RCEP accord seen giving hefty boost to Ordos businesses

Updated: 2022-01-11 (chinadaily.com.cn) Print

Businesses in the city of Ordos in North China's Inner Mongolia autonomous region are expected to be galvanized by the powerful Regional Comprehensive Economic Partnership, or RCEP – the world's largest free trade agreement – that took effect on Jan 1.

Signed by member countries of the Association of Southeast Asian Nations or ASEAN – with signatories including China, Japan, the Republic of Korea, Australia and New Zealand – the RCEP bloc reportedly accounts for one-third of the world's population, global GDP and global trade.

It is believed that RCEP will greatly enhance East Asia's regional economic integration, as well as significantly improve the overall business environment in the region.

Some 90 percent of foreign trade between members that have ratified the deal will be tariff-free, potentially a huge boost to regional trade and investment. Furthermore, an integrated hyper-sized market will be born out of the agreement, injecting strong impetus into regional and global economic growth.

Zhou Xiaojian, head of the comprehensive business section of Ordos customs, said that the entry into force of RCEP marked the first time that China and Japan had reached a tariff reduction arrangement.

China will exempt about 86 percent of Japanese industrial products from import tariffs in stages, while Japan will implement tariff reductions on agricultural products, food, clothing and chemicals products from China.

After the parallel implementation of RCEP and other free trade agreements, the same commodities will have different tax reduction levels and rules of origin under different agreements and businesses can choose the best one according to their own circumstances, Zhou added.

From January to November 2021, the import and export volume of Ordos to RCEP countries reached 2.06 billion yuan ($320 million), accounting for 27.8 percent of the city's total foreign trade.