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As the Regional Comprehensive Economic Partnership agreement entered into force for Malaysia on Friday, China and Malaysia begun to impose RCEP tariffs on each other, which will bring new economic cooperation opportunities, said a report by CCTV News.

 

Within ASEAN, Malaysia is expected to be the largest beneficiary of the agreement in terms of gains in exports, with a projected $200 million increase, according to the country's International Trade and Industry Ministry.

 

Under the RCEP agreement, the two countries commit to expanding market opening on the basis of China-ASEAN Free Trade Area Agreement, and some goods can enjoy new tariff preferences, said the report.

 

China started to adopt the first-year tariff rates on parts of imports from Malaysia according to the RCEP agreement and new tariff reductions and exemptions are implemented on Chinese exports to Malaysia. They include processing aquatic products, cocoa, cotton yarn and fabrics, chemical fiber and stainless steel. Also included are Malaysian exports to China such as canned pineapple, pineapple juice, coconut juice, pepper and other agricultural products.

 

Malaysia is China's second-largest trading partner in ASEAN, while China has been Malaysia's largest trading partner for 13 consecutive years.

 

From January to February this year, bilateral trade volume between the two sides reached $29.45 billion, up 28.1 percent year-on-year, 12.2 percentage points higher than the overall growth rate of China's foreign trade in the same period, according to statistics from the General Administration of Customs.

 

The effectiveness of the agreement to Malaysia will further unleash the potential of trade in goods between China and Malaysia. It will also help transform and upgrade regional industries and inject new vitality into regional economic development, said the report.

 

Preferential policies of RCEP and the China-ASEAN Free Trade Area will help build a resilient industrial and supply chain between the two countries, said Yu Zirong, vice-president of the Chinese Academy of International Trade and Economic Cooperation.

 

The RCEP has introduced unified e-commerce rules and trade facilitation provisions, which will further expand the scope of cooperation between China and Malaysia in areas such as cross-border e-commerce, digital transformation of traditional enterprises and digital infrastructure, Yu said.

 

With the RCEP coming into Malaysia, many enterprises deeply invested in the Malaysian market are seizing new opportunities to enjoy more policy dividends.

 

After the RCEP takes effect in Malaysia, the customs clearance speed will be accelerated from 10 days to seven days, which will reduce the warehousing and logistics costs, said Li Huihuan, head of a bird's nest processing enterprise in China (Guangxi) Pilot Free Trade Zone.

 

The orders from Malaysia are expected to grow about 20 percent this year with the company's products becoming more competitive in the Malaysian market, said Zheng Zuguo, head of TPV Electronics (Beihai) Co Ltd.

 

He said the company may enjoy about one million yuan ($157,270) in tariff reductions and exemptions after the implementation of RCEP in Malaysia.

 

Signed in November 2020 by 15 Asia-Pacific countries, the RCEP deal, which became operational on Jan 1, 2022 initially in 10 countries, is now effective in 12 out of 15 signing members, which are 10 ASEAN members and China, Japan, the Republic of Korea, Australia and New Zealand.

 

After eight years of negotiations that started in 2012, the trade bloc now covers nearly a third of the world's population and accounts for about 30 percent of global GDP. More than 90 percent of merchandise trade will eventually be subject to zero tariffs, according to Xinhua. (chinadaily.com.cn)