How to Benefit from RCEP through China Digital Marketing

Do you know that RCEP is now in effect? What does RCEP mean to your business? How to benefit from the huge Chinese market through digital marketing?

You can wait, but your competitors are taking action!

What’s RCEP?
The value of RCEP
What does RCEP mean for businesses?
What benefits of RCEP from China
How digital marketing in the largest China market of RCEP

Different Languange:

1, What’s RCEP?

According to Wiki Pedia, The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement among the Asia-Pacific nations of Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. The 15 member countries account for about 30% of the world’s population (2.2 billion people) and 30% of global GDP ($26.2 trillion), making it the largest trade bloc in history. It is the first free trade agreement among the East Asian countries of China, Japan, and South Korea, three of the four largest economies in Asia.

The RCEP includes a mix of high-, middle-, and low-income countries. It is expected to eliminate about 90% of the tariffs on imports between its signatories within 20 years of coming into force, and establish common rules for e-commerce, trade, and intellectual property. Several analysts predicted that it would offer significant economic gains for signatory nations, boost post-pandemic economic recovery, as well as “pull the economic centre of gravity back towards Asia, with China poised to take the lead in writing trade rules for the region,” leaving the U.S. behind in economic and political affairs. Reactions from others were neutral or negative, with some analysts saying that the economic gains from the trade deal would be modest. The RCEP has been criticized for ignoring labor, human rights, and environmental sustainability issues.

2, The value of RCEP

The combined GDP of potential RCEP members surpassed the combined GDP of Trans-Pacific Partnership (TPP) members in 2007. It was suggested that continued economic growth, particularly in China and Indonesia, could see total GDP in the original RCEP membership grow to over US$100 trillion by 2050, roughly double the project size of TPP economies.

According to Peter Petri and Michael Plummer of the Brookings Institution, the RCEP could add $209 billion annually to world incomes, and $500 billion to world trade by 2030, and that “new agreements will make the economies of North and Southeast Asia more efficient, linking their strengths in technology, manufacturing, agriculture, and natural resources.

3, What the RCEP Means for Business

Given these commitments regarding trade in goods, RCEP is expected to facilitate the transformation of the regional value chain. Member countries of RCEP, especially Japan, South Korea, China and the ASEAN countries, have a high level of intra‑industry trade (mainly in the electronics sector), thanks to the well‑established supply chains in the region. With RCEP’s rules of origin reflecting contemporary production processes and trade logistics arrangements, the movement of goods in the region will become easier, facilitating the extension of the regional supply chain out of China. Electronics, garments, textiles, toys, machinery and plastics are key sectors in which manufacturers are looking to diversify their operations outside China. In addition, Japan’s new commitments to China and South Korea are likely to benefit the automotive sector, given that China’s imports of Japanese auto parts account for 27% of the bilateral trade between the two. Under RCEP, 90% of Japanese auto parts exports to China will be tariff‑free.

Trade in Services and Other Commitments

RCEP also delivers improved market access, beyond that provided by existing FTAs, for services exporters and investors in some RCEP markets. For example, New Zealand services exporters and investors will for the first time benefit from market access commitments from China, and also from ASEAN countries that are not party to the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP), such as Indonesia and the Philippines.

When it comes to trade in services, Cambodia, China, Laos, Myanmar, New Zealand, the Philippines, Thailand and Vietnam have offered a positive listing of schedules while other member countries have made services offers on a negative list basis where the market will be fully open for RCEP participation, apart from restrictions specified in the list. Overall, at least 65% of services sectors will be fully open to foreign investors, with commitments to raise the ceiling for foreign shareholding limits in various industries, such as professional services, telecommunications, financial services, computer services, and distribution and logistics services. However, the actual impact will depend on how the measures are adopted and implemented at the business level as there is often a big gap between policy and realities when it comes to services trade liberalisation under FTAs.

RCEP also includes chapters on intellectual property, electronic commerce, competition, small and medium enterprises (SMEs), economic and technical cooperation and government procurement.

4，What benefits of RCEP from China

China has been one of the world’s fastest-growing economies, with real annual GDP growth averaging 9% in the past five years. The World Bank described this performance as “the fastest sustained expansion by a major economy in history.” China is not only an important manufacturing center for the global economy, but now is also an indispensable consumer market.

The RCEP is China’s first multilateral trade agreement and the first trade cooperation with the other two regional economic powers: Japan and South Korea. China, the group’s largest member, strives to raise its profile in Asia’s mechanisms for integration.

More than one-third of its foreign trade will be tariff-free, which will lead to further opening-up in related services and investment, as well as trade facilitation and better business environment. The deal will boost China’s efforts to stabilize foreign trade and investment, promote industrial upgrading, and help the country set up economic and trade rules that are compatible with high-quality international standards.