Starting from January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) will enter into effect for ten countries, namely Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, China, Japan, New Zealand and Australia. Republic of Korea will join the rank to implement RCEP from February 1. The entry into force of RCEP will deliver tangible benefits to companies and consumers within the region, including China.

Regarding tariff concessions, over 90% of commodity trade within the region will enjoy zero tariff in a phased manner. From January 1, 2022, over 65% of China’ trade with ASEAN, Australia and New Zealand will see immediate tariff elimination, whereas the proportions with ROK will reach 39% and 50%. The entry into force of RCEP represents establishing free trade relations with Japan, with 25% and 57% of bilateral trade enjoying immediate tariff elimination. Eventually 86% of Japan’s exports to China will be exempt from tariff, whereas 88% of China’s exports to Japan will receive zero-tariff treatment.

For instance, with tariff cuts, ASEAN’s coconut juice, pineapple products and paper products, and Japan’s induction cookers, electric ovens, most machinery equipment, instruments and apparatus, and car parts will be exempt from tariff gradually when entering the Chinese market. China’s exports of machinery products, instruments and apparatus, textiles and garments and some aquatic products and vegetables to Japan will also enjoy zero tariff in a phased manner. The tariff concessions offered by RCEP will greatly reduce production costs for companies within the region and provide more quality and cheaper products to consumers.

Regarding trade in services, member countries generally commit to open over 100 service sectors, covering areas of finance, telecommunications, transportation, tourism and research and development. They also promise to turn to use negative lists within six years upon the entry into force of the Agreement to further liberalize markets. This means ample opportunity for emerging business models and patterns such as cross-border e-commerce, internet finance, teleworking, online education, telemedicine and online trade fairs. People within the region will also enjoy more benefits and convenient services.

Regarding rules of origin (ROO), the originating materials from other RCEP members in the production by one member’s companies can be all considered as originating materials, so that the value of originating materials can be accumulated, making it easier for members to reach the threshold beyond which they can enjoy tariff concessions. For instance, for a a fridge produced by a Chinese company and exported to ASEAN, in production it uses components (such as the compressor) produced by South Korea and the value of such materials exceeds 60% of the fridge’s price. Under the China-ASEAN Free Trade Agreement, this fridge can’t enjoy tariff concessions as it falls short of the 40% threshold for regional value content. However, under RCEP, the compressor produced by South Korea can be regarded as originating materials, hence the fridge using South Korea’s compressor and exported to ASEAN can enjoy tariff concessions. This common ROO provided in RCEP will help minimize production costs and maximize trade efficiency within the region, which will intensify cooperation on industrial and supply chains, and improve consumers’ sense of fulfillment and well-being. Thank you.