Responding To RCEP To Improve The Supply Chain Of The Industrial Chain

- Mar 18, 2021-

Recently, at the China Macroeconomic Forum Macroeconomic Hot Issues Seminar, the report "China's Opportunities and Challenges in the RCEP Era" was released. Last year, the RCEP jointly signed by the ten ASEAN countries and China, Japan, South Korea, Australia, and New Zealand marked the establishment of a free trade zone with the largest population, the largest economic and trade scale, and the most potential for development in the world.

The report believes that for the economic development of East Asia, the establishment of the RCEP Free Trade Zone is a new milestone in East Asian regional economic integration, which will significantly optimize the overall business environment in the region and further enhance the trade creation effect brought by the Free Trade Agreement. RCEP will promote the integration of regional industrial chains, supply chains and value chains, promote the free flow of economic factors in the region, strengthen cooperation in the division of labor among members, promote the expansion and upgrade of the regional consumer market, and promote the further development of the regional industrial chain supply chain.

"RCEP is a mutually beneficial agreement between China and the ten ASEAN countries and other countries. It has brought positive significance to the high-quality industrial development and industrial evolution proposed in China's 14th Five-Year Plan." Morgan Stanley Chief Economist Xing Self-improvement said. First, according to the cumulative rules of origin, RCEP will significantly reduce transaction costs between different countries and different economies. Secondly, regardless of the RCEP or the China-EU Investment Agreement, China is focusing on the general direction of "maintaining strong competitiveness in the manufacturing industry." Through further opening up, the domestic market potential will be released, making foreign companies willing to continue to place the industrial chain in China. In turn, the effect of the continuous agglomeration of the manufacturing industry chain in China is realized. Finally, RCEP will help China speed up the free trade agreement with Japan and South Korea. China, Japan and South Korea are highly complementary in high-end parts, automobile manufacturing, storage equipment and other fields, and have the potential to form a more deeply integrated East Asian industrial chain situation. .

Wang Xiaosong, a professor at the School of Economics of Renmin University of China and a researcher at the National Institute of Development Strategies, said that especially the automotive industry will usher in important opportunities. my country will give zero tariff treatment to about 65% of auto parts, accounting for about 90% of trade volume. The tax rate for these parts is 6% to 10%. After the implementation of RCEP, all tariffs will be implemented.

In the past ten years, the Asian region has become the world's largest regional automotive market, and the Southeast Asian market in particular has maintained a relatively high growth rate. In Wang Xiaosong's view, the implementation of RCEP will bring about a reduction in tariffs on auto parts, greatly integrate the supply chain and industrial chain of automobiles in East Asia, effectively help automobile manufacturers to reduce costs, and further release Chinese automobile enterprises in the industrial chain. The advantages. "At the same time, in the RCEP negotiation process, according to the actual development situation, we retained most of the import tariffs for complete vehicles, which reserved room for the development of domestic complete vehicle manufacturers."

The report emphasizes that RCEP is not only an opportunity for China, but also some challenges. Some industrial transfers may occur in the future, because among the 15 member states, some ASEAN countries have low economic development, but have comparative advantages and some labor-intensive industries. The industry is likely to be transferred to these countries.

Liao Qun, chief economist of China CITIC Bank (International), said that from an economic point of view, my country's industries including textiles and apparel, home appliances, furniture, medicine, and daily-use products may be transferred to ASEAN countries, but most industries will take advantage of the strong position of the industrial chain. With greater development, my country’s nine strategic emerging industries will also have more room for development.

In this regard, the report recommends that all localities should adapt to local conditions, actively respond to the possible industrial transfer effects of RCEP, integrate free trade zone strategies including RCEP with regional and local development strategies, and explore new areas and measures for standards and regulations. . For regions with a better industrial foundation, it is necessary to promote higher value-added upstream industrial chains to remain locally. For regions with labor cost advantages, we can take the initiative to connect with places with transfer needs, undertake the transfer of related labor-intensive industries, and promote local economic development.