Also, the expert particularly emphasised the positive impact of RECP on the electronic information industry, saying, “Because the overall competitiveness of China’s electronic information industry is particularly strong, we have a high market share, both in processing and assembly, and in independent brands. Therefore, in the market of RCEP, the electronic information industry will gain relatively large benefits. It can also play a positive role in the restructuring and transformation and upgrading of China’s economy.”

“China has proposed a new development pattern of a double cycle based on a large domestic cycle as well as high-quality development, and RCEP provides us with a huge institutional platform for the international cycle, on which we can develop two resources more efficiently: international resources and domestic resources; and also better develop two markets: international and domestic markets.” “Because the RCEP has rules for financial cooperation in all aspects of trade and investment and finance, as well as measures for trade and investment liberalisation and facilitation.” “Our transaction costs will drop significantly, efficiency will be greatly improved, and we will see a significant boost to the whole of China’s foreign trade, and two-way investment in the future, and our employment and GDP will both gain new growth momentum and support on this platform.” the expert said.

Intra-regional supply chains to become closer.

In the context of the increasingly detailed international division of labour and the further acceleration of globalisation and regional integration, for the future development trend of the global industrial chain, the expert believes that the future global industrial chain will be more agglomerated, and will form the agglomeration effect of industry and the scale effect of industry. The expert believes that based on the rules of RCEP, RCEP will develop into the most integrated, perfect and beaten supply chain system in the world in the future.

Also, both China’s intra-regional trade and intra-regional investment will increase significantly in the future, for example, China’s establishment of offshore industrial parks in ASEAN countries will further accelerate. This will bring more jobs and tax revenue, and will also improve our overall social development.

Now that the rules of global trade and investment are changing, experts believe that RCEP represents an important part of the development of trade and investment rules in the 21st century, and several countries are continuing to make efforts and contributions to the formation of a new global trade and rules system.

In the global context, the RCEP is an important complement and support to the multilateral trading system of the WTO, and the 21st century is the century of the Asia-Pacific, which will move towards integration in the future, in which the RCEP will play a very important guiding role.

Intra-regional supply chain value chains will be further integrated and developed

Rules of origin will promote the integration and development of intra-regional industrial, supply and value chains. RCEP rules of origin using the principle of regional accumulation will increase the flexibility and diversity of industrial and supply chain layouts, and help regional enterprises establish a sound transnational industrial division of labour system. For example, RCEP member countries can rely on the resource factors and intermediate goods production base of developing countries and the technological advantages of developed economies in the region, and make full use of the regional cumulative rules of origin to form a closed loop of industrial chains, supply chains and value chains in the region.

The combination of positive and negative services lists promotes the stable development of regional industrial, supply and value chains, and RCEP countries have made liberalisation commitments in the area of trade in services that are higher than the level of their respective “10+1” FTAs, and have adopted a combination of positive and negative lists to promote the overall trade in services in the region, taking into account their respective interests. This reflects the characteristics of inclusiveness, flexibility and progressiveness, and releases stable expectations of a high level of liberalisation of trade in services in the region in the future.

Uniform e-commerce rules will accelerate the transformation and upgrading of regional industry chains, supply chains and digitalisation. The RCEP is the first time in the Asia-Pacific region to agree on a comprehensive range of multilateral e-commerce rules, reaching consensus on cross-border information transmission, information storage, online consumer protection, personal information protection, cyber security and other key issues, providing a stable and convenient institutional environment for the development of the digital economy and digital trade, which will have a profound impact on promoting the digital transformation of regional industry supply chains and the participation of Asian economies in the construction of global digital trade and economic rules.

Historic opportunity for Hainan Free Trade Port to establish a regional market for ASEAN

Seize the “window of opportunity” to establish a regional market for ASEAN as soon as possible. Hainan Free Trade Port should seize the “window of opportunity” between the entry into force of RCEP and its mature operation, make good use of the overlapping advantages of the free trade port policy and RCEP rules, and make an important breakthrough in establishing an ASEAN-oriented regional market as soon as possible, which will be conducive to achieving bilateral and multilateral economic and trade cooperation in the region under the RCEP framework as soon as possible. This is not only conducive to the early harvest of bilateral and multilateral economic and trade cooperation within the RCEP framework, but also provides an important platform for all types of enterprises to invest in the ASEAN market and share in the large Chinese market.

Important progress has been made with pragmatic initiatives to promote the integration of Hainan’s free trade port into the ASEAN regional tourism, commodity and factor markets. For example, using import tariff exemptions and origin policies, etc., to attract agricultural products from ASEAN countries to be imported and refined in Hainan, with the products adding more than 30% value before entering China’s large 1.4 billion market tariff-free; after the epidemic has stabilised, Hainan should take the lead in developing cruise tourism cooperation with island regions of ASEAN countries, implementing tourist exchange, resource sharing and joint marketing, as well as promoting the docking of tourism service standards and the facilitation of cross-border movement of personnel; relying on financial liberalisation policies, establishing a regional capital market to serve the investment and financing needs of ASEAN enterprises.

The policy of establishing a regional market for ASEAN should be concretised as soon as possible. It is necessary to further promote the integrated innovation of the investment liberalisation and facilitation system of the Hainan Free Trade Port in four aspects: investment protection, liberalisation, promotion and facilitation, with reference to the RCEP trade and investment rules; to study the negative list of foreign investment access in line with the CPTPP, introduce the ratchet mechanism and strengthen the opening expectations of all parties for the Hainan Free Trade Port; to align the list of tariff concessions with the RCEP, and reinforce expectations for the opening up of Hainan’s free trade port. The free trade port’s “one negative, three positive” zero tariff list, expanding the coverage of “zero tariff”; develop a negative list of cross-border trade in services that is no lower than the highest level of RCEP commitments, and strengthen the alignment with the rules of professional services management standards of ASEAN countries such as Singapore. Drawing on RCEP customs procedures and trade facilitation provisions, develop customs inspection procedures and a fast-track customs clearance system for Hainan’s free trade port, including agricultural products.

RCEP V.S. TPP

China did not participate in the Trans-Pacific Partnership (TPP), which the United States began negotiating during the Obama administration, and after the Trump administration announced its withdrawal from the TPP in 2017, Japan took over and renamed it the comprehensive and advanced TPP (“CPTPP”), which China still does not participate in.

Some argue that the RCEP is a strategy adopted by China to hedge against the impact of the TPP. However, others point out that RCEP is more comfortable and operational for developing countries such as China and Indonesia. the TPP has higher standards and is more comfortable for developed countries.

In fact, China does not oppose to the TPP, on the contrary, China is open and tolerant to the CPTPP, who is also looking at exploring how it can move together towards a future Asia-Pacific FTA in the future through the two tracks of RCEP and TPP.

By Sherry Song Dhu