The Entry Into Force Of RCEP Is Of Great Significance To China'S Textile Foreign Trade

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It is of great significance to China's textile trade

Textile industry is related to the national economy and people's livelihood. It is a pillar industry with traditional advantages in China. It is also one of the industries with the most complete industrial chain and the strongest international competitiveness. Over the past 40 years of reform and opening up, especially the 20 years since China's accession to the WTO, China's textile and clothing industry has developed steadily, the industry scale has been expanding, and the international competitiveness has been continuously improved. The textile and garment export has increased from 52.7 billion US dollars in 2001 to 296.2 billion US dollars in 2020, with a cumulative growth of 4.6 times. The number of textile and garment export enterprises has increased from 30000 in 2001 to 110000 in 2019. A number of leading enterprises, "invisible champions" and foreign trade bases have sprung up, forming an ecosystem in which a large number of small and medium-sized enterprises participate and become the stabilizer of the supply chain of China's textile and garment industry chain. Based on the continuous consolidation of the industrial foundation, the continuous enhancement of the industry toughness, the gradual improvement of innovation ability, and the acceleration of transformation and upgrading, China has continuously integrated into and led the adjustment of global textile and garment supply chain, industrial chain and value chain, and strived forward in the direction of high-quality development.

Since 2021, in the face of multiple adverse factors, China's textile and clothing foreign trade industry has actively played the advantages of stable and strong supply chain industry chain, and the export reached a record high in the same period, showing a stable and positive situation. With the growth of trade scale, the industry is facing more and more risks and challenges, especially the increasingly complex international trade environment, the aggravation of foreign trade protectionism and many uncertain factors in export. At this time, the entry into force of RCEP is undoubtedly a booster of free trade and a timely rain of regional cooperation, which will release many dividends of international trade and investment policies, and bring great benefits to the international development of China's textile and garment industry and the consolidation and integration of global textile and clothing supply chain.

RCEP is the largest free trade zone in the world. The establishment of RCEP free trade zone means that about 1 / 3 of the global economic volume will be built into an integrated giant market, which will promote the free flow of economic factors in the region, strengthen the division of production and cooperation among members, promote the expansion and upgrading of the regional consumption market, and promote the further development of the regional industrial chain supply chain.

In recent years, with the deepening of production capacity cooperation between China and neighboring countries, especially ASEAN countries, RCEP members have formed a regional industrial cooperation mode with obvious advantages centering on China. On the one hand, with its strong comprehensive competitive strength and stable and complete industrial chain advantages, China has maintained a textile and garment direct export of nearly 300 billion US dollars; On the other hand, Chinese enterprises take advantage of ASEAN's low-cost and labor resource advantages to strengthen international production capacity cooperation, which has made important contributions to the promotion of textile and clothing export, employment and economic growth of ASEAN countries. At the same time, it has also led to the export growth of China's yarn, fabric and other intermediate products to ASEAN, and the regional textile and clothing trade liquidity The degree of activity and interdependence increased significantly, which led to the rise of Asian supply chain with China as the center.

The signing of RCEP is the most important achievement of East Asian economic integration in the past 20 years, and will have a positive and far-reaching impact on the textile and garment trade and industrial chain pattern between China and Asian countries.

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What are the opportunities for China's textile industry

RCEP has integrated and expanded the "10 + 1" free trade agreements between ASEAN and China, Japan, South Korea and other member countries. Through the rules of origin, tariff reduction, positive and negative lists and other measures, RCEP has made high-level opening commitments, providing China's textile and garment enterprises with the expansion of intra regional trade scale, optimization of resource allocation, integration and strengthening of supply chain, integration and strengthening of supply chain It is a great opportunity to upgrade the value chain. The establishment of RCEP free trade zone will provide a great help to the formation of a new development pattern of China's textile and garment industry, which takes the domestic big cycle as the main body and the domestic and international double circulation promotes each other in the new period.

