The fully implemented Regional Comprehensive Economic Partnership pact will significantly enhance economic integration in the Asia-Pacific region and sustain the long-term and stable growth of the global economy, the Ministry of Commerce said on Friday.
The ministry's comments came as the Philippines became the final member to activate the RCEP agreement on Friday, making the mega free trade pact effective for all signatory countries. Under the agreement, more than 90 percent of trade in goods among approved member economies will gradually be tariff-free.
The full-force implementation of the RCEP demonstrates the commitment and actions of all 15 participating countries toward supporting a multilateral trading system that is open, free, fair, inclusive and rules-based, said the ministry, stressing that it will notably elevate the level of trade and investment liberalization and facilitation in East Asia.
The RCEP came into force on Jan 1, 2022. It is a mega free trade agreement involving Australia, China, Japan, South Korea, New Zealand and the 10 members of the Association of Southeast Asian Nations. The 15 nations are home to 2.27 billion people with a combined GDP of $26 trillion and total exports of $5.2 trillion, accounting for about 30 percent of global trade in goods.
In another statement released on Friday, the ministry's head of international trade and economic affairs said that the fully implemented RCEP pact will boost China's high-level opening-up to the world.
The official emphasized the importance of ensuring the high-quality implementation of the RCEP, as it will foster the integration of regional industrial and supply chains, unlocking new opportunities for international economic and trade cooperation for localities, industries and companies, as well as facilitate the advancement of higher-level institutional opening-up from an elevated starting point.
Bolstered by favorable tariff policies and their complementary trade structures, China's foreign trade with the other 14 RCEP members grew by 7.5 percent year-on-year to 12.95 trillion yuan ($1.83 trillion) in 2022, according to data from the General Administration of Customs.
The momentum has also been sustained this year, with China's imports and exports with these countries surging 7.3 percent year-on-year to 4.1 trillion yuan in the first four months of 2023.
Experts said that the RCEP is fundamentally an inclusive mega free trade agreement designed to promote shared prosperity and the equitable distribution of economic development across the Asia-Pacific region.
As tariffs are gradually reduced, the pact will provide consumers with a broader array of market choices, satisfying cross-border consumption demand and contributing to overall consumption upgrading, said Zhang Xiaotao, dean of the School of International Trade and Economics at the Beijing-based Central University of Finance and Economics.
Supporting this viewpoint, Wang Xiaohong, deputy director of the Department of Information at the China Center for International Economic Exchanges, said that the RCEP framework has enriched the comparative advantages of each country and made them more attractive to other member countries for trade and investment under the same conditions.
Mike Walsh, executive vice-president of Dekra Group, a German testing, inspection and certification group with more than 48,000 employees globally, said that the RCEP will create more favorable conditions to spur foreign trade and investment activities in both China and throughout the Asia-Pacific region.
"We plan to use the technological capabilities accumulated in China to develop our operations in Southeast Asia in the coming years," said Walsh, adding that the RCEP pact supports the company's overall development plan for the Asia-Pacific region in terms of market and business management.