Yesterday, there was encouraging news that the Regional Comprehensive Economic Partnership Agreement (RCEP), a joint initiative of the ten ASEAN countries, China, Japan, Korea, Australia and New Zealand, was officially signed.
The Agreement had been initiated by ASEAN in response to the development of economic globalization and regional economic integration. In the face of some of the negative effects of economic globalization, it was necessary to strengthen regional economic integration in order to remain relevant and develop in the global economy, and to that end, some countries were pursuing cooperation and development by implementing "zero" tariffs, opening their markets to each other and cooperating closely with each other.
Although the pace of RCEP may not be completely consistent due to territorial issues and differences in the principles of trade liberalization, it has become the consensus of all parties to conclude a free trade agreement as soon as possible to increase economic vitality. China’s Premier Li Keqiang said, "RCEP is a regional cooperation agreement on higher level FTAs based on WTO rules, and against the backdrop of rising trade protectionism and unilateralism, the conclusion of this agreement will help regional countries send positive signals to the world”. After nearly a decade of unremitting efforts by 15 countries, RCEP was finally established.
RCEP will be the world's largest FTA, covering over 3 billion people and over 30% of the world's GDP, and over 90% of the goods in the FTA are expected to achieve zero tariff, which will greatly enhance economic exchanges within the FTA and promote complementary advantages within the region. The Pacific Rim region, especially East and Southeast Asia, is currently the region with the best control of epidemics and the earliest economic recovery. In the future, these regions will continue to be the engines of global economic development.
The development of the world cannot be separated from China, and China cannot be separated from the world. In 2020, when globalization and regionalization are on the rise, the successful signing of RCEP is of great significance for China to consolidate its leading position in the regional economy and optimize the allocation of raw materials, technology, production, manpower and markets. Affordable commodities and raw materials will also be an important part of the "double cycle". Also, the whole RCEP is a good practice of China’s Belt & Road Strategy.
AAG Insight-China's Pacific Rim - World's Largest Free Trade Zone Established