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How Much Will China'S Textile And Garment Enterprises Benefit From RCEP Signing

2020/11/30 10:42:00 1

RCEPRegional Comprehensive Economic Partnership AgreementTextiles And ClothingExport

We should cultivate new opportunities in the crisis and open a new situation in the changing situation. Recently, export textile enterprises have been making continuous positive voices, which is rooted in the regional comprehensive economic partnership agreement (RCEP) signed by China on November 15. A total of 15 member states signed the RCEP, including 10 ASEAN countries and China, Japan, South Korea, Australia and New Zealand. RCEP is the largest free trade area in the world, involving about one third of the world's economy. The final number of zero tariff products in goods trade will exceed 90%.

Zero tariff in Free Trade Zone benefits fair competition

For textile and garment export enterprises, the biggest benefit after RCEP signing is the breakthrough in tariff and non-tariff measures. RCEP members promise to realize zero tariff on more than 90% of goods trade in the region through immediate tax reduction and gradual tax reduction within 10 years, so that RCEP free trade zone is expected to fulfill the promise of all goods trade liberalization in a short period of time. With the exception of Japan, other RCEP members have signed free trade agreements with China, with limited marginal improvement. For example, China has established a free trade area with 10 ASEAN countries, and the zero tariff of China ASEAN Free Trade Area has covered more than 90% of the tax items of both sides.

One of the biggest breakthroughs of this RCEP is the first time that China and Japan have a zero tariff agreement arrangement in the free trade area, which has achieved a historic breakthrough. China's trade with its free trade partners will account for 35% of the total trade from the current 27%, which is also considered to be the largest incremental significance of RCEP signing.

According to customs statistics, in the first 10 months of this year, Zhejiang Shaoxing exported 1.44 billion yuan of textile and clothing to Japan, an increase of 19.5% over the same period last year. However, most of the textile and clothing products were faced with import tariffs of 8% - 11% imposed by Japan. Under RCEP, Japan promised to gradually reduce the import tariff until the import tariff was reduced to zero, which will undoubtedly enhance the willingness of local enterprises to export textile and clothing to Japan. In addition, South Korea, Australia, New Zealand and other countries' textile and clothing export threshold will also be greatly reduced, at least in the RCEP to carry out fair and fair competition with other countries.

It is worth noting that FTA can only solve the trade between countries, but RCEP is a whole. In addition to bilateral trade, RCEP can also solve multilateral trade problems involving third countries and fourth countries. In particular, the trade related to the industrial chain may involve multiple countries, which can be settled in a unified region after the agreement takes effect. Making uniform economic rules among member states can help enterprises reduce costs and reduce order risk.

The head of a cashmere fabric enterprise in Hebei said that under the influence of various factors, the traditional markets in Europe and the United States are becoming more and more difficult to do. With the support of such trade agreements, the supply chain of China's export textile enterprises can be more optimized. The wool products from Australia and Europe can be exported to China in the future. Clothing made from corresponding raw materials may also be duty-free if exported to Korea, Japan and other countries.

The signing of RCEP is also conducive to export textile enterprises to further increase investment and cooperation in ASEAN countries. In recent years, China's textile and clothing manufacturing industry as a whole to move to ASEAN with lower labor costs is a major trend. At present, the industry upstream textile enterprises, due to the relatively high technical requirements of products, the overall advantages still remain in China. After RCEP is signed, it will promote the export of these high value-added products.

Suzhou, Jiangsu, a R & D and production of functional fabrics enterprises, 20% of the products are sold to Southeast Asia. The person in charge of the enterprise pointed out that at present, the main products exported to Vietnam market are functional down jacket fabrics, which may increase to 40% after the signing of RCEP agreement, mainly due to mutual tariff exemption and lower export cost. In addition, the import price of high-end looms imported from Japan will definitely drop a lot.

