Nancai Quick Review: RCEP will add new momentum to promote the development and prosperity of the region

At the beginning of the new year, the Regional Comprehensive Economic Partnership Agreement (RCEP) came into force. RCEP is currently the world's largest participation in the population, the largest membership structure, the largest development potential of the free trade agreement, its total population, economic volume, total trade accounted for about 30% of the global total, its member states include ASEAN 10 countries and China, Japan, South Korea, Australia, New Zealand 5 countries. The agreement covers a wide range of areas such as tariff reduction and reduction, trade facilitation, service investment opening, and intellectual property protection. After the RCEP agreement comes into force, more than 90% of the trade in goods between approved member countries will eventually achieve zero tariffs; by 2030, RCEP is expected to lead to a net increase of US$519 billion in exports and a net increase of US$186 billion in national income; and nearly 30% of China's exports after the entry into force can achieve zero tariff treatment, covering China's trade volume of 1.4 trillion US dollars.

As the world's largest FTA, RCEP is a comprehensive, modern, high-quality and mutually beneficial FTA. After the agreement takes effect, trade and investment liberalization and facilitation measures and unified economic and trade rules will significantly reduce operating costs, reduce the uncertain risk of operation, and provide institutional guarantees for stabilizing regional industrial chains and supply chains, and accelerate the flow of goods, technologies, services and capital. Under the background of the covid-19 pandemic exacerbating world economic risks, "anti-globalization" and global supply chain shocks, the RCEP has entered into force as scheduled after eight years of negotiations, which is not only a landmark achievement of Regional Cooperation in East Asia, but also will add new momentum to the development and prosperity of the region and contribute to world economic growth.

Among the members of the agreement, ASEAN, Japan, New Zealand, etc. are all important agricultural powers or regions, and there is a huge space for the development of agricultural economic and trade cooperation between China and ASEAN, Japan and Australia. The implementation of RCEP will bring opportunities for China's agricultural foreign investment.

Judging from the current situation of agricultural investment between China and RCEP members. RCEP member states are important regions for Agricultural Investment in China, and the Asia-Pacific region, especially Southeast Asian countries, Australia and New Zealand are the main destinations for Chinese agriculture-related enterprises to go global. Among them, Australia, Indonesia, New Zealand, Thailand and Singapore are all the top ten countries in China's investment stock in Asia. According to the "Analysis Report on China's Agricultural Foreign Investment Cooperation" (2019), China's agricultural investment stock in RCEP countries accounts for about 40% of China's agricultural foreign investment stock. For a long time, China and RCEP members have a close cooperative relationship with agricultural trade and agricultural investment. China's imports and exports of agricultural products to the other 14 RCEP members increased from US$3.61 billion and US$8.81 billion in 2001 to US$44.03 billion and US$35.64 billion in 2020, with an average annual growth rate of 14.1% and 7.6% respectively. From 2001 to 2011, China maintained a general trade surplus with the other 14 countries, with a deficit of $1.43 billion for the first time in 2012 and an increase of $8.76 billion in 2019.

The implementation of RCEP will bring development potential and opportunities to China's agricultural foreign investment. On the one hand, it is conducive to further expanding the export and foreign investment of advantageous agricultural products. Japan is the largest export market for China's agricultural products, and in the RCEP agreement, China and Japan reached a tariff concession arrangement for the first time, which has historically opened up the Japanese agricultural product market. At the same time, China has achieved new product opening treatment on the basis of the original China-ASEAN and China-South Korea Free Trade Area. All these have brought new opportunities for China's agricultural foreign investment. On the other hand, it provides a more stable, open, transparent and convenient environment for China's agricultural foreign investment. ASEAN countries have adopted the negative list method to make high-level open commitments and significantly reduce restrictions in the field of agriculture-related investment. For example, Thailand has abolished regulations prohibiting foreign investment from entering rice planting, livestock breeding, sugar processing and other fields, allowing sole foreign-owned enterprises in dairy product manufacturing, starch product manufacturing, macaroni manufacturing and other industries; Vietnam has lifted the restrictions on foreign capital engaged in aquatic product processing, vegetable oil processing and dairy processing that need to use its own raw materials; Indonesia has removed the processing of coconut meat, pickled fish and smoked fish and other aquatic products from the list of prohibited foreign investors to allow foreign joint ventures.

The agricultural trade and agricultural investment cooperation between China and RCEP countries has been close for a long time, and the overall scale continues to grow, and the advantages of China's agriculture in terms of market, capital, technology and business environment will drive the cooperation between the entire RCEP in the field of agricultural economy and trade towards a larger scale and a higher level. It is necessary to seize the opportunity of RCEP and promote the sustained and healthy development of China's agricultural foreign investment.

First, the government, industry and enterprises should cooperate with each other and work together. The government should build an investment negotiation platform between the members of the agreement to promote the entry into force and liberalization of RCEP; industry organizations and associations should provide enterprises with information on foreign market conditions, provide training on foreign investment, and guide enterprises to go global; enterprises should attach importance to agricultural foreign investment and seize the opportunities of RCEP.

Second, enterprises should actively expand the export market. Familiar with the scope of tax reduction, tax reduction range and tax reduction transition period of RCEP agricultural products; investigate the consumption scale, market capacity, demand characteristics, and main competitors of the target market, accurately locate the target market; attach importance to improving the level of technical equipment and innovation ability, and produce marketable products according to the consumption preferences of the target market; participate in online and offline industry exhibitions, with the help of overseas clothing product display centers and "overseas warehouses" and other platform channels, widely meet customers, obtain market information, and expand foreign investment channels Pay attention to the grasp of the rules of origin of the RCEP Agreement, and be familiar with the laws and regulations of the relevant countries on entry-exit inspection and quarantine, so as to make use of the agreement in the first place.

Third, increase the training of international talents. Agricultural foreign investment must face unpredictable policy risks in overseas markets, a new business environment, and a huge cultural gap, which requires a large number of high-quality comprehensive talents who are familiar with the international market, the investment environment of the host country, cultural habits, and have management experience.

Fourth, plan the layout of the industrial chain value chain in the region. Closely follow the national battle road, closely follow the main business, clearly position at the strategic and tactical level, strengthen the research on the basic information such as agricultural resources, industrial development level, and agricultural investment opening commitments of RCEP member countries, and identify partners; fifth, adjust the mode of agricultural foreign investment cooperation and development, and cultivate new formats such as agricultural service trade. Take advantage of the opportunity to expand access to the agricultural service market of ASEAN and other members under the RCEP, and carry out agricultural projects such as agricultural technical cooperation and agricultural mechanization cooperation with these countries, promote high-quality clothing drugs, agricultural machinery and agricultural technology to go global, and enhance China's influence in the field of global agricultural service trade while helping domestic agriculture to add value and efficiency.

(Li Chunding is a professor and director of the Department of Economics and Trade of the College of Economics and Management of China Agricultural University, executive vice president of the "Belt and Road" International Agricultural Product Circulation Industry Innovation Institute; Zhang Run is a master's student of the College of Economics and Management of China Agricultural University; pei Taowu is a doctoral student of the College of Economics and Management of China Agricultural University.) This article is a column of the young scientist innovation team of "New Pattern of World Economy" of China Agricultural University. ）

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