China's stable growth offers benefits to RCEP members

As the largest economy in the Regional Comprehensive Economic Partnership, China, whose economic growth in 2020 has been relatively stable in spite of the global havoc caused by the COVID-19 pandemic, is expected to play a key role in helping other member economies in the future development while stepping up its own structural reform, experts and industry insiders said.

The fact that China is improving its business climate bodes well for the RCEP and will make the coalition dynamic and sustainable, they said.

Speaking at the RCEP Media &Think Tank Forum via video link on Sunday, George Yong-Boon Yeo, Singapore's former minister for trade and industry and foreign affairs, said participating economies of the RCEP shall help one another with pragmatic cooperation in many areas such as infrastructure.

It will be extremely challenging for developing countries to catch up without good infrastructure, he said. And it is important for countries to enhance regional cooperation, so that overall planning at each country's national planning will better coordinate with other participating countries, so that the benefit can be more widely shared, he said.

Ma Hong, an associate professor of economics at Tsinghua University, said the RCEP will help forge a unified market within the Asia-Pacific region and accelerate regional integration.

"The RCEP agreement has significantly reduced the barriers for all participating countries regarding trade in goods, trade in services and foreign investment. It has also established the rule of origin within the region. This will accelerate the flow of capital, talent and technology among participating countries, consolidate industrial cooperation and boost their own economic upgrade," he said.

China was the only major economy that realized a positive economic growth in 2020. The country's economic growth expanded by 18.3 percent for the first quarter this year, highlighting the strength of its recovery from the COVID-19 pandemic.

Experts believe that in light of the RCEP, it is important for China to keep its growth on a steady and healthy track, so that the benefit of its growth can be shared by participating countries.

Ma, for one, said the RCEP agreement is the first regional trade pact that China has signed with a negative investment list. The implementation process of the RCEP will be an opportunity per se for China in improving regulatory approaches toward foreign investment, better safeguarding intellectual property rights and enabling business environment.

"The RCEP agreement covers regulatory items in some key areas including IPR, e-commerce, market competition, small- and medium-sized enterprises and technological cooperation. These have added new requirements for participating countries, including China, in building an enabling business environment," Ma said.

He noted in particular that there are more than 200 items of soft duties in areas of facilitation of Custom clearance, rules in IPR protection and the reform of e-commerce.

Ma said: "These duties also fit China's own need for deepening reform and further opening-up. It will be conducive to China to improve its own business climate and attract more goods and production factors of high quality into the China market, thus promoting our industrial reform to a higher level and toward digital transformation.

"And this, in turn, will help our economy to move on a healthy and steady track and share growth benefits with other participating countries to make the pact move toward a more sustainable manner."

Ma also said the RCEP will surely take opening-up to the next higher level and the level of market competition will increase for some time.

"This will urge domestic firms to raise production quality and market competence, and actively participate in international cooperation," he said.

After the agreement was signed last November, China's State Council, the country's Cabinet, held several executive meetings for the purpose of faster implementation.

It was made clear in these meetings that as commitment regarding trade in services is significantly higher than existing two-way trade deals among participating countries, new commitments for opening-up must be made in the context of research and development, services in manufacturing, eldercare and consultation services.

And, such new commitments "must be implemented fully", a State Council statement issued after an executive meeting, said.

Bai Ming, deputy director of international market research at the Beijing-based Chinese Academy of International Trade and Economic Cooperation, said that full preparedness, particularly at the governmental level, will be key to reaping desired dividends from the free trade agreement sooner than later.

"As the new agreement involves a great many sectors, preparation will be a complicated process both for governments and businesses," he said, "Preparations should be made early and in full for those at government levels to better help businesses adapt to new regulations and further leverage benefits from the free trade agreement."