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RCEP trade spurs growth in China and Asia-Pacific economies via inland railway links

BusinessRCEP trade spurs growth in China and Asia-Pacific economies via inland railway links

According to government officials and market observers, China’s inland cities are expected to increase their use of railroad links to seaports in order to boost exports to other signatory economies of the Regional Comprehensive Economic Partnership agreement. Inland provinces such as Hunan, Jiangxi, Guizhou, and Hubei have been exploring various options to improve their exports and make them more sustainable. Cities in such provinces have been keen to establish transportation linkages to the ports in Shanghai and coastal provinces. They have relied on existing railroad networks to transship their products to other RCEP markets.

Recently, inland cities, including Nanchang in Jiangxi province and Guiyang in Guizhou province, have operated a number of freight train services to export goods to countries such as Indonesia, Malaysia, Vietnam, Laos, Thailand, Singapore, Japan, and the Republic of Korea. Their railway containers are reloaded at ports like Wenzhou in Zhejiang province and Qinzhou in the Guangxi Zhuang autonomous region for the ocean voyage.

As the RCEP has spurred trade among signatory countries since January 2022, Huaihua in Hunan province has operated Huaihua-Laos and Huaihua-Vietnam cargo train services as well as the weekly Huaihua-Beibu Gulf Port rail-sea combined transport operations. They have effectively boosted the exports of China’s central provinces to other RCEP countries, said Li Chunqiu, the city’s mayor.

China’s trade with ASEAN, the country’s largest trade partner, surged 9.6 percent year-on-year to 951.93 billion yuan in the first two months of this year, accounting for 15.4 percent of the country’s total, while its trade with other RCEP members rose 3.1 percent on a yearly basis, data from the General Administration of Customs showed.

The robust economic cooperation among RCEP economies would inject a much-needed impetus into the global economy that has been facing multiple pressures ranging from waning global demand to geoeconomic shocks, said Li Muyuan, executive vice-president of the Beijing-based China Container Industry Association.

As global economic growth slows down and demand for goods softens in many countries, the RCEP is poised to be a key growth driver for China and many economies in the Asia-Pacific region this year, as many of them seek to enjoy more preferential tariff dividends and partly reduce their reliance on external demand, said Cao Erbao, a professor of foreign trade at Changsha-based Hunan University.

Even though the RCEP is not a panacea for economic challenges, it represents a significant step toward greater regional integration and cooperation, said Jiang Ruiping, a professor of economics at China Foreign Affairs University in Beijing. China’s opening up this year in alignment with high-standard international trade rules will further expand the economic cooperation among RCEP economies, which is expected to inject new energy into the global economy.

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