RCEP: China says world’s largest trade pact gives it ‘powerful leverage’ to cope with 2022 challenges

Regional Comprehensive Economic Partnership comes into effect on Saturday for most of its 15 members, which account for nearly a third of the global population

More than 90 per cent of merchandise trade between RCEP members will eventually be subject to zero tariffs under the new trade bloc

3-MIN READ3-MIN

Tariffs on more than 65 per cent of China’s trade in goods with Asean, Australia and New Zealand are expected to reach zero on Saturday under the RCEP agreement. Photo: AP

Published: 5:30am, 31 Dec 2021

China is doubling down on the critical role that the world’s largest trade pact will play in helping it buffer the impact of the coronavirus while promoting growth in the face of “unprecedented” trade challenges during the coming year.

The Regional Comprehensive Economic Partnership (RCEP), comprising 15 member countries – including China and covering approximately 30 per cent of the world’s population and global gross domestic product – will take effect for most members on Saturday.

Tariffs on more than 65 per cent of China’s trade in goods with Asean, Australia and New Zealand are expected to immediately reach zero under the regional agreement.

“[Its entry into force] will effectively hedge against the negative economic impacts of Covid-19,” Ren Hongbin, vice-minister of commerce, said at a press conference on Thursday.

Beijing also said the deal will serve as “powerful leverage” for keeping trade and foreign investment stable in 2022, as it will expand exports of Chinese products while helping speed up China’s industrial transformation.

Ren added that China was ready to fulfil 701 binding obligations under the trade agreement, with its implementation marking a new milestone in China’s opening-up.

Although it was the 10-member Association of Southeast Asian Nations that initiated the partnership, Beijing was seen playing an increasingly active role. Chinese decision-makers ramped up their focus on the regional trade deal while mired in growing tensions with Washington and its allies, compounded by the shock of the coronavirus.