RCEP Opprotunities and challenges- An Australian Prospective
Dear His Excellency DR.Sommai Eiamsaaro，Secretary to the prime minister，Secretariat of The State Council of Thailand；Mr. Bhokin Bhalakula, former deputy Prime Minister of Thailand; the prominent business delegation from Thailand; Mr. Meng Jianjun, Deputy Head of the Mass Organizations Work Department of Xiangjiang New Area, Hunan Province, Madam. Deng Wei, Chairman of the Overseas Chinese Federation of Xiangjiang New Area, Ladies and Gentlement,
My name is Richard YUAN, chairman of Australia China Enterprenuers Club. I am both very honored to speak at the 2nd China Thailand (Changsha) Economic & Trade Cooperation Forum, where people from RCEP countries can gather together to embrace this significant occasion.
China has been enjoying a close tie and fantastic trading records with the ASEAN countries, where we in Australia, wished to have participated more in trading with both China and the ASEAN countries. The RCEP that was finally formed in later 2020 has remedied and addressed that issue properly.
The Regional Comprehensive Economic Partnership (shortened as RCEP) is a free trade agreement between 15 Asia-Pacific countries, including ALL ASEAN countries, China, Japan, Korea in Northeast Asia, plus New Zealand and Australia in Oceania. RCEP is expected to bring tremendous opportunities to these countries, and please allow me to elaborate specifically in three of the most related countries today, namely, China, where this conference is now being held; Australia, where I came all the way, and Thailand, where this is most relevant as I know from the VIP guest lists today, so many VIP guests from Thailand have been able to participate today at this conference.
China’s first and 2nd tier cities have always been the first to catch the attention of both traders and investors from around the world. This is particularly true in the instance of China in the past 45 years since China’s opening to the outside world in 1978. Now China’s economic opportunities extend further to more inner cities, where the doors were opened slowly, but surely, as part of China’s growth strategy, from the mega, coastal, super cities to the less privileged inland cities of China.
In 1978, Changsha has a merely Gross Domestic Growth of US$240 million only, compared to US$200 billion dollars (nearly 1000 times more) in 2022; while the whole of Hunan Province had a GDP of US$2.1 billion dollar only in 1978, compared to a US$18 trillion in 2021 (also 1000 times，remember, that is in the Covid19 period) Changsha, the capital city of Hunan Province, is now a favorite of such unprecedented grown and economic powerhouse of Central China, where its huge economic growth potential has been slowly unleashed…and that’s why it is now a perfect venue for our forum today.
I still remember, back in September 2019, Australian exporters were able to come and gather here in Changsha to attend what I called” Australian Week in Hunan” and they were amazed and very keen to look into the opportunity in one of China’s fastest growing area in the middle of China. However, due to the outbreak of Covid19, this has been put on a “pause” button. But this September, we would be intending to launch a “Hunan Int’l Business Week” around 15-22nd of September, 2023 and some business delegations from Canada, the US, New Zealand and Australia have expressed their intention to participate that week long business gatherings that includes trade shows, international conference and factories and business visits. I hope to be able to welcome you here.
On another note, China is probably one of the very few cities that regularly release and review its five year plan as part of its growing strategies since its founding. We in Australia do not have that privilege as Australian election cycles in its government simply would not fit in properly and a 5 year plan would be beyond any term of any levels of Australian government. Therefore, China’s unmatched growth in the past 4 decades have been the envy of Australian entrepreuers and business owners.
Opportunities:
Now, I would like to share what I believe to be the current opportunities that we need to embrace:
China:
Although China has many 1 to 1 economic partnership agreement in the past, the RCEP will provide Chinese companies with much greater access to markets in other RCEP countries, in addition to the ASEAN countries where the economic growth has been extremely healthy in the past couple of decades. This is beneficial to China as it can help boost exports and investment. In addition, it will help China to diversify its markets and reduce its over dependence on trade with the United States and Europe. Such efforts are also evident in Africa, where the Bi-Annual China Africa Forum were focused on China’s effort to trade and invest with the 54 countries continent. Changsha is also the lucky city to host such events and it is now a permanent host city for this great event. The agreement will also help reduce trade barriers and promote economic integration in the Asia-Pacific region.
Australia:
China and Australia has signed a Free Trade Agreement (FTA) on November 17, 2014, where I personally have witnessed that important occasion, when China’s President Xi Jinping visited Australia and delivered an important speech in the Parliament House in Canberra. The FTA has benefited many Australian companies, including mine, to export Australian goods and services to China’s mainland. Chinese consumers were able to enjoy super quality level exports like quality wines, milk powders, and even baby infant formula etc since, and China and Australia have enjoyed such a cozy relationship prior and post the signing of the FTA. It was not until August 23, 2018, when Australia banned Huawei, that the relationship deteriorated suddenly and substantially and both trade and investment were hit and people of both countries have suffered phenomenally. The timely signing of RCEP in 2020, virtually replaced the above FTA and it will now provide Australian businesses with greater access to markets in Asia, particularly Korea, China and Japan. The agreement will also help reduce tariffs on Australian exports, making them more competitive in these markets. Australian firms will also have better access to investment opportunities in other RCEP countries.
Thailand:
As a major exporter in Southeast Asia, Thailand is expected to benefit from increased trade with other RCEP countries, and hopefully more with China, particularly more with my home province. The agreement will help to reduce tariffs on Thai exports, making them more competitive in these markets. It will also provide Thai businesses with greater access to investment opportunities in other RCEP countries.
Challenges
There are, unfortunately breakdowns of communications between China and the West, as whatever the Chinese promote can hardly be heard in the West, while the West, including Australia, where I came from, speaks its own language and form our own narratives. There are definitely no easy remedy for such barriers, but hopefully, with more international forums like this, we can help bridge the difference and break the barrier, by trying to communicate at all levels, from grossroots and top level leadership, I would call on all of you to make the initial move and take the initiative to spread the goodwill message around.
Hunan Provincial Perspective:
Digital economy would be the next power engine of China, and it is also the national strategy of China; Changsha, the capital city of Hunan Province, boosts the super computer calculation centre. Hunan can take advantage of such computer superiority, combined with artificial intelligency, Metaverse, OpenAI and to build a proper trading platform for China, Thailand and Australia, which can greatly help RCEP countries in a new direction.
As a province in China, Hunan stands to benefit from the various opportunities that RCEP offers, such as:
Newly available access to new markets: RCEP creates a massive market of 2.2 billion people, representing almost a third of the world's population. This offers Hunan Province new opportunities to sell its goods and services to a wider range of customers, potentially boosting its economy.
Increased foreign investment: RCEP is expected to increase foreign investment into China, including Hunan Province. As a result, the province could attract more foreign businesses, which could lead to job creation and economic growth.
Lower tariffs: Under RCEP, member countries will reduce or eliminate tariffs on many goods and services. This means that Hunan Province's exports will become much more competitive in RCEP markets, potentially leading to increased sales and profits.
Improved trade relations: By strengthening economic ties between RCEP members, the agreement could help improve trade relations to link Hunan Province directly with other member countries. This could lead to increased cooperation and mutually beneficial partnerships.
Improved supply chain efficiency: RCEP could help improve supply chain efficiency for Hunan Province's businesses by reducing barriers to trade and harmonizing regulations. This could lead to cost savings and increased competitiveness for businesses operating in the province.
Overall, RCEP has the potential to bring significant benefits to Hunan Province by creating new opportunities for trade, investment, and economic growth.
