Global enterprises see more trade with China under RCEP

MOST global businesses remain optimistic about the opportunities offered by the Chinese market, with over 90 percent of firms from the more than dozen countries that joined the Regional Comprehensive Economic Partnership (RCEP) free trade agreement expecting trade with China to expand.

According to an HSBC survey conducted for the recent 5th China International Import Expo (CIIE) in Shanghai, 82 percent of the companies polled see their business in China growing next year and 93 percent expect more trade with the East Asian country.

The poll involved nearly 3,400 firms from 16 major markets, including nine RCEP members and seven major economies.

Teh-han Chow, chief executive officer (CEO) of New Zealand-based dairy producer Fonterra for greater China, told Beijing-run tabloid Global Times that China was his company’s biggest single overseas market, accounting for about a third of its total business. He said the Chinese market would continue to be important for Fonterra.

“As a rule-based trade pact, the RCEP will enhance the consistency and efficiency of cross-border trade among signatory-countries. As a company involved in the export and import of goods, we are glad to see the trade pact generating a positive effect,” Chow said.

“RCEP markets currently account for about 50 percent of Fonterra’s total business, and as the RCEP exerts its effect, we expect that ratio to be further lifted,” Chow added.

The average intake of dairy products in China is lower than in other developed East Asian economies, according to Chow, thus the potential to tap that market is huge for companies like Fonterra.

Charlie Teo, CEO of Singaporean massage chair maker OSIM, told the Global Times that the economic gravity center was shifting from the West to the East. The RCEP, he said, stands to enhance the level of cooperation among its membercountries and among businesses.

“This deal will allow us to consolidate our position ... in the Chinese market,” he added.

Teo also said OSIM had been preparing to embrace the RCEP, and “as our company chairman has said, if we lose the Chinese market, we lose the world. The RCEP is our once-ina-lifetime opportunity.”

The RCEP added momentum to the development of China’s partnership with Thailand, Saravoot Yoovidhya, CEO of Thailand-based beverage and snack producer TCP Group, told theGlobal Times. The RCEP and the CIIE, he said, will bring more benefits by helping to further promote regional cooperation and supporting the implementation of the Belt and Road Initiative.

TCP looks forward to sharing in new opportunities offered by the Chinese market through greater regional cooperation and China’s continued opening-up initiatives, Yoovidhya said.

“We are more determined than ever to invest more in the Chinese market, further expand and deepen our Chinese business activities, and bring more high-quality products to Chinese consumers,” he added.

Trade between China and other RCEP members stood at 8.32 trillion yuan ($1.15 trillion) in the first eight months of 2022, accounting for nearly a third of China’s total foreign trade.

From January to October, the Association of Southeast Asian Nations remained China’s largest trading partner. Their trade was valued at 5.26 trillion yuan, up 15.8 percent year on year, according to data from the General Administration of Customs.

Commenting on the HSBC survey, China’s Foreign Ministry spokesman Zhao Lijian said China was implementing a more active opening-up strategy to establish a high-standard free trade zone network. The country will keep promoting high-standard opening-up, make it easier for foreign companies to invest and operate in China, and further promote trade and investment liberalization and facilitation.

Against a gloomy global economy, the RCEP has offered a valuable opportunity for businesses, Zhao Gancheng, a research fellow at the Shanghai Institute for International Studies, told the Global Times .

Members of the RCEP are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam; China, Japan, South Korea, Australia and New Zealand.