China looks to expand exports with new trade agreements
China is looking to expand its global network of free trade areas in 2024, following the country’ success in negotiating free trade agreements (FTAs) over the past year.
Chinese Vice Commerce Minister Wang Shouwen said that China has already signed 22 FTAs with 29 countries or regions, with the combined trade value accounting for one-third of China’s total. Wang said: “We have a full agenda for FTA negotiations this year.”
China is currently in negotiations to upgrade its agreement over the ASEAN Free Trade Area, with Wang said the government was aiming to conclude the talks this year.
The China-ASEAN Free Trade Area was completed in 2010, and since 2013 trade between China and ASEAN has seen an annual growth rate of 8.8%. In 2023, ASEAN was China’s largest trading partner for the fourth straight year, while China held its position as ASEAN’s largest partner for several years.
The two parties announced the official launch of the negotiations to upgrade the free trade area to its third version in November 2022, with the negotiations covering among other things trade in goods, investment, digital and the green economy to create a more comprehensive and mutually beneficial China-ASEAN FTA.
Experts believe that the upcoming version of the China-ASEAN Free Trade Area would also prompt the upgrade of the Regional Comprehensive Economic Partnership (RCEP).
Apart from ASEAN, China also aims to complete the FTA negotiations with Honduras, and the negotiations involving the FTA upgrade with Peru this year. Advancements will be made in negotiations or upgrades of FTAs with the Gulf Cooperation Council, New Zealand, the Republic of Korea and Switzerland, according to the vice minister.
Wang added that China will continue its efforts to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA).
In an attempt to align with the CPTPP rules, China has introduced reform measures to enhance institutional opening-up in Shanghai and other eligible regions. “If the practices yield good outcomes, we will replicate them in other regions of China,” Wang said.
Commenting on the FTA upgrade protocol with Singapore, Yuan Bo, a researcher with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said services and investment are where the growth potentials of the two countries’ future development reside. “These two fields are the common interests of China and Singapore,” Yuan said.
Regarding RCEP cooperation, Yuan believes there is scope for China to collaborate with RCEP members on consumer goods trade, cross-border e-commerce, service trade and investment.
China’s foreign trade value with 14 RCEP members amounted to 12.6 trillion yuan (about £1.4 trillion) in 2023, a 5.3% percent increase compared with 2021’s figure, before the agreement came into force, according to Wang Shouwen.
The pact has allowed Chinese trade companies to enjoy 2.36 billion yuan of tariff concessions for products imported from RCEP countries, while in return they benefited from 4.05 billion yuan of tax breaks for products imported from China in 2023.
“China is both a beneficiary of and a significant contributor to the enforcement of RCEP,” Yuan said.
He added that, in 2024, China will continue to increase the proportion of zero-tariff products, and develop trade rules concerning the digital economy and the green economy, among others.
Services outsourcing sector sees steady growth
China’s services outsourcing industry saw steady growth in 2023, according to data from the Ministry of Commerce. Chinese firms signed services outsourcing contracts worth a total of nearly 2.87 trillion yuan (£321 billion) in 2023, up 17.6% year on year, according to the data.
The value of the contracts hit 1.96 trillion yuan, a year-on-year increase of 18.6%. Of the total, the value of offshore services outsourcing contracts rose 12.9% year on year, reaching nearly 1.49 trillion yuan.