MNCs grab opportunities as RCEP takes full effect

TIANJIN — At a hotel restaurant in North China's Tianjin municipality, the buffet tables are a feast for the eyes, covered with beef from Australia, lobsters from Vietnam, mussels from New Zealand, soft-shell crabs from Myanmar and rice from Thailand.

Guests from around the world enjoy dishes with ingredients imported from Regional Comprehensive Economic Partnership members.

The RCEP is comprised of 15 members — the 10 Association of Southeast Asian Nations member states, China, Japan, the Republic of Korea, Australia and New Zealand. The RCEP was signed in November 2020 and went into effect on Jan 1,2022, with the aim of gradually eliminating tariffs on over 90 percent of goods traded among its members.

The RCEP came into effect in the Philippines on June 2, marking a milestone with the world's largest free trade pact being fully active for all 15 member countries.

"Our hotel's restaurants benefit a lot from the RCEP agreement coming into force," said Anthony Gill, general manager of the Four Seasons Hotel Tianjin, adding that it is more convenient to purchase ingredients from RCEP members due to a record high number of supplier options.

With the easing of travel policies and the recovery of the tourism industry, the hotel's business has shown impressive growth recently. Hotel room bookings in June surged more than 150 percent year-on-year.

Business travelers from RCEP member countries like Japan, the ROK and Singapore have become frequent guests.

"Many business people from those countries come to Tianjin for opportunities, which in turn, directly supports our hotel's business," Gill said.

Executives of foreign companies in China have also seen great opportunities since the RCEP took full effect.

Shin Eun-shik, from the ROK, has been engaged in the production and sales of water treatment equipment and related accessories in Tianjin since 2002.

"Due to the RCEP agreement in effect for all members, and other factors, our sales revenue is expected to exceed 50 million yuan ($6.98 million) this year, more than double that of last year," said Shin, president of ITM (Tianjin) Mechanic Equipment Co Ltd.

In addition to serving local Chinese companies, Shin's company exports its products to the ROK, Australia, Indonesia and other regions.

"It's more convenient to export goods to Australia. Meanwhile, our Australian customers can reduce costs with reduced or eliminated tariffs. It's mutually beneficial," Shin said.

Shin said it will also help the company as it looks to further enhance the competitiveness of its products and develop new markets in RCEP countries.

SMC (China) Co Ltd, a wholly owned subsidiary of Japanese pneumatic component manufacturer SMC Corp, has also witnessed new opportunities. Since taking root in China in 1994, SMC has established factories in Beijing, Guangzhou in Guangdong province, and Tianjin.

Ma Qinghai, an executive of the company, said after the RCEP agreement took full effect, pneumatic components produced in China have become more competitive.

"We can not only provide more services for the industrial automation industry in RCEP member countries, but also help the supporting suppliers in China enjoy the preferential benefits of the agreement," Ma said.

In the first half, China's imports and exports with the other 14 RCEP members totaled 6.1 trillion yuan, up 1.5 percent year-on-year, contributing more than 20 percent to China's foreign trade growth, according to the General Administration of Customs.

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, said more foreign companies will continue to take root in China due to the comprehensive implementation of the RCEP.

"Foreign companies can expand their future industrial and supply chains to the three major regional economic cooperation circles — China-ASEAN, China-Japan-ROK, and China-Australia-New Zealand. They will share more important trade and investment opportunities created by regional development," Zhang said.