Beijing, November 15th (Xinhua) – Injecting Strong Power into Regional and Global Economic Growth – Interpreting the Signing of the Regional Comprehensive Economic Partnership Agreement
Xinhua News Agency reporters Wang Zhuolun, Yu Jiaxin, and Zheng Mingda
On November 15th, the Regional Comprehensive Economic Partnership (RCEP) was signed. After 8 years of negotiations, the world’s largest free trade area has finally been declared and officially set sail.
What is the significant significance of the signing of RCEP for the region, the world, and China, as it covers the largest population, has the most diverse member structure, and has the greatest development potential?
This is the logo door of the China (Shanghai) Pilot Free Trade Zone, taken on November 11th. Photo by Xinhua News Agency reporter Fang Zhe
The Victory of Multilateralism and Free Trade
There are a total of 15 member countries that have signed the RCEP, including 10 ASEAN countries and China, Japan, South Korea, Australia, and New Zealand. The total population is 2.27 billion, GDP is 26 trillion US dollars, and total exports are 5.2 trillion US dollars, all accounting for about 30% of the global total. The establishment of the RCEP Free Trade Zone means that about one-third of the global economy will form an integrated large market.
Such a big market has not come easily – RCEP was launched by ASEAN in 2012. After eight years and 31 rounds of formal negotiations, especially since this year, members have overcome the huge difficulties caused by the COVID-19, fully completed the market access negotiations, and completed the legal review of more than 14000 pages of text. Finally, the agreement was signed as scheduled during the Fourth Leaders’ Meeting, becoming the most important achievement in the construction of East Asian economic integration in the past 20 years.
It is reported that RCEP requires all 15 member states to commit to reducing tariffs, opening up markets, and reducing standard barriers. Some South Korean media predict that after the RCEP takes effect, the tariffs on car parts exported from South Korea to Indonesia are expected to decrease from the current 40% to zero.
This is a photo taken on November 3rd at the container terminal of Yangshan Port in Shanghai. Photo by Xinhua News Agency reporter Wang Xiang
Ruan Zongze, Executive Vice President of the China Academy of International Studies, described the signing of this agreement as “crucial and timely”. “In the special context of the rampant epidemic, severe global economic recession, shrinking international trade and investment, and intensified protectionism and unilateralism, all parties are able to reach a consensus on RCEP, declaring the victory of multilateralism and free trade, which will effectively boost all parties’ confidence in economic growth.”
Analysts point out that RCEP encompasses major countries in East Asia and will inject strong impetus into regional and global economic growth. According to internationally renowned think tanks, by 2025, RCEP is expected to drive member countries to increase their exports, outbound investment stock, and GDP by 10.4%, 2.6%, and 1.8% respectively compared to the baseline.
This is a collage photo, with the image above showing the “Amory Store” inside the headquarters building of Amory Pacific in Longshan District, Seoul, South Korea, taken on October 27th (Xinhua News Agency reporter Wang Jingqiang); The following picture shows visitors trying out skincare products at the Amory Pacific booth in the consumer goods exhibition area of the 3rd China International Import Expo on November 8th (photographed by Zhang Yuwei, reporter from Xinhua News Agency). Shen Jizhong
In the first three quarters of this year, ASEAN historically became China’s largest trading partner, with a total trade volume of $1055 billion between China and other RCEP members, accounting for approximately one-third of China’s total foreign trade. Such a huge trade volume, through reducing tariffs, will undoubtedly generate a huge “trade creation” effect.
It is worth mentioning that through the signing of RCEP, a new free trade partnership has been established between China, Japan, and South Korea, which originally did not have a free trade agreement, further enhancing the degree of free trade within the region.
“The achievement of RCEP will help promote a higher level of economic integration between China, Japan, and South Korea, and lay the foundation for the future signing of a China Japan South Korea free trade agreement,” said Wang Shouwen.
On November 10th, visitors walked out of the booth of the Japan Trade Revitalization Agency in the Food and Agricultural Products Exhibition Area of the 3rd CIIE. Photo by Xinhua News Agency reporter Chen Yehua
An important platform for China’s higher-level opening-up to the outside world
Accelerating the implementation of the free trade zone strategy is an important part of China’s new round of opening-up to the outside world.
The 14th Five Year Plan proposes a clear proposal to build a global network of high standard free trade zones;
Analysts point out that the establishment of the RCEP Free Trade Zone will provide tremendous assistance for China to build a new open economic system in the new era, forming a new development pattern with domestic circulation as the main body and domestic and international dual circulation promoting each other.
This is a collage photo, the above picture shows employees of Ailai Faxi New Zealand company working on the ice cream production line (information photo, published by Xinhua News Agency); The following picture shows staff showcasing ice cream imported from New Zealand at the G’nature booth of the 3rd China International Import Expo on November 7th (photographed by Zhang Yuwei, reporter from Xinhua News Agency). Shen Jizhong
Two sets of numbers best confirm the “gold content” of RCEP:
——After the signing of RCEP, China will sign 19 free trade agreements with foreign countries and 26 free trade partners;
At a food company in Danfeng County, Shangluo City, Shaanxi Province, the anchor is conducting an online live broadcast (photographed on July 20th). Photo by Xinhua News Agency reporter Liu Xiao
Bai Ming, Deputy Director of the International Market Research Institute of the Research Institute of the Ministry of Commerce, stated that the signing of RCEP will help China further optimize its foreign trade and investment layout through more comprehensive, in-depth, and diversified opening-up, continuously align with international high standard trade and investment rules, and build a higher level of open economic new system.
At present, it is still some time before the RCEP finally takes effect: according to regulations, the RCEP agreement needs to be approved by at least 9 out of 15 members before it can take effect, including at least 6 ASEAN member countries and at least 3 countries from China, Japan, South Korea, Australia, and New Zealand.
According to Wang Shouwen, the members of RCEP will each fulfill their domestic legal approval procedures and strive to promote the early entry into force and implementation of the agreement. Various countries have accelerated their domestic approval procedures, and China will also work together with all parties to strive for the early benefits of the RCEP agreement to local enterprises and people.