment and optimization mechanism. With the in-depth implementation of RCEP, more policy dividends will continue to emerge. Indonesia will formally fulfill its RCEP commitments on January 2, 2023, and Hong Kong, China, is also advancing its application to join RCEP. In addition, according to regulations, most member states will fulfill more commitments in each new year, including lowering tariffs, expanding market access, and reducing barriers. These commitments will reduce the cost and difficulty of regional allocation of various factors, and promote the formation of new trade and investment opportunities.
At present, countries in the region have entered a critical stage of economic recovery, and some countries are facing difficulties such as supply chain disorder, food and energy shortages, and increasing inflationary pressures. Whether it is to deal with the current downward pressure on the economy or to focus on the long-term development of the future, it is necessary to deepen regional economic cooperation. The key is to make full use of RCEP's market opening commitments and rules to release the dividends of the agreement to a greater extent. China will continue to improve the efficiency of comprehensive utilization of free trade agreements, expand the network of high-standard free trade areas facing the world, and further increase the level of openness in trade in goods, trade in services and investment markets.
It is foreseeable that this free trade area with the largest population, the most diverse member structure and the greatest development potential will promote the region to achieve higher-quality and deeper economic integration, and inject more strength into the world economy that is going through the ups and downs. positive energy.