Regional rules will be more unified and standardized

In terms of non-tariff measures, for export-oriented textile enterprises, one of the biggest puzzles of exporting overseas in the past was that the international trade standards of different countries were too different, and trade agreements were changeable, such as the original rules of origin and investment policies. After RCEP is signed, the rules in the region will be more unified and standardized, and the level of trade facilitation will continue to improve, which can greatly reduce the business risk and uncertainty for textile and clothing foreign trade enterprises.

In particular, the unified origin principle of RCEP will bring convenience to China's textile and garment export enterprises in terms of suppliers, logistics and customs clearance. In terms of rules of origin, RCEP uses the principle of regional accumulation in the region, so that the value components of products of origin can be accumulated in the region composed of 15 member states, and the value components from any party of RCEP will be taken into account, which will significantly improve the utilization rate of preferential tariff rate, and encourage international brands to build a unified supply chain and value chain in RCEP, Further improve the production efficiency.

The person in charge of a shoe-making enterprise from Quanzhou, Fujian Province, said that the main investment destination of the enterprise is Vietnam. The company invested in Vietnam a few years ago, mainly to undertake OEM orders of Nike, Adidas and other brands. According to the rules of origin, a product can not be regarded as an effective product in the region of origin after it has been reduced. He said that in the next step, enterprises intend to retain part of the labor-intensive section in Vietnam for processing, and transfer the latter process to China for further processing, so as to maximize the benefits of RCEP through regional coordination and cooperation.

At the same time, RCEP has further enriched the types of certificate of origin. In addition to the traditional certificate of origin, it will also allow the approved exporter's declaration and the exporter's independent declaration, marking that the country of origin declaration system will be changed from the official authorized visa agency's issuing mode to the enterprise's credit guarantee independent declaration mode, greatly saving the government's administrative cost and enterprise's operation Cost, further improve the clearance time of goods.

The ability of industry chain to resist risks will be enhanced

RCEP will greatly stimulate the flow and complementarity of goods, technology, services, personnel and capital among member countries, and will help maintain the stability and smooth supply chain of regional industrial chain, especially in response to the challenges brought by the current epidemic situation.

In the long run, the signing of RCEP will help to enhance the ability to resist global systemic economic risks. For example, in the face of global economic crisis and financial crisis, the ability of a small boat to withstand wind and waves is naturally no match for a giant ship.

In addition, RMB is becoming more and more popular in ASEAN countries, and its penetration rate is increasing. ASEAN has become the main channel for RMB internationalization. With the deepening of RCEP, more ASEAN countries will choose to trade in RMB, and the function of RMB as investment and reserve currency will become increasingly prominent. For export textile enterprises, it can reduce the exchange risk of enterprises and reduce the construction cost of overseas logistics warehousing. The agreement will also increase the attraction of foreign investment into the Chinese market, which will play a very important role in stabilizing foreign trade and ultimately benefit China's foreign trade and textile enterprises.

However, everything has both positive and negative sides. It should be noted that, on the one hand, RCEP is not only good for China's textile and garment exports, but also better than Vietnam and other ASEAN countries. These countries will increase their market share in RCEP region. If China's textile and clothing industry has not changed to the high-end direction, the effect will be more harmful than beneficial. China's small-scale yarn mills, weaving factories and low-grade clothing production enterprises will be affected more and more. If they do not upgrade their industries or improve their product levels and grades, they will be eliminated.

On the other hand, China's brand textiles and clothing will also compete with Japan, South Korea and Australia, and high-quality development is imperative. The promotion effect of RCEP on textile and garment export of other countries will force China's textile and garment industry to accelerate transformation and upgrading, with opportunities and challenges coexisting. It can be said that the strategic significance of RCEP is greater than the promotion of exports.

In addition, the development stages of RCEP contracting countries vary greatly, and it is difficult to achieve coordination in economic, political and cultural aspects. Therefore, the export textile enterprises should give full play to their subjective initiative, cooperate with the textile enterprises of the contracting countries, seek common ground while reserving differences, and maintain the sustainable development of globalization.

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