Mr. Lee Hin Chan, General Manager of Kwong Wah Yit Poh,
Mr. Alan Hoo, President of One Belt One Road South East Asian NGOs Alliance (OBORSEANA),
Mr. Hong Yeam Wah, President of Penang Chinese Chamber of Commerce (PCCC),
Mr. Tan Heng Kheng, Vice Chairman of Federation of Malaysian Manufacturers (FMM) Penang Branch,
Mr. Ooi Cheng Chye, Chairman of Penang Importers & Exporters Association,
Mr. Teh Eng Hin, President of Malaysia-China Chamber of Commerce (MCCC) Penang branch,
Dear guests, entrepreneurs, and friends,
Good afternoon! I am very glad to be invited to attend the Sharing Session themed on “RCEP Brings Enormous Trade Opportunities for China and Malaysia”, which is jointly organized by Kwong Wah Yit Poh and One Belt One Road South East Asian NGOs Alliance (OBORSEANA). On behalf of the Consulate General of China in Penang, I would like to extend congratulations to the organizers for hosting this event!
On March 18, the Regional Comprehensive Economic Partnership (RCEP) came into force for Malaysia. This free trade agreement is initiated and led by ASEAN and signed between 15 countries.The total population, economic volume, and total trade volume of the 15 member countries account for about 30 percent of the global total. RCEP covers a wide range of areas, including tariff reduction, trade facilitation, opening up of services and investment, personnel exchanges and business exchanges, e-commerce, intellectual property protection, etc. It is the world’s largest trade deal so far, and it is also a comprehensive, modern, high-quality, and reciprocal free trade agreement. The entry into force of the RCEP agreement marks a major step forward for economic integration in the East Asia and Asia-Pacific region. It will drive rapid growth of intra-regional trade and investment, improve the business environment in the region, strengthen the deep integration and complementaritiesof regional industrial and supply chains, enhance the resilience and vitality of the regional economy, and inject confidence and impetus into regional and global economic growth.
The RCEP mandates that member countries openmarkets to each other. So, the agreement willcreate an integrated super-large market with around one third of the global economy, and generate vigorous business opportunities. According to the forecast of relevant research institutions, by 2035, RCEP will drive the export and import cumulative increase of the region to 857.1 billion US dollars and 983.7 billion US dollars respectively. RCEP will achieve a higher level of trade and investment openness and more favourable regulatory environment, which will benefit all member countries. RCEP encourages the development of e-commerce andcontains special trade facilitation measures to facilitate customs clearance for fresh agricultural products such as seafood, fruits and vegetableswithin six hours. It will be possible forsmall and medium enterprises (SMEs) to explore the markets of the members countries in the region and even all around the world on cross-bordere-commerce platforms. The implementation of the cumulation provisions of the rules of origin under RCEP is conducive to lowering the threshold for enjoying tariff preferences. As a result, SMEs will be able to utilise the resources of upstream participants in the supply chain of the region and benefit from the RCEP rules.
The RCEP creates a trading bloc in the world’s most dynamic economic area. China’s participation makes “high-quality”as a prominent feature of RCEP. In 2021, China’s GDP exceeded 110 trillion yuan RMB (about 17.73 trillion US dollars), registering an increase of 8.1 percent. China’s international trade is strongly propelled bydomestic production and consumption demand. The exports and imports of Chinaexceeded 6 trillion US dollars for the first time in 2021, and the country’s imports and exports with its major trading partnersall enjoyed steady growth. For the first two months of 2022, China’s import and export with RCEP partners reached 1.85 trillion yuan RMB, increasing 9.5 percent year-on-year, accounting for about 30 percent of the total. Among the RCEP members, ASEAN, Japan, and South Korea are among the top five trading partners of China.
