China urged to leverage Southeast Asia-led trade pact amid diversification trends
- Regional Comprehensive Economic Partnership (RCEP) allows China to diversify its supply chain and enhance ties with Southeast Asia, economists say
- The trade deal not only helps China mitigate global supply chain risks caused by the pandemic, but to capitalise on the ‘growing middle class in Southeast Asia’
Chinese companies should leverage regional trade deals to consolidate business ties with their Asian partners amid a heightened rivalry with the United States, economists and business executives said at the Boao Forum for Asia.
The experts said China could be using the Regional Comprehensive Economic Partnership (RCEP) to diversify its supply chain and seek more partnerships with Southeast Asian countries, which would help it climb up the industrial chain and keep competitive.
RCEP, comprising 15 member countries including China, took effect on January 1 last year and is the world’s largest trade pact, covering about a third of the world’s population and 30 per cent of global gross domestic product (GDP).
“RCEP offers great opportunities in terms of policy and tariffs, the [shipping] industry including our company, plans to move into Southeast Asia and into emerging markets in the future,” Feng Bo, executive vice-president of China COSCO Shipping Corporation Limited, said at the forum on Tuesday on the tropical island of Hainan.
The global shipping industry has been challenged by the lack of terminal positions at ports and increased operating costs for companies due to their social and economic responsibility to reduce carbon emissions and protect the environment, Feng said.