From the perspective of global textile and clothing trade pattern, RCEP region is undoubtedly the most important textile and garment manufacturing center in the world, and also has the largest global growth potential and a huge rising consumer market.

On the supply side, China, ASEAN, South Korea, Japan and other countries are the world's important textile and clothing manufacturing and R & D design centers. In 2020, the textile export volume of 15 member countries will reach 187.8 billion US dollars, accounting for 39% of the global textile export trade, and the clothing export volume will reach 2088 billion US dollars, accounting for 29.6% of the global clothing export trade.

On the demand side, Japan, South Korea, Australia and other countries are the world's important traditional textile and clothing import markets. China's super large-scale consumer market import demand continues to grow. As a rapidly developing clothing manufacturing base, ASEAN's import scale of textile intermediate products is also extremely large. In 2020, the textile import volume of 15 member countries will reach 71.84 billion US dollars, accounting for 12.3% of the global textile import trade, and the clothing import volume will be 61.39 billion US dollars, accounting for 7.2% of the global clothing import trade. According to the estimate of McKinsey fashion research center, in recent years, the proportion of Asia Pacific market in global clothing and footwear consumption has been increasing, nearly half. Based on Japan, Korea, Australia and New Zealand and China as the growth engine, RCEP regional market is becoming more and more important in the global fashion industry.

RCEP member countries are also important trade partners in the field of textile and clothing. In 2020, China's textile and garment exports to 14 RCEP member countries are US $78 billion, accounting for 26.4% of China's total textile and garment exports, and US $10.4 billion of textile and clothing imports from RCEP member countries, accounting for 44.1% of China's total textile and clothing imports. In the first 11 months of 2021, China exported 79.73 billion US dollars of textile and clothing to 14 RCEP member countries, accounting for 27.3% of China's total textile and clothing exports, and 10.98 billion US dollars of textile and clothing imports from RCEP members, accounting for 42.3% of China's total textile and clothing imports. Among RCEP members, ten ASEAN countries are China's third largest textile and garment export market, the largest textile export market and the largest textile and clothing import source, while Japan is China's fourth largest textile and clothing export market and the third largest textile and clothing import source.

After the implementation of RCEP, the trade and investment between China and RCEP members are expected to further increase thanks to the gradual cancellation of tariffs and the facilitation measures of trade and investment policies. The status of RCEP regional supply chain in the global textile and clothing trade pattern will be further consolidated and enhanced.

- trade level: exports to Japan will be significantly better

One is to expand the scope of tariff concessions in the original FTA.

China has reached bilateral free trade agreements with ASEAN, South Korea, Australia and New Zealand respectively. Most textile and clothing exports of China to other RCEP member countries except Japan have already enjoyed the preferential tariff reduction. After the implementation of RCEP, some textile and clothing products, including some clothing and bed fabrics exported to Indonesia, some chemical fibers and fabrics exported to the Philippines, clothing and textiles, and some cotton yarn, fabric and chemical fiber products exported to Malaysia, will enjoy tariff reductions beyond the original FTA.

Second, it will help to stabilize China's market share in Japan.

RCEP is the first free trade agreement between China and Japan. After the implementation of RCEP, the most direct and significant benefit is China's textile and clothing exports to Japan. In recent ten years, due to the influence of order transfer, cost competition, tariff preference, procurement strategy and other factors, China's textile and clothing market share in Japan has decreased from about 80% in 2010 to 59% in 2020. China's reduced share is mainly filled by low-cost countries such as ASEAN and Bangladesh. In 2020, China's textile and clothing exports to Japan amounted to 21.9 billion US dollars, accounting for 7.4% of China's total textile and clothing exports. In the first 11 months of 2021, China's textile and clothing exports to Japan amounted to 18.87 billion US dollars, accounting for 6.5% of China's total textile and clothing exports. After RCEP comes into effect, Japan will eventually realize zero tariff on most of China's textile and garment products within 15 years, which will build a positive and predictable policy environment for the long-term development of China Japan Textile and garment trade, stabilize the long-term commitment of Chinese and Japanese enterprises to mutual cooperation, and stabilize China's market share in Japan, It is of great significance to the long-term development and stability of China Japan bilateral textile and garment trade cooperation.

