To Establish Upstream Supply Chains Under RCEP in SW China

Chongqing- The Regional Comprehensive Economic Partnership (RCEP), signed by 15 Asia-Pacific economies, has already taken effect in 12 member economies, as it went into force in Malaysia on March 18. The trade treaty officially took effect for ten members on Jan 1, followed by South Korea on Feb 1. Up to now, the China Council for the Promotion of International Trade Chongqing Sub-Council has handled 76 RCEP certificates for Chongqing enterprises, with a total amount of RCEP visas reaching 7.27 million U.S. dollars.

According to Sun Tingting, head of the Free Trade Agreement Task Force at China Council for the Promotion of International Trade's Commercial Certification Center, however, RCEP has plenty of content. Enterprises are encouraged to study the chapters on trade in goods, rules of origin, customs procedures, and trade facilitation and understand and master closely related content.

Under China’s Schedule of Tariff Commitments, China will ultimately cut tariffs to zero on 86% of Japanese and South Korean products and 90.5%, 90%, and 90% of the Association of Southeast Asian Nations (ASEAN) Australia, and New Zealand, respectively.

Chinese importers will enjoy the benefits, as they will import advanced technology, important equipment, key components, consumer goods, pharmaceuticals, and nursing equipment at a lower cost, as well as productive import services in terms of design and development, energy conservation, and environmental protection, to better meet the demand for consumer upgrading in the domestic market.

Zybio Inc., a high-tech enterprise specializing in research and development, manufacturing, sales, and technical services of in vitro diagnostic reagents and equipment in Chongqing, has benefited from RCEP, where the company exported nucleic acid test kits and other instruments to South Korea.

With RCEP, the import tariffs on some products were reduced from 6.5% and 8% to zero immediately.

Sun said Japan, China, and Japan have mutually reduced tariffs on products in many areas, such as machinery and equipment, electronics information, and chemicals. Trade among China, Japan, and South Korea focuses on industrial chains with advanced manufacturing industries, including integrated circuits and automobiles and trade networks for differentiated products.

In addition, the ASEAN countries have significantly expanded the scope of zero-tariff products to China.

For instance, Indonesia, the Philippines, Cambodia, Myanmar, and Malaysia have all added new tariff reduction products to China, mainly including automobiles and parts, motorbikes, chemicals, electromechanical, and steel products, where Chinese enterprises can benefit from more categories of products from tariff reduction.

Chongqing Xiduo Knitting Co., Ltd., Chongqing Zhongji Shida Import and Export Trading Co., Ltd., Chongqing Changyuan Group Limited, and Chongqing Saite Corundum Co., Ltd. also export products to Japan, South Korea, and ASEAN countries through the RCEP agreement.

Up to now, the China Council for the Promotion of International Trade Chongqing Sub-Council has handled 76 RCEP certificates for Chongqing enterprises, with a total amount of RCEP visas reaching 7.27 million U.S. dollars.

Chongqing enterprises should try to choose RCEP member companies to establish upstream supply chains to fully enjoy the tariff reductions brought by the FTA cumulative rules of origin, reduce production costs and increase the international competitiveness of export products, according to the China Council for the Promotion of International Trade Chongqing Sub-Council.

(Shi Jiaqi, as an intern, also contributed to this report.)