On January 2, 2023 local time, the Regional Comprehensive Economic Partnership Agreement (RCEP) officially entered into force for Indonesia. As a supporting measure of the agreement, the Indonesian government also promulgated a new regulation on the origin of goods and the issuance of origin documents for locally exported goods, aiming to help companies better benefit from RCEP. The regulations came into effect simultaneously on January 2 local time.
Shi Ziming, Minister Counselor of the Chinese Embassy in Indonesia, said in an interview with a reporter from International Business Daily: "RCEP has made a relatively high level of commitment to investment in five non-service sectors, including manufacturing, agriculture, forestry, fishery, and mining, in the form of a negative list. , providing institutional guarantees for e-commerce cooperation and cross-border e-commerce. The above-mentioned areas are the key areas of China's investment in Indonesia. Regionally accumulated rules of origin will not only help large companies take advantage of the comparative advantages of different countries in the region and optimize their industrial layout , to enhance the overall competitiveness, small and medium-sized enterprises can also rely on their own advantages to make flexible decisions and tap more business opportunities. RCEP clarifies measures such as investment protection, investment promotion and investment facilitation, and improves the transparency of investment policies, which will further improve the development of Chinese-funded enterprises in Indonesia business environment."
Zhang Chaoyang, chairman of the Chinese Chamber of Commerce in Indonesia, told the International Business Daily reporter: "The entry into force of RCEP in Indonesia is an important step in promoting the full implementation of RCEP. It will inject new impetus into the development of regional economic integration, regional and global economic growth, and further promote regional development. Cooperative development of industrial chain and supply chain.”
Benefiting Chinese and Indonesian Enterprises
The reporter noticed that on the effective day, local customs issued the first RCEP certificate of origin to Indonesia for local export enterprises to help enterprises export: Lianglu Cuntan Customs, a subsidiary of Chongqing Customs, exported a batch of goods to Indonesia for Chongqing Kaibao Power Machinery Co., Ltd. The rammer issued the RCEP certificate of origin, and the visa amount exceeded 450,000 yuan. With this certificate, this batch of goods can enjoy zero-tariff preferences in Indonesia; Nantong Customs, a subsidiary of Nanjing Customs, exported a batch to Indonesia for Nantong Changhai Food Additives Co., Ltd. Aspartame worth 117,800 US dollars issued a RCEP certificate of origin. With this certificate of origin, the company can enjoy a tariff reduction of about 42,000 yuan for this batch of goods...
"After RCEP takes effect in Indonesia, Indonesia can also enjoy certain import tax reductions and exemptions for imports from China." An industry insider who has long been concerned about China-Indonesia economic and trade relations told the reporter of International Business Daily.
The industry insider gave an example to the reporter that the import tax reduction for iron and steel products is particularly large, with a reduction rate of 12.5% to 20%. After the import tax reduction, Indonesian local import enterprises, whether they are state-owned engineering construction units or private enterprise trading companies, only need to pay 11% value-added tax and 2.5% import value-added tax. At the same time, the competitive advantage of China's steel industry itself is combined with the benefits of import tax reduction and exemption. In the future China-Indonesia joint construction of the "Belt and Road" project, Indonesia is bound to increase the use of Chinese steel, thereby promoting the export of Chinese steel products.
"In Ali International Station, Indonesia is the fastest growing number of buyers among RCEP countries. In December 2022, the number of Indonesian buyers on Ali International Station ranked eighth in the world and ranked first among RCEP countries, which shows Indonesia's demand for Chinese supplies. It’s huge.” Su Changrong, country manager of Alibaba International Station’s new Malaysia, Thailand and Indonesia, told the reporter of International Business Daily that the entry into force of RCEP in Indonesia also provides more opportunities for Indonesian products to enter the Chinese market. There are about 30,000 export-oriented small and medium-sized enterprises in Indonesia, and there are currently about 170 gold medal suppliers on Ali International Station. With the official entry into force of RCEP in Indonesia, Ali International Station will take advantage of the benefits released by the agreement, invest more channel managers in the Indonesian market, further expand the number of suppliers, and strive to expand to 1,000 in the next two to three years, allowing Chinese consumers to buy Find more high-quality and characteristic Indonesian products.
Expand new space for cooperation
Indonesia is the largest archipelagic country in the world and the only member of the G20 in ASEAN. Its population, area and economic volume all account for about 40% of ASEAN. Indonesia is also the country that initiated the "21st Century Maritime Silk Road".
In recent years, under the strategic guidance of the two heads of state, China-Indonesia relations have flourished, and the importance of partnership cooperation between the two sides has become increasingly prominent. In July 2022, Indonesian President Widodo visited China. In November, Chinese President Xi Jinping attended the G20 Summit and held talks with Joko. In this context, the two countries have docked the "Belt and Road" initiative and the concept of "Global Maritime Fulcrum" to jointly build a China-Indonesia community with a shared future. It is a model of great powers uniting for self-improvement, mutual benefit and win-win results.
In 2022, China-Indonesia economic and trade cooperation will make new progress: the bilateral trade volume from January to November will reach 136 million US dollars, a year-on-year increase of 22.6%. In the first three quarters, China's direct investment in Indonesia reached US$5.19 billion, a year-on-year increase of 128%. China continues to be Indonesia's largest trading partner, import source and export market.
"RCEP aims at a comprehensive, modern, high-quality and inclusive free trade agreement, creating more opportunities for countries including Indonesia to participate in the regional market, and at the same time helping to break the bottleneck of bilateral and multilateral economic and trade cooperation, consolidate, deepen and expand new The cooperation space is of great significance," Zhang Chaoyang said.
In the future, in order for Chinese and Indonesian enterprises to continue to enjoy RCEP dividends, Zhang Chaoyang suggested that relevant enterprises should do the following five aspects: first, carefully study the preferential tax rates of the free trade agreement, and accurately select the target country and target market for their main export products; It is to strengthen business strategic planning and strategic planning, and optimize the investment layout based on the RCEP tax reduction situation combined with corporate advantages; the third is to benchmark international high standards and improve foreign investment capabilities; the fourth is to prepare for long-term development and improve localization attributes. Strengthen cultural integration and maximize the development benefits brought by the RCEP agreement to enterprises; fifth, enterprises can make full use of the policy advantages of bilateral local currency settlement (LCS) and enjoy the convenience of bilateral trade settlement.
