China-led RCEP to Officially Take Effect Tomorrow... Whether It Will Operate Smoothly Remains to Be Seen

China Expresses Optimism for Active Trade in the Central Pacific Economic Zone
China Holds Export Control Card in One Hand, RCEP in the Other

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The Regional Comprehensive Economic Partnership (RCEP), led by China, will officially come into effect on January 1, 2022. RCEP is the world's largest economic bloc, with a participating population of 2.3 billion people. The combined Gross Domestic Product (GDP) of the member countries amounts to 26 trillion dollars, accounting for 30% of the global GDP.

Photo by Global Times Capture

State-run Xinhua News Agency reported on the 31st, citing the Chinese Ministry of Commerce, that the RCEP agreement will officially come into effect on January 1 next year in 10 countries: China, Japan, Australia, New Zealand, Singapore, Thailand, Vietnam, Brunei, Cambodia, and Laos. South Korea will join from February 1 next year, while Indonesia, Malaysia, the Philippines, and Myanmar are awaiting ratification by their respective national parliaments.

The Chinese Ministry of Commerce explained that as of the end of November, the trade volume between China and RCEP member countries reached 10.96 trillion yuan (approximately 3,660 trillion Korean won), accounting for 31% of China's total trade volume. It added that with the official enforcement of RCEP, tariffs will be gradually eliminated, leading to more active trade among RCEP member countries.

The Ministry further explained that both South Korea and Japan, major trading partners of China, are participating in RCEP, and that 86% of trade goods between China and Japan will gradually be subject to tariff-free treatment.

China expects its GDP to increase by 1 to 2 percentage points this year due to the enforcement of RCEP, showing considerable expectations for the agreement. It also views RCEP as a demonstration of the Chinese government's willingness to open its market and anticipates it will play a positive role in the Pacific economic zone.

In this regard, the Nihon Keizai Shimbun (Japan Economic Newspaper) analyzed that with the enforcement of RCEP, Japan's intra-regional exports will increase by 5.5% compared to 2019, and China and South Korea are also expected to see about a 2% increase in exports.

Wei Wenlin, Director of the International Department at the Chinese Ministry of Commerce, stated, "RCEP will facilitate active exchanges not only in goods trade but also in services, foreign investment, and various other fields," and predicted that this will lead to the integration of industrial and supply chains among participating countries.

Zhao Gancheng, Director of the Shanghai Institute for International Studies, said, "RCEP will further tighten trade relations between China and ASEAN countries," and added that the strengthened economic ties among RCEP member countries will serve as a catalyst to further promote the Belt and Road Initiative (land and maritime Silk Road) projects in the future.

Meanwhile, some in Beijing express that although China has high expectations for RCEP, it remains to be seen whether RCEP will function normally as intended by China. The US-China conflict is a variable. Among the 15 RCEP member countries, Australia, New Zealand, and Japan are included. Australia has already taken a different political and diplomatic path from China, and New Zealand and Japan also align with the United States.

This content was produced with the assistance of AI translation services.