Shenzhen companies have enjoyed a total of 5.86 billion yuan (US$900 million) of tariff reductions in trade with countries under the Regional Comprehensive Economic Partnership (RCEP) agreement between January and July this year, Shenzhen Customs said Thursday.
Of the total, 3.53 billion yuan went to importers and 2.33 billion yuan to exporters.
The RCEP, the world’s largest trade deal measured in terms of GDP signed by 15 Asia-Pacific nations in November last year, involves all 10 ASEAN members, China, Japan, South Korea, Australia and New Zealand, accounting for about 30 percent of global GDP and one-third of the world population.
The RCEP is expected to progressively lower tariffs, eventually eliminating as much as 92 percent on imports between its parties within 20 years of coming into effect. It will also look to allow freer movement of goods within the region by allowing participating countries preferential access to growing markets and allowing companies to export products anywhere within the bloc without having to meet separate requirements for each country, thereby reducing costs and time. The unified rule of origin helps facilitate international supply chains and reduce export costs throughout the bloc.
“Our company imports different types of electronic components from Japan and tariffs of some components were as high as 12 percent,” said Shi, an employee in charge of customs declaration at a telecommunication company in the city. “With the implementation of the RCEP agreement, import tariffs have gradually decreased. This increases the competitiveness of our products.”
In 2020, auto maker BYD imported stamping molds worth about 120 million yuan from Japan, which would have cost the company nearly 10 million yuan in tariffs, said the head of the customs declaration department of the company surnamed Liu.
“Thanks to the RCEP pact, the tariffs for the same imports will be approximately cut by about 614,000 yuan in the first year and will be cut to zero gradually,” Liu said. “Lowered manufacturing cost will help enhance our cars’ competitiveness in the global market and boost the new-energy vehicle industry.”
Shenzhen Transsion Holdings Co., Ltd., a mobile phone manufacturer, is another beneficiary of the pact.
In one case, the company sells to Thailand self-made smartphones with display screens made of Japan-imported glass. It is entitled to tariff reductions since the phone is treated as a made-in-China piece under the unified rule of origin because the trade is conducted within RCEP member countries.