RCEP and trade rules continue to lift strong China-ASEAN trade

09/12/2020    24

China's domestic manufacturers have continued to receive overseas orders from Southeast Asia, helping retain strong trade growth with the trading bloc, despite disruptions caused by COVID-19 this year.

One such manufacturer includes Zhejiang Seven-star Textile, a textile factory in Jinhua in east China's Zhejiang Province. The textile factory's machines have been running at full capacity to meet increasing demand, and the factory said demand has largely been driven by orders from Southeast Asia.

"Our white cotton fabric shipped to the Association of Southeast Asian Nations (ASEAN) alone has surged 30 percent so far this year. It's a big encouragement to everybody working here. Also, we enjoy the preferential rule of origin with ASEAN. The tariff cuts really saved us a lot of money," said Zhejiang Seven-star Textile manager Chen Huan.

The latest data on Monday showed that ASEAN remained China's largest trading partner from January to November, as trade totaled nearly $610 billion in the first 11 months of the year, up 5.6 percent compared to last year. Streamlined customs clearance has helped boost trade there as well.

"Factories first file for preferential certificates of origin. And in less than an hour, their overseas clients will receive all the information," said Jinhua customs officer Chen Jiangfeng, which comes under the Hangzhou Customs district.

RCEP to boost global trade

The recently signed free trade agreement, the Regional Comprehensive Economic Partnership (RCEP), is expected to further boost China-ASEAN trade. Tariffs within the trade bloc, which covers all 10 ASEAN members and Australia, New Zealand, Japan, South Korea, and China, are expected to be reduced further.

"Those tariff cuts have now reached more countries in the Asia-Pacific thanks to the recently signed RCEP -- the world's largest free trade agreement," said University of International Business & Economics China Institute for WTO Studies dean Tu Xinquan.

Meanwhile, China Association of International Trade senior fellow Li Yong told CGTN that RCEP creates more trade resiliency and has a huge impact on global trade in the next 10 years.

"The RCEP effect is going to contribute net export of about $516 billion. At the same time (in 2030), the RCEP will also contribute a net national income of about $186 billion. That's huge," said Li, referring to modeling by Peterson Institute for International Economics.

On Monday, data from the General Administration of Customs showed that China's exports in November rose at the fastest pace since February 2018, helped by strong global demand for industrial products and raw materials, though imports were slower than expected. Global demand from the ASEAN, Europe, and the U.S. also increased.

Source: CGTN