RCEP to benefit Chinese exports
China and fourteen other Asia-Pacific economies signed an agreement to set up the Regional Comprehensive Economic Partnership (RCEP) in mid-November.
In addition to China, the other 14 countries involved are Vietnam, Japan, South Korea, the Philippines, New Zealand, Singapore, Australia, Malaysia, Indonesia, Thailand, Cambodia, Brunei, Laos and Myanmar.
As the largest free-trade agreement anywhere in the world, the RCEP should come into force in the next two years.
The RCEP promises a more closely integrated supply chain in the Asia-Pacific region. In 2015, RCEP member countries exported $4.5 billion of textile and apparel products, accounting for more than half of the world’s total.
The largest RCEP free trade zone, between China and Japan, will allow for more than 90% of products to be mutually exempt from tariffs. China is to have a 13% value-added tax, while Japan will have a 10% consumption tax.
The agreement will therefore particularly favour high-tariff products, especially clothing, shoes and accessories exported to Japan.
Chinese spinners are also expected to benefit from the reduced tariffs on textile products and textile intermediates, particularly those exported to Southeast Asian countries.
Image: The Japan Times.
