RCEP deepens industrial cooperation with Asean

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Mutual benefit: Employees on the production floor of a factory in China. The country’s trade with Asean reached US$437.8bil (RM1.95 trillion) in the first half of this year.— Bloomberg

NANNING: At a leading paper factory in south China’s Guangxi Zhuang Autonomous Region, a production line was running at full steam as orders from Asean surge this year.

“Nearly 90 containers filled with white cardboard produced by the factory are shipped through Qinzhou port every day to Asean markets and the number keeps increasing,” said Zhou Ju, logistics department director of Guangxi Jingui Pulp & Paper Co, Ltd, owned by Indonesia’s Asia Pulp & Paper Sinar Mas.

Since the Regional Comprehensive Economic Partnership (RCEP) entered into force in January, trade costs have been further reduced among member countries and related companies have seen tangible benefits.

Customs data showed that, in the first half of this year, China’s trade with Asean reached 2.95 trillion yuan (US$437.8bil or RM1.95 trillion), a year-on-year increase of 10.6%.

Zhou said that the raw materials like wood chips, wood pulp, and starch imported from Asean countries now enjoy preferential tariffs thanks to the RCEP agreements.

That had greatly saved the cost of the company.

The Indonesian company also established a branch in January in Nanning, capital of Guangxi, to manage the forestry affairs of the group in China, Laos, and Cambodia.

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It also seeks to expand industrial chains as the company eyes the giant economic cooperation potential among China and Asean countries worth billions.

Companies believe that the implementation of RCEP enables Asean and Chinese enterprises to conduct business in a more transparent and clear environment, simplify customs clearance procedures, and facilitate trade and economic exchanges.

“The implementation of RCEP has brought real benefits to our company and our partner companies in Malaysia,” said Li Huihuan, deputy general manager of Guangxi Free Trade Zone Sing Nest International Trading Co, Ltd, a Singaporean-funded health food production and processing enterprise in Guangxi.

The company has been importing raw materials like edible bird’s nests from Malaysia.

Li added that thanks to the simplified customs clearance brought by RCEP, the production and operation efficiency of the enterprise have greatly improved.

“The time span from ordering raw materials in Malaysia to receiving goods has been shortened from 15 days to five days, which has greatly reduced our warehousing costs,” Li said.

For Chinese companies in Guangxi, RCEP also boosted their confidence to deepen cooperation with Asean countries. Liugong Machinery Co, Ltd transported a large number of loaders to Thailand in January and signed a joint venture agreement with Thai distributor Yontrakarn in February.