Japan's weighted average tariff on textiles and clothing is 5.2% and 9.3% respectively. Under RCEP, Japan's average annual tariff reduction rate for China's textile and clothing products is 0.5% ~ 0.8%. It is estimated that in the first year after RCEP implementation, China's clothing export tariff to Japan can be reduced by 83 million to 125 million US dollars, and then increased every year until zero customs duty is realized, and the annual tariff reduction rate of China's clothing exports to Japan is about 1.25 billion US dollars. In other words, if an enterprise exports 1 million US dollars of clothing to Japan, in the first year of RCEP implementation, it can enjoy a tariff reduction of about 50000 yuan; Export of US $1 million can enjoy a tariff reduction of about 600000 yuan.

- investment level: regional resources will be optimally allocated

First, RCEP unified, concise and clear rules of origin will be conducive to the optimal allocation of regional resources.

The textile and garment industry has a long industrial chain, involving a large number of links from fiber planting or manufacturing - spinning - weaving - dyeing and finishing - garment manufacturing. For a long time, affected by labor cost and supply, trade preferential arrangement, cotton quota, procurement strategy and other factors, China and ASEAN countries have formed a supply chain layout and trade investment mode of competition and cooperation. Rules of origin play a very significant role in guiding the trade, investment and supply chain layout of Chinese textile and garment enterprises in ASEAN. Since the implementation of bilateral free trade agreements between RCEP countries is very complicated, in order to judge the impact of RCEP rules of origin on China's textile and clothing trade and investment, it is necessary to understand not only the RCEP rules itself, but also the rules of other existing relevant free trade agreements, such as China South Korea, ASEAN Japan and Vietnam Japan free trade agreements, In order to select the most favorable rules and standards for enterprises, so as to make trade and investment decisions.

In RCEP rules of origin, the rules on textile and clothing products are relatively loose, especially for knitted and woven clothing products with large trade volume and more sensitive, and the judgment standard is "chapter change" without any additional conditions, that is, if all non originating materials used in the production of goods have changed at the first two digit level of the harmonized system, It is deemed to be of origin. The rules of origin of the corresponding products in the ASEAN Japan FTA attach some specific conditions. When ASEAN exports clothing products to Japan, some specific fabrics (especially knitted fabrics) must be produced in the free trade zone before they can enjoy tax-free treatment. This is why many Chinese enterprises must invest in the production of fabrics while investing in garment manufacturing in ASEAN countries, because only in this way can they be regarded as originating from ASEAN and enjoy tariff-free treatment from Japan (the least developed countries such as Cambodia and Myanmar are not subject to this restriction). After the implementation of RCEP, ASEAN countries import fabrics from China, process them into garments in ASEAN, and then export them to Japan, which are regarded as originating in RCEP region, so they can enjoy tax-free treatment without exception.

Therefore, after the implementation of RCEP, products that were originally subject to the rules of origin of ASEAN Japan and Vietnam Japan free trade agreements and had to be produced locally in ASEAN, or could not enjoy tariff-free treatment due to ASEAN's inability to produce, will be able to enjoy Japan's tariff-free treatment, which will help ASEAN countries to make full use of Chinese yarn The production advantages of fabrics and other intermediate products expand the export to Japan, which also benefits the export of China's intermediate products to ASEAN countries, and ultimately realizes the optimal allocation of resources in the production chain.

Second, the implementation of RCEP will help to slow down the transfer of China's textile and garment industry chain, and build a China Centered Asian textile and clothing supply chain and a unified big market.

