Several local governments in China have unveiled plans to implement the Regional Comprehensive Economic Partnership (RCEP), a sign that the country is taking steps to further open up its market to other Asia-Pacific member countries of the free trade pact.

Inked in November 2020, RCEP aims to reduce tariffs to zero on more than 90% of the goods traded among its members — 10 Southeast Asian countries and five other Asia-Pacific nations including China, Japan and South Korea. The 15 member countries account for about 30% of the global GDP, making the free trade pact the world’s largest. The agreement has taken effect for most of the 15 countries, including China, since the beginning of the year.

In January and February, the governments of Jilin and Yunnan provinces as well as Shanghai municipality released plans to implement the agreement. The local governments pledged to promote cooperation with other RCEP member countries, make imports clearance more convenient, speed up the development of the cross-border e-commerce industry, and improve the business environment.

The governments have different focuses in the implementation of RCEP due to the differences in geographical location and industrial structure.

The Shanghai government, for instance, vowed to speed up the development of offshore trade and re-export trade, and promote advanced manufacturing, trade in services and digital trade in consideration of the advantages of the city’s industrial structure, according to an official notice released on Feb. 18.

The Shanghai government also said it will support companies in expanding imports of advanced technology, equipment and key parts in fields such as integrated circuits, auto parts and medical devices from other RCEP member countries. In addition, it will encourage imports of energy and resource products, as well as agricultural products that are in short supply.

Southwest China’s Yunnan province and Northeast China’s Jilin province, which are both border areas, have vowed to focus on developing cross-border logistics and trade, especially of local agricultural products.

In implementing the RCEP, local governments share the goal of further opening up to other countries, and promoting high-quality development, said Cui Fan, a trade professor at the Beijing-based University of International Business and Economics.

But different regions may follow different strategies, he said. For instance, China’s central and western regions are expected to focus on the construction of new land-to-sea routes and China-Europe rail. Southwestern regions including Yunnan and the Guangxi Zhuang autonomous region can promote cross-border trade activities with the 10 member countries of the Association of Southeast Asian Nations (ASEAN); the focus of metropolises like Shanghai and Shenzhen can be on building offshore-trade hubs, as well as global financial and shipping centers, said Cui.

With RCEP coming into effect, China will have a more stable and solid connection with Southeast Asia and surrounding Asian countries, with the size and quality of trade and investment further improving, he said.

“RCEP is an important step in China’s opening-up process,” said Cui. The gradual implementation of RCEP will lay a solid foundation for China to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a multilateral trans-Pacific trade pact, he said.

Source: Caixin Global

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