In north China’s Tianjin Municipality, a hotel restaurant presents a lavish spread of delicacies, boasting beef from Australia, lobsters from Vietnam, mussels from New Zealand, soft-shell crabs from Myanmar, and rice from Thailand. This culinary diversity has been made possible by the Regional Comprehensive Economic Partnership (RCEP), a trade agreement uniting 15 member countries, including the 10 ASEAN nations, China, Japan, the Republic of Korea (ROK), Australia, and New Zealand. Since its signing in November 2020 and official commencement on January 1, 2022, the RCEP has been gradually eliminating tariffs on over 90 percent of goods traded among its members.
Recently, on June 2, the RCEP achieved a significant milestone when it came into full effect in the Philippines, marking the complete activation of the world’s largest free trade pact for all 15 member nations.
The impact of RCEP’s implementation is being felt across various sectors in China. Anthony Gill, General Manager of the Four Seasons Hotel Tianjin, expressed his gratitude for the RCEP agreement, highlighting the increased convenience of sourcing ingredients from member countries, leading to a record high number of supplier options. The hotel industry has also experienced a boost in accommodation business, with June witnessing a remarkable 150 percent year-on-year surge in room bookings, primarily driven by the easing of travel policies and the recovery of the tourism sector. Business travelers from RCEP nations, including Japan, the ROK, and Singapore, have become frequent patrons, further supporting the hotel’s growth.
Beyond the hospitality sector, foreign companies operating in China are also reaping the benefits of RCEP’s comprehensive implementation. Shin Eun Shik, the president of ITM (Tianjin) Mechanic Equipment Co., Ltd., a company engaged in water treatment equipment production and sales, reported that their sales revenue is expected to exceed 50 million yuan this year, more than doubling the previous year’s figures. The tariff cuts and eliminations have facilitated smoother exports to RCEP member countries like Australia, presenting mutual benefits for the company and its customers.
Similarly, SMC (China) Co., Ltd., a subsidiary of Japan’s SMC Corporation, specializing in pneumatic components, has identified new opportunities post RCEP. With factories in Beijing, Guangzhou, and Tianjin since 1994, the company now finds its products more competitive in the RCEP market, allowing them to expand services for the industrial automation industry and pass on preferential benefits to their supporting suppliers in China.
The impact of RCEP on China’s overall trade landscape is evident in the first half of the year, with imports and exports between China and the 14 other RCEP members reaching 6.1 trillion yuan, contributing more than 20 percent to China’s foreign trade growth, as reported by the General Administration of Customs.
Looking ahead, Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, predicts that more foreign companies will establish their presence in China, leveraging the comprehensive implementation of RCEP. By extending their industrial and supply chains to the three major regional economic cooperation circles—China-ASEAN, China-Japan-ROK, and China-Australia-New Zealand—these companies stand to gain vital trade and investment opportunities created by regional development.
As the RCEP continues to shape trade dynamics in the region, foreign companies are eyeing China as a strategic hub to capitalize on the vast potential unlocked by this historic free trade agreement.