China’s participation in the RCEP marks a new milestone for its opening-up. By the implementationof RCEP, China enhances its connectivity between international and domestic markets and resources, deepens its integration into the global economic development, pushes forward industrial transformation and upgrading, promoteshigh-quality economic development, and accelerates the establishment of a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. Since the entry into force of RCEP, many companies have enjoyed the preferential tariff rates under the agreement and the policy dividend by applying for the Certificate of Origin and the independent declaration of origin. Chinese local governments actively align with RCEP based on local advantages and features, and study and introduce policies, measures and action plans to implement the agreement. In order to helpChinese enterprises make more effective use of RCEP,relevant Chinese authorities will continue to provide guidance and services, strengthen training for Micro-, Small and Medium-sized Enterprises (MSMEs), and continue toprovide timely and high-quality information and consulting services for businesses.
All ASEAN countries are members of the RCEP. According to the statistics of the General Administrations of Customs of China, in the first two months of 2022, China-ASEAN trade volume reached 136.59 billion US dollars, a year-on-year increase of 13.1 percent. It is worth attention that the bilateral trade volumes between China and Malaysia, Indonesia, Cambodia, and Brunei enjoyed an average increase of more than 20 percent year-on-year. At the Special Summit to Commemorate the 30th Anniversary of China-ASEAN Dialogue Relations in November 2021, Chinese President Xi Jinping pointed out that we need to fully harness the role of the RCEP, begin work toward a new round of upgrade of the China-ASEAN Free Trade Area at an early date, and enhance the level of trade and investment liberalization and facilitation. We need to expand cooperation in new areas like digital and green economy and build joint demonstration zones for economic innovative development. China has a vast domestic market that will always be open to ASEAN countries. China is ready to import more quality products from ASEAN countries, including buying up to 150 billion US dollars’ worth of agricultural products from ASEAN in the next five years.
The RCEP and the construction of the Belt and Road Initiative (BRI) can complement and reinforce each other. Many RCEP member countries are important node countries along the 21stCentury Maritime Silk Road. During the progress in pursuing the BRI cooperation, China has deepened the economic and trade relations with other RCEP member countries. With the help of the cooperation platform established by the RCEP and guaranteed by the mechanism in promotion of trade growth within the region, China and ASEAN will be able to accelerate the high-quality construction of the BRI. Through the institutional arrangement of the agreement, the RCEP provides member countries with conveniences in cross-border flow of goods, services, and capitals, which can help to improve the efficiency of trade and investment activities of all parties, and effectively reduce the cost of enterprises and investors in the region. The RCEP will also provide strong support for relevant enterprises in their cooperation with China, trade market expansion, and their own development. In the meantime, the trade connectivity between the countries along the Belt and Road can be largely promoted to achieve mutual benefit, win-win cooperation and common development.
The bilateral trade and investment between China and Malaysia continue to maintain strong growth momentum. The friendly relations and pragmatic cooperation between the two countries have set an example for regional cooperation. According to statistics, in 2021, the bilateral trade volume between China and Malaysia reached 176.8 billion US dollars, a year-on-year increase of 34.5 percent. As of the end of 2021, China’s cumulative direct investment in Malaysia exceeded 10 billion US dollars, and Malaysia’s cumulative direct investment in China reached nearly 8 billion US dollars. After the RCEP came into force, more than 90 percent of merchandize trade among members that have approved the agreement will eventually be subject to zero tariffs. Among them, 67.9 percent of Malaysia goods enjoy immediate zero tariff when exported to China and 69.9 percent of Chinese exports to Malaysia, which is the highest in history. The economic and trade cooperation between China and Malaysia will release greater potential and will provide new room for growth in the export of Malaysian goods. Delivering on opening-up commitments and fulfilling rules in various fields in China-Malaysia trade and economic ties will further enhance bilateral trade and investment cooperation, bring more dividends to firms and consumers on both sides.
It is expected that enterprises from China and Malaysia will ride the waves of the RCEP, enhance the capacity to participate in cooperation and competition on the broader international stage, achieve greater development, to elevate China-Malaysia relations to a higher level, and promote cooperation in various fields to grow in depth and substance. The 131stChina Import and Export Fair (Canton Fair) will be held online from April 15 to 24. Malaysian enterprises are welcome to actively participate in the fair online, explore and share business opportunities on this vital platform that is built for China’s opening-up on all fronts, and connecting China’s domestic and international circulation.
Lastly, I wish this event a complete success! And I wish everyone good health, success in your work, and all the best!
Thank you!