The sun rises in the east and rains in the west. Despite China's ongoing trade frictions with the United States and the European Union, in Asia, the China-ASEAN Free Trade Area (CAFTA) tax reduction plan is about to be implemented, which will benefit 7,000 products and 1.8 billion consumers in the region. It is known as the largest reduction currently. tax plan.
Starting from July 20, China and ASEAN member states will formally provide each other with preferential tariff treatment in accordance with the provisions of the Agreement on Trade in Goods for 7,000 tax items originating in China and ASEAN. The tax rates in the free trade zone enable customs clearance of each other's goods. At the same time, Chinese textile companies that have suffered from European and American special guarantees will also gain new trade opportunities.
Benefiting 1.8 billion consumers
Lu Jianren, deputy director of the APEC Policy Research Center of the Chinese Academy of Social Sciences, said that the establishment of CAFTA will benefit 1.8 billion consumers in the region, and they can obtain Wumart Cheap goods and services.
As the implementation of the CAFTA tax reduction plan approaches, the schedule of China's famous Southeast Asian business expert and the Chinese chairman of the China-ASEAN Business Council is becoming increasingly crowded. He told reporters that since domestic companies know little about the situation and related content of CAFTA, he has given 100 reports across the country, and has been receiving invitations recently. He believes that as China and ASEAN form a unified market, there will be huge business opportunities for Chinese companies.
According to reports, China’s main exports to ASEAN are automatic data processing equipment and its components, textile yarns, motorcycles, etc. The main commodities that my country imports from ASEAN are integrated circuits and microelectronic components, automatic data processing equipment parts, primary-shaped plastics, crude oil, refined oil, natural rubber, etc. In terms of agricultural products, China needs to import some tropical fruits that are only produced in Southeast Asia. China is the main supplier of walnuts, apples, pears, citrus, strawberries, grapes, asparagus and processed tomatoes in ASEAN. Research shows that after the completion of CAFTA, China's exports to ASEAN will increase by US$10.6 billion, an increase of 55.1%, and ASEAN's exports to China will increase by US$13 billion, an increase of 48%.
Since 1997, my country’s trade with ASEAN has always been in deficit. However, judging from the first quarter of this year, the growth rate of my country’s exports to ASEAN (41%) has been higher than that of ASEAN’s exports to my country. growth rate (16%). Last year, the trade volume between China and ASEAN reached US$105.9 billion, an increase of 30% over the previous year and reaching US$100 billion one year ahead of schedule. This is inseparable from the implementation of the early harvest plan and the relaxation of investment restrictions between China and ASEAN last year.
Textile companies have new solutions
In fact, the implementation of CAFTA’s tax reduction plan has also brought new solutions to Chinese textile companies that have been hit by obstacles everywhere.
Although China and ASEAN countries such as Vietnam, Thailand, and Indonesia are competitors in the international textile market, ASEAN's textile industry is not as developed as China's. These countries are also worried about China and ASEAN opening up their markets to each other. Chinese textile companies can invest in the textile industry in ASEAN countries, build processing plants there, and conduct re-export trade. This will alleviate quota pressure in Europe and the United States.
According to expert analysis, Laos is a more suitable country because Europe and the United States have implemented preferential policies for Laos and have no export quota restrictions. China and Laos are both members of the Bangkok Agreement, and Laos is currently a member of the Bangkok Agreement. It is the only ASEAN member that has joined the Bangkok Agreement, so Chinese companies can bring orders and raw materials to Laos for production and then sell to the European and American markets. He told reporters that the president of the Lao Garment Association came to Beijing two days ago and expressed his willingness for Chinese garment companies to invest there.
According to analysis, the textile industries of China and ASEAN countries are complementary. ASEAN countries need Chinese textile machinery products, and also need to import cotton from China, and some other clothing accessories also need to be imported from China. After the formation of a unified market, industry associations such as China Textile Industry Association and Garment Association can communicate, cooperate and integrate resources with ASEAN textile chambers of commerce to form regional comprehensive competitiveness in the international market.
Enterprises investing in ASEAN still need to beware of barriers
Currently, the investment agreement between China and ASEAN is still in the negotiation stage, but Southeast Asian investment in China is far greater than China’s investment in Southeast Asia. By the end of last year, Southeast Asian countries had invested US$25.8 billion in China, while China had invested less than US$2 billion in Southeast Asia. However, after the full implementation of CAFTA, my country's investment in ASEAN will inevitably accelerate.
However, companies interested in investing in the ASEAN market are reminded that the establishment of CAFTA does not mean that everything will be smooth. Some countries still have trade and investment barriers.
According to incomplete statistics, currently more than 80 Chinese trademarks have been registered in Indonesia. The Vietnamese government still implements a compulsory import license system for seven important products: including petroleum, glass, iron products, vegetable oil, sugar, motorcycles and nine-seater motor vehicles. In addition, Vietnam imposes higher consumption taxes on many imported products, while some Automobile products are even subject to a 100% special consumption tax. Thailand is not a signatory to the WTO's "Government Procurement Agreement". In government procurement bidding, Thailand has set a series of restrictions on foreign bidding companies. For example, for government procurement contracts with an amount exceeding 300 million baht, foreign winning bidders must barter for the repurchase value. Not less than 50% of the contract value for Thai products. In Malaysia, products accounting for 17% of the total number of customs tariffs are subject to non-automatic import licensing management, such as construction equipment, agricultural products, mineral products and automobiles, etc. This has caused certain obstacles for similar Chinese products to enter the Malaysian market. Therefore, experts suggest that companies should consult local Chinese embassies and relevant institutions before investing in ASEAN.
Related China-ASEAN Free Trade Area
The China-ASEAN Free Trade Area is a free trade arrangement established between China and the 10 ASEAN countries.
On November 29, 2004, the two sides signed the "Goods Trade Agreement" in Vientiane, Laos. The agreement stipulates that starting from July 2005, in addition to early-harvest products and a small number of sensitive products that were already subject to tax reductions in 2004, both parties will implement tax reductions on approximately 7,000 other tax items. By 2010, China and six old ASEAN members including Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand will cancel tariffs on most products and establish free trade areas. The four new members of ASEAN, including Cambodia, Laos, Myanmar and Vietnam, will enjoy a five-year transition period and achieve free trade with China in 2015.
"Bangkok Agreement"
The full name of the "Bangkok Agreement" is the "First Agreement on Trade Negotiations among Developing Member States of the Asia-Pacific Economic and Social Economy", which was developed by the United Nations Economic and Social Council for Asia and the Pacific A regional trade arrangement between member countries that is more favorable than most-favored-nation treatment. The aim is to expand trade among member countries and promote economic development of member countries through such arrangements. It was signed on July 31, 1975, and China officially joined on May 23, 2001. Currently, the official members of the Bangkok Agreement include Bangladesh, China, India, South Korea, Laos and Sri Lanka.