On January 1, 2022, the “Regional Comprehensive Economic Partnership Agreement” (RCEP) officially came into effect in 15 member countries, marking the official launch of the free trade area with the world’s largest population, largest economic and trade scale, and the most development potential. The entry into force of RCEP will have a profound impact on my country’s textile and apparel industry.
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RCEP takes effect
It is of great significance to my country’s textile foreign trade
The textile industry is related to the national economy and people’s livelihood. It is a pillar industry with traditional advantages in my country. It is also one of the industries with the most complete industrial chain and the strongest international competitiveness in my country. Over the past 40 years of reform and opening up, especially the 20 years since its accession to the WTO, China’s textile and apparel industry has developed steadily, the scale of the industry has continued to expand, and its international competitiveness has continued to improve. Textile and apparel exports have increased from US$52.7 billion in 2001 to US$296.2 billion in 2020, with a cumulative An increase of 4.6 times. The number of textile and clothing export companies increased from 30,000 in 2001 to 110,000 in 2019. A number of leading companies, “hidden champions” and foreign trade bases have emerged, forming an ecosystem in which a large number of small and medium-sized enterprises participate, and become the supplier of my country’s textile and clothing industry chain. chain stabilizer. The industrial foundation continues to be consolidated, the industry’s resilience continues to increase, innovation capabilities gradually improve, and transformation and upgrading accelerate. Based on this, China continues to integrate into and lead the adjustment of the global textile and apparel supply chain, industrial chain and value chain, moving towards high-quality development. .
Since 2021, faced with the impact of multiple unfavorable factors, my country’s textile and apparel foreign trade industry has actively leveraged the advantages of a stable and strong supply chain and industrial chain. Exports have hit a record high for the same period in history, showing a stable and positive situation. As the scale of trade grows, the risks and challenges faced by the industry increase, especially as the international trade environment becomes increasingly complex, foreign trade protectionism tends to intensify, and there are many uncertainties in exports. At this time, the entry into force of RCEP will undoubtedly be a booster for free trade and a timely boost for regional cooperation. It will release many dividends from international trade and investment policies, and bring benefits to the international development of my country’s textile and apparel industry and the consolidation and integration of the global textile and apparel supply chain. Major benefits.
RCEP is currently the largest free trade zone in the world. The completion of the RCEP free trade zone means that about one-third of the global economy will become an integrated giant market, which will promote the free flow of economic factors within the region, strengthen production division of labor cooperation among members, and stimulate the expansion and upgrading of the regional consumer market. Promote the further development of industrial and supply chains in the region.
In recent years, with the deepening of production capacity cooperation between China and neighboring countries, especially ASEAN countries, in the textile and apparel field, RCEP members have formed a regional industrial cooperation model with China as the center. On the one hand, with its strong comprehensive competitiveness and stable and complete industrial chain advantages, China has maintained a direct export of textiles and clothing of nearly 300 billion US dollars; on the other hand, Chinese companies have taken advantage of ASEAN countries’ low-cost and labor resource advantages to strengthen international Production capacity cooperation has made important contributions to promoting textile and apparel exports, employment and economic growth in ASEAN countries. It has also driven the growth of China’s exports of intermediate products such as yarns and fabrics to ASEAN, and has increased the mobility and activity of textile and apparel trade in the region. and interdependence have increased significantly, thus driving the rise of China-centered Asian supply chains.
The signing of RCEP is the most important achievement of East Asia’s economic integration in the past 20 years, and will surely have a positive and far-reaching impact on the textile and apparel trade and industrial chain pattern between China and Asian countries.
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RCEP signed
Bringing opportunities to my country’s textile industry
RCEP integrates and expands the “10+1” free trade agreement between ASEAN and China, Japan, South Korea and other member states, and has made high-level openness commitments through multiple measures such as rules of origin, tariff reduction, positive and negative lists, etc., and has provided a good foundation for my country’s textile industry. Apparel companies provide excellent opportunities to expand intra-regional trade scale, optimize resource allocation, integrate and strengthen supply chains, and enhance value chains for transformation and upgrading. The completion of the RCEP free trade zone will provide great assistance to my country’s textile and garment industry in forming a new development pattern in the new era with the domestic cycle as the main body and the domestic and international dual cycles reinforcing each other.
From the perspective of the global textile and apparel trade pattern, the RCEP region is undoubtedly the most important textile and apparel manufacturing center in the world. It also has a huge and rising consumer market with the greatest global growth potential.
On the supply side, China, ASEAN, South Korea, Japan and other countries are important global textile and apparel manufacturing, R&D and design centers. In 2020, the textile exports of the 15 member states reached US$187.8 billion, accounting for 39% of the global textile export trade, and the clothing export volume reached US$208.8 billion, accounting for 29.6% of the global clothing export trade.
On the demand side, Japan, South Korea, Australia and other countries are important traditional textile and clothing import markets in the world. China’s ultra-large consumer market has growing import demand. As a rapidly developing clothing manufacturing base, ASEAN’s import scale of textile intermediate products is also extremely large. huge. In 2020, the textile import volume of the 15 member states reached US$71.84 billion, accounting for 12.3% of the global textile import trade, and the clothing import volume was US$61.39 billion, accounting for 7.2% of the global clothing import trade. According to estimates from the McKinsey Fashion Research Center, in recent years, the Asia-Pacific market has accounted for nearly half of global clothing and footwear consumption. R, which is based on Japan, South Korea, Australia and New Zealand and China as its growth engineOnly products produced within the free trade zone can enjoy tax-free treatment. This is why many Chinese companies must invest in fabric production when investing in clothing manufacturing in ASEAN countries, because only in this way can they be regarded as originating in ASEAN and enjoy Japan’s tariff-free treatment (least developed countries such as Cambodia, Myanmar, etc.) not subject to this restriction). After the implementation of RCEP, fabrics imported by ASEAN countries from China, processed into clothing in ASEAN, and then exported to Japan will be regarded as originating in the RCEP area, and therefore can enjoy tax-free treatment without exception.
