Bright prospects

Signed by 15 Asia-Pacific economies in November 2020, the RCEP agreement has created the world's largest free trade area, covering one-third of both the global population and global gross domestic product.

It is widely expected that the RCEP pact, together with Hainan's free trade policies, will stimulate more dividends, ensuring bright prospects for traders and investors in Hainan, according to experts and officials at a recent forum held in Haikou, the provincial capital.

They said they believe that, backed by these policies and the province's unique location, the Hainan Free Trade Port is likely to become a trade hub linking the Chinese market with the RCEP region and the world market as a whole.

Wang Bin, head of the Publicity Department of the Communist Party of China's Hainan Provincial Committee, said the province will seize the opportunities presented by the RCEP's implementation to better engage in China's dual-circulation development－in which the domestic market is the mainstay and the domestic and foreign markets reinforce each other－and to improve resource allocation and enhance opening-up.

The Hainan provincial government issued an action plan in January to help domestic and foreign enterprises alike benefit more from the opportunities and better deal with the challenges brought by the RCEP, according to the provincial department of commerce.

The action plan proposed 20 major measures, such as expanding the scale of trade in goods, innovating the development of trade in services, promoting two-way investment and cross-border industrial chain cooperation, deepening regional integration and connectivity, promoting institutional innovation and optimizing the business environment.

The overseas development of Hainan companies in recent years has shown that Hainan has the foundation for and advantages in deepening collaboration with RCEP member countries, and there is ample room for two-way investment, experts said.

Dong Guoqiang, deputy general manager of Hainan Haima Automobile Co, said: "Enforcement of the RCEP pact will reduce the tariff on auto parts. Hainan's unique location and the advantages of the Hainan FTP policies will remarkably reduce costs for Haima in the purchase, production and circulation of auto parts in the RCEP region."

Haima's export volume to the Southeast Asian market reached 600 million yuan in 2021, a year-on-year increase of 20 percent, and the company will use the opportunity to further expand the Southeast Asian market, Dong said.

Hainan is working on three lists－a list of goods for import with RCEP advantages, a list of goods for export with Hainan advantages and a list of reduced-tax commodities of advantageous Hainan industries－in a bid to help local companies more conveniently and efficiently enjoy RCEP tax policy dividends, said provincial government officials. This will also make RCEP dividends a driving force in developing the Hainan Free Trade Port, they said.

"Sharing geographical proximity and cultural affinity with ASEAN countries, the Hainan Free Trade Port is favorably positioned to be an important hub of China-ASEAN comprehensive strategic cooperation," said Chi Fulin, president of the China (Hainan) Institute for Reform and Development and head of the Hainan Institute for Free Trade Port Studies, at the RCEP Media& Think Tank Forum in Haikou in May.

The free trade port's "implementation of the highest level of opening-up policies has made it easier for foreign market players to enter the super-scale market of the Chinese mainland", Chi added.

Ky Sereyvath, director-general of the Institute of China Studies at the Royal Academy of Cambodia, said that the RCEP agreement will serve as a catalyst for regional and global economic growth and that all participating countries will see benefits at different levels.

Cheng Yu contributed to this story.