Published on : 29/02/2024
Since its proposal in 2013, the Belt and Road Initiative (BRI) has now marked its 10th anniversary. From a blueprint to today's reality, the BRI has manifested into tangible development for various countries and welfare for the people.
This article mainly introduces the relationship between RCEP and the BRI.
RCEP｜Initiated by ASEAN
The English name for the "Regional Comprehensive Economic Partnership" is quite long, thus it is commonly abbreviated as RCEP.
RCEP was initiated by the ASEAN (Association of Southeast Asian Nations) in 2012.
Prior to this, ASEAN had signed "10+1" free trade agreements separately with China, Japan, South Korea, Australia, and New Zealand. The RCEP aims to further integrate regional trade based on these agreements, eliminate tariff barriers, establish a larger free trade area, and promote economic development.
Specifically, once the agreement takes effect, more than 90% of goods trade within the region are tariff-free. The level of openness in services trade and investment is also significantly higher than that of the original "10+1" agreement.
Read more: What is the Belt and Road Initiative?
After lengthy negotiations, signing, and confirmation procedures by various countries, the "10+5" RCEP officially came into effect on January 1, 2022.
The membership includes the rapidly developing ASEAN and China.
At that moment, RCEP has already covered over 2.2 billion population (with over 1.4 billion coming from China), a GDP of 26 trillion US dollars (with China accounting for approximately 18 trillion US dollars), and export total amount of 5.2 trillion US dollars (with China accounting for approximately 3.6 trillion US dollars).
These three figures each account for about 30% of the global total.
Some analysts believe that by 2030, the GDP of relevant countries will account for over 50% of the global total.
Additionally, with the implementation of RCEP, it has now overtaken the EU to become the world's largest free trade economic system and trade area.
Moreover, the economic structures among its member countries are highly complementary, and it has a more comprehensive array of capital, technological, and labour elements within the area.
RCEP｜Focusing on economic and trade cooperation
It's worth noting that RCEP is open to other external economies, and its membership is likely to expand in the future.
For example, Hong Kong is actively seeking to join, hoping to consolidate its status as a trade and investment hub in the region and create more business opportunities through close commercial ties.
When we talk about RCEP, we may also think of the Belt and Road Initiative (BRI) proposed by China, which over 100 countries and regions have participated in, as both "circles of friends" are enormously large.
In fact, RCEP has a very close relationship with the BRI. For example, many members, especially members of RCEP and the "Maritime Silk Road," overlap significantly.
More importantly, RCEP and the BRI complement each other.
RCEP mainly revolves around economic and trade cooperation. Although its content is not as extensive as the "Five Connectivities" framework of the BRI, it nicely fills the gap of "hard constraints" in the regional economic and trade cooperation mechanism of the BRI.
RCEP｜Infrastructure supports trade and investment growth
After the implementation of the strongly binding RCEP, it can also serve as a model for coordinating international rules for all countries and regions involved in the Belt and Road Initiative, strongly supporting and maintaining the multilateral economic and trading systems along the way.
From another perspective, as the BRI promotes connectivity, it can effectively accelerates the implementation of RCEP rules, with facilitating communication channels, cooperation mechanisms, and broadening of the cooperation areas.
And as the BRI continuously boosts infrastructure development in various countries, it lays a solid foundation for the transportation of goods and data transfer within the RCEP region, which is of great help in trade, services, and investment.
Therefore, many analysts believe that RCEP and the BRI will be the "double engines" driving the development of the region and even the world.
Furthermore, the two are mutually reinforcing, maximise the effectiveness of "1+1 > 2".