Experts: RCEP rules to boost Yunnan-ASEAN industrial chain

“The ROOs (rules of origin) accumulation and their related clauses in the RCEP agreement will greatly boost the construction of industrial value chain between Yunnan province and the ASEAN countries,” said two specialists Zhu Li and Zhou Xining during a recent interview with Yunnan Daily.

Staffers work in the Kunming area of the China (Yunnan) pilot free trade zone. (Yunnan Gateway/Li Wenjun)  

Zhu is dean of Economic Research Institute of Yunnan University of Finance and Economics, while Zhou is director of Business Development Research Center of Yunnan International Trade Society. They were invited to share ideas on the occasion of the 2021 South and Southeast Asia Commodity Expo and Investment Fair (SSACEIF), which will be held online from August 25 to 29.

The 2021 SSACEIF will highlight cross-border cooperation with the ASEAN nations and countries in the Indian Ocean region. Embracing the RCEP rules and standards, the fair aims to boost digital economy, processing trade, cross-border e-commerce and agriculture.

“To put it simply, the ROOs (rules of origin) accumulation means that before country A invests in country B, the products’ values are to be accumulated as long as they have had value-added processing steps in countries such as C, D and E, which are other parties to the RCEP agreement,” said the Yunnan experts. During the international conferences earlier this year, the RECP rules have been explained. 

In traditional trade agreements, for example, country A could only enjoy a 20% added value, but under the new RCEP rules, its added value will be increased by 40%. While meeting the needs of country B in inviting in investment, country A may also enjoy the zero tariff in the deal.

“Facilitating export and cross-border investment and speeding up the flow of production factors within Asia, the ROOs (rules of origin) accumulation will be conducive for Yunnan enterprises to optimize the supply chain, cut the cost of purchasing raw materials, and bolster capacity cooperation between Yunnan enterprises and their peers in the neighboring countries,” noted the experts.

The improvement of business environment and investment protection clauses will help Yunnan enterprises to invest in Southeast Asian countries, reduce the risk of overseas investment, and enhance their international operation and competitiveness, they pointed out.

Zhu Li and Zhou Xining added upon taking into effect the RCEP agreement will greatly facilitate trade among Southeast Asian countries, which will give a strong pull to trade and economic activities at Yunnan’s land ports and in its border areas.

The negative list of RCEP investments will push forward Yunnan’s high-quality development by utilizing foreign capital, and other RCEP rules will spur industrial development in the China (Yunnan) pilot free trade zone, said the experts.

Reporting Han Chengyuan (Yunnan Daily); Trans-editing by Wang Shixue