Free Trade Agreement In China

Turkey has bilateral and multilateral agreements: many Member States already have free trade agreements, but there are restrictions. China`s free trade agreements include Hong Kong and Macao, with the Hong Kong version known as the Closer Economic Partnership Agreement (CEPA), whose regular updates on its benefits, which we have long talked about on China Briefing. The CEPA agreement between China and Hong Kong offers many advantages to foreign investors who create local businesses in Hong Kong, which reduce (after a qualification phase) the source taxes and dividends on funds that are re-injected from the mainland to the territory. Macau offers similar benefits and especially in the services sector and the financial sector – extremely useful given Macau`s evolution towards an important tourist and casino destination. Premier Li Keqiang, China`s second-highest official after Xi Jinping, led the Beijing event. In a statement published by state media, he called the pact a “victory for multilateralism and free trade.” Due to the pandemic, the signing of the agreement on Sunday was unusual, with separate ceremonies in each of the 15 member countries, all video-linked. The trade minister of each country took turns signing a separate copy of the pact, while its head of state or head of government stood nearby and watched. However, the most important free trade agreement that China has negotiated so far is with ASEAN. With the ASEAN bloc, which included Asian tigers from Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, as well as smaller regional players such as Brunei, Cambodia, Laos and Myanmar, this unique agreement alters the development of Chinese and ASEAN production. Many Chinese commentators have focused on increasing the cost of labour in China and have seen how many Chinese companies are now facing rising wages. The ASEAN agreement offers a solution by allowing companies to relocate to other low-priced regions of Asia, to use these lower costs while being able to serve the Chinese market through duty-free imports authorized by the free trade agreement. An Indonesian product containing, for example, Australian coins could expect tariffs elsewhere in the Asean Free Trade Area.

The RCEP agreement is flexible enough to meet the needs of different countries as diverse as Australia, Myanmar, Singapore and Vietnam. The Free Trade Agreement between China and Switzerland is the first bilateral free trade agreement signed between China and a country on the European continent and one of the world`s top 20 economies. For some trade experts, this new agreement shows that the rest of the world will not wait for the United States. The European Union has also conducted trade negotiations at an aggressive pace. While other countries are signing new agreements, U.S. exporters may gradually lose ground. “Ratification is likely to be difficult in national parliaments, both because of anti-commercial and anti-Chinese sentiment,” he added.

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