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China’s RCEP membership boosts trade value, CPTPP accession to further enhance integration

BusinessChina's RCEP membership boosts trade value, CPTPP accession to further enhance integration

China’s potential accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could bring tangible economic benefits to participating countries, according to experts and business leaders. Wang Shouwen, Vice Minister of Commerce, recently announced that China has both the willingness and capability to join the CPTPP and called on member countries to support its accession. If China does join, this would result in a tripling of the consumer base and a 1.5-fold expansion of the total GDP of pact members.

Wang emphasized that China’s accession to the CPTPP would be in the best interests of the country, all CPTPP members, and the economic recovery of the Asia-Pacific region and the world as a whole. As a member of the Regional Comprehensive Economic Partnership agreement, China’s potential accession to the CPTPP could further enhance economic integration and cooperation among member countries, and contribute to the recovery of the global economy, said Wang Huiyao, President of the Beijing-based think tank Center for China and Globalization.

The rising trade value between China and other RCEP countries in the first quarter is a solid example supporting this view, with bilateral trade growing 7.3 percent year-on-year to 3.08 trillion yuan ($446.33 billion), accounting for 31.2 percent of China’s total foreign trade, said the General Administration of Customs. Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said that at present, with the emergence of new forms of digital economy and the expansion of the modern services sector, China needs to proactively compare international rules, regulations, management and standards in many emerging fields, and establish a regulatory mechanism to showcase its willingness for institutional opening-up to the world.

The CPTPP is a free trade agreement involving 11 countries and came into effect in December 2018. Its member nations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Compared with other FTAs signed by China, the CPTPP covers a wider range of areas, including regulations that address labor and environmental concerns.

“If the CPTPP is implemented in China, it will not only effectively promote the country’s market-oriented reforms, but also accelerate reform of its State-owned enterprises and widen market access in certain industries for foreign investors,” said Tu Xinquan, Dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing. Johnny Chou, Chairman and CEO of Best Inc, a Hangzhou, Zhejiang province-based integrated supply chain and logistics solutions provider, said that China’s CPTPP entry would support the growth of “interregional trade, cross-border e-commerce and related industries,” and create a more stable and open investment environment for global companies investing in the Asia-Pacific region.

To further push for wider openness, the National Development and Reform Commission announced last week that China will consider appropriately shortening the list that outlines the sectors off-limits to foreign investors and push forward high-level opening-up to attract foreign investment. In addition to studying the terms, costs and benefits of joining the CPTPP, China has already carried out pilot projects and experiments in some pilot FTAs and the Hainan free trade port in accordance with CPTPP rules, standards and management obligations, said the Ministry of Commerce.

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