The implementation of RCEP will help China and ASEAN, the two most important textile and garment production centers in the world, to realize the integration and further integration of production. Especially in the export trade to Japan, there is no need for unnecessary waste of resources and inefficient allocation in order to avoid the restrictions of rules of origin, so as to give full play to China's textile and clothing industry In particular, the advantage of high-end manufacturing of intermediate products can slow down the transfer of the whole industrial chain and maintain China's central position in the global supply chain, so as to maintain and greatly enhance the global competitiveness of China's textile and garment industries and excellent enterprises, and promote more powerful Chinese enterprises to "go out" through regional economic integration.

- industry level:

Trade, investment and industrial synergy will be significantly enhanced

The unified and transparent investment environment created by RCEP will help to enhance the trade, investment and industrial cooperation between China's textile and garment industry and RECP countries. RCEP can reduce trade and investment barriers and create a unified big market, which is conducive to China's textile and garment enterprises to optimize the allocation of resources in the region and realize the international layout. Through strengthening industrial division and cooperation among member partners, we can realize complementary advantages, promote the formation of a more reasonable regional industrial chain, supply chain and value chain closed-loop, which can benefit all parties in the region, and improve the status of RCEP members in the global textile and clothing industry competition pattern.

In terms of product design and development, international marketing network, brand going abroad and cross-border e-commerce, Chinese textile and garment enterprises will have the opportunity to give full play to their own advantages, fully explore the potential of regional market, especially the Southeast Asian market with large population and rapid growth, so as to realize the promotion of value chain. In recent years, China's well-known clothing brands have been optimistic about the regional market potential of RCEP, speeding up the overseas layout, such as Anta opened flagship stores in Vietnam, Malaysia, the Philippines and other countries; Lily has set up 70 retail stores in 11 countries such as Thailand and Singapore; Hailan house has set up 29 stores in Malaysia, Thailand, Singapore, Vietnam, Japan and other countries; SEMA has developed lazada platform and opened physical stores in Indonesia and Laos. In the future, with the help of the unified regional platform provided by RCEP, China's textile and garment industry will gradually realize the high-quality development and leap from "RCEP manufacturing" to "RCEP consumption" to "RCEP brand".

How should Chinese textile enterprises grasp the opportunity

RCEP will deepen the integration and layout of China's textile and garment industry chain, and provide significant development opportunities for China's textile and garment export enterprises. It is suggested that enterprises should consider the following aspects to maximize the use of RCEP agreement:

First, we should carefully study, understand and use the tariff schedule. Combined with the tariff concession arrangement of RCEP, on the one hand, the import and export trade of related products will be expanded orderly by referring to the schedule of reduction; on the other hand, according to the characteristics of different tariff concession ranges of RCEP member countries, a fine and perfect division of labor system will be established in the region, so as to make full use of the rules of origin of RCEP region to obtain the maximum tariff preference. When multiple FTAs origin standards are applied at the same time, enterprises can comprehensively evaluate the range of tax reduction products, the degree of leniency and strictness of rules, the range of tariff reduction, and the convenience of operation procedures, so as to select the most suitable rules of origin for their own needs, so as to reduce the cost of final products.

Second, we should pay attention to the analysis and judgment of RCEP agreement rules, and optimize the regional industrial chain and supply chain arrangement. In the process of international production capacity cooperation and investment layout, it is necessary to fully evaluate the relevant rules of origin and investment of RCEP and other bilateral free trade agreements in the region, select the best and use them, and adjust and layout the industrial chain and value chain in terms of production costs, raw materials, upstream and downstream industries and markets.

Third, pay attention to and study the rules of customs procedures, inspection and quarantine, and technical standards of RCEP member states. Evaluate the existing import and export links and logistics arrangements, optimize the declaration mode, shorten the trade time, simplify the trade process, and fully reduce the trade cost.

Fourth, actively apply for the facilitation measures and preferential policies adopted by RCEP member states for enterprises, and make good use of the preferential rules closely related to enterprise operation and management and trade and investment, such as trade facilitation, natural person flow and investment.

We have reason to believe that under the strong support of RCEP, the internationalization level and global layout of China's textile and garment enterprises will be effectively improved, and the long-term development of China's textile and garment industry will be expected in the future.