Therefore, after the implementation of RCEP, products that were originally subject to the rules of origin of the ASEAN-Japan and Vietnam-Japan Free Trade Agreements and had to be produced locally in ASEAN, or that did not enjoy tariff-free treatment because ASEAN was unable to produce them, will be able to enjoy Japan’s The tariff-free treatment will help ASEAN countries make full use of China’s production advantages of intermediate products such as yarns and fabrics to expand exports to Japan, which will also benefit the export of Chinese intermediate products to ASEAN countries and ultimately maximize resources in the production chain. Best configuration.
Second, the implementation of RCEP will help slow down the external transfer of my country’s entire textile and apparel industry chain and build an Asian textile and apparel supply chain and a unified market centered on China.
The implementation of RCEP will help China and ASEAN, the two most important textile and apparel production centers in the world, to integrate and further integrate production, especially in export trade to Japan, without the need to circumvent restrictions on rules of origin. Unnecessary waste of resources and inefficient allocation can better leverage the high-end manufacturing advantages of China’s textile and apparel industry, especially intermediate products, slow down the transfer of the entire industry chain, maintain my country’s central position in the global supply chain, and thus maintain peace and stability. Significantly enhance the global competitiveness of my country’s dominant textile and apparel industries and outstanding enterprises, and promote more powerful Chinese-funded enterprises to “go global” through regional economic integration.
■ Industrial level: Trade investment and industrial synergy will be significantly enhanced
The unified and transparent investment environment created by RCEP will be conducive to enhancing trade investment and industrial synergy between China’s textile and apparel industry and RECP countries. RCEP lowers trade and investment barriers and creates a unified large market, which is conducive to the optimal allocation of resources by Chinese textile and garment enterprises in the region and the realization of international layout. By strengthening industrial division of labor and cooperation among member partners, we can achieve complementary advantages, promote the formation of a more reasonable regional industrial chain, supply chain and value chain closed loop that benefits all parties in the region, and overall enhance the status of RCEP member countries in the global textile and apparel industry competition landscape. .
In terms of product design and research and development, international marketing network, brand overseas and cross-border e-commerce, Chinese textile and apparel companies will have the opportunity to leverage their own advantages, fully explore the potential of regional markets, especially the Southeast Asian market with a large population and rapid growth, and realize the value chain improvement. In recent years, my country’s well-known clothing brands have been optimistic about the market potential of the RCEP region and accelerated their overseas layout. For example, Anta has opened flagship stores in Vietnam, Malaysia, the Philippines and other countries; Lily has opened 70 retail stores in 11 countries including Thailand and Singapore; Hailanzhi The company has opened 29 stores in Malaysia, Thailand, Singapore, Vietnam, Japan and other countries; Semir has deeply explored the Lazada platform and opened physical stores in Indonesia and Laos. In the future, with the help of the unified regional platform provided by RCEP, my country’s textile and apparel industry will gradually achieve high-quality development and leaps from “RCEP manufacturing” to “RCEP consumption” to “RCEP brand”.
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How should Chinese textile companies seize opportunities?
RCEP will deepen the integration and layout of my country’s textile and apparel industry chain and provide major development opportunities for my country’s textile and apparel export enterprises. It is recommended that enterprises consider the following aspects to maximize the use of the RCEP agreement:
First, we must carefully study, understand and use the tariff reduction schedule. Combined with the tariff reduction arrangements of RCEP, on the one hand, the import and export trade of related products will be expanded in an orderly manner with reference to the progress of concessions; on the other hand, a refined and complete division of labor system will be established in the region based on the characteristics of each RCEP member country applying different tariff reduction ranges. To make full use of the RCEP regional rules of origin to obtain the greatest tariff preferences. When multiple free trade agreement origin standards are applied at the same time, companies can conduct a comprehensive evaluation from many aspects such as the scope of tax-reduced products, the severity of the rules, the extent of tariff concessions, and the convenience of operating procedures to choose the rules of origin that best suit their needs. , to reduce the cost of the final product.
The second is to pay attention to the analysis and judgment of the rules of the RCEP agreement and optimize regional industrial chain and supply chain arrangements. When carrying out international production capacity cooperation and investment layout, it is necessary to fully evaluate the origin, investment and other relevant rules of RCEP and other free trade agreements in the region, and select the best and most suitable ones to use in terms of production costs, raw materials, industrial upstream and downstream, and markets. Carry out more complete industrial chain and value chain adjustment and layout.
The third is to pay attention to and study the implementation of customs procedures, inspection and quarantine, and technical standards rules of each RCEP member country. Assess the existing import and export links and logistics arrangements, optimize the declaration model, shorten trade time, simplify trade processes, and fully reduce trade costs.
The fourth is to actively apply for the convenient measures and preferential policies adopted by RCEP member states for enterprises, and make good use of preferential rules such as trade facilitation, movement of natural persons, and investment that are closely related to enterprise management and trade investment.
We have reason to believe that with the strong support of RCEP, the internationalization level and global layout of my country’s textile and apparel enterprises will be effectively improved, and the long-term development of my country’s textile and apparel industry will be promising in the future.
Rules.
We have reason to believe that with the strong support of RCEP, the internationalization level and global layout of my country’s textile and apparel enterprises will be effectively improved, and the long-term development of my country’s textile and apparel industry will be promising in the future.
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