RCEP will boost trade, help SMEs 'go global'

The Regional Comprehensive Economic Partnership took effect for all 15 member states on June 2. Since being signed in early 2022, the RCEP has been promoting intraregional trade and economic development, and China, as an RCEP member, has seen steady growth in its imports and exports.

China's foreign trade will help boost its economic development and "dual circulation" development paradigm, in which the domestic market is the mainstay and the domestic and overseas markets reinforce each other. It will also play a bigger role in the world economy. In this context, the comprehensive implementation of the RCEP, the world's largest free trade deal, indicates greater generation of momentum.

The RCEP is a free trade agreement covering the largest population with the most diversified membership structure and the greatest development potential. It covers about 30 percent of the world's population, economic volume and total trade. As RCEP member states gradually fulfill their commitment to lower tariffs, open markets and reduce barriers to trade, the economic and trade relations in the region will become stronger, and the market potential of most member countries will continue to be unleashed, shoring up regional trade in Asia.

It is therefore clear that the RCEP will play an increasingly important role in China's foreign trade, and effectively drive trade growth in the region by reinforcing business ties between China and other regional markets.

How can small and medium-sized enterprises take advantage of the opportunities offered by the RCEP?

The SMEs that make up 99 percent of China's enterprises are an essential part of the country's foreign trade. Benefiting from the simpler customs procedures, better trade facilitation and lower tariffs that come with the RCEP, these SMEs will get more room for development in the international market, and in turn create new opportunities for the robust growth of foreign trade.

The RCEP values the SMEs' contribution to economic growth and has created a favorable business environment for them. Through measures including pre-shipment inspection and pre-arrival processing, the RCEP streamlines customs procedures and speeds up customs clearance, enabling SMEs to participate in regional supply and value chains more efficiently.

The tariff concessions in the RCEP region will help the SMEs reduce their import and export costs, because the RCEP will ultimately eliminate tariffs on more than 90 percent of goods trading among its signatory parties immediately or within 10 years, which will incentivize the SMEs to "go global".

Survey results indicate that since the RCEP took effect, China has seen growth in both the number of small and medium-sized foreign trade enterprises exporting to the region and the income they have earned.

Lower tariffs also mean making more affordable imported goods available to consumers, which will improve their ability to buy and enable the SMEs to open up to a larger consumer market. This, by the way, will be accompanied by the high requirement for delivery speed and challenges for cross-border delivery of goods. As such, the SMEs urgently need reliable cross-border logistics partners to help them seize the enormous opportunities created by the growth of regional trade.

The RCEP will not only help boost the development of the SMEs and the regional economy, but also facilitate closer ties between China and other RCEP members in a wide range of industries.

The author is senior vice-president of FedEx Express and president of FedEx China.