RCEP Helps China Philippines Coconut Industry Cooperation Bloom and Fruits

The ASEAN Secretariat, the custodian of the Regional Comprehensive Economic Partnership Agreement (RCEP), has recently issued a notice that the الفلبين has officially deposited its approval letter with the ASEAN Secretary General. According to the agreement, RCEP will officially enter into force for the Philippines from June 2, 2023. In order to strictly fulfill the commitments of the agreement and actively promote the full implementation of RCEP, the State Council Tariff Commission has issued a notice that starting from June 2, 2023, the applicable treaty tax rates of RCEP ASEAN member countries will be applied to some imported goods originating in the Philippines, and the subsequent annual tax rates will be implemented from January 1 of that year. After the RCEP came into effect for the Philippines, all 15 members completed the entry into force process and implemented tariff concessions with each other, entering a new stage of comprehensive implementation of the agreement.

The approval of RCEP by the Philippines has brought joy to the domestic coconut market and coconut product enthusiasts. In recent years, coconut consumption, represented by coconut beverages, has been increasing year by year in China. Driven by tea brands such as Xicha and Ruixing, coconut drinks wear the laurel of health and trend in the beverage industry, and are driving the size of the coconut market to climb year by year. According to data, the size of China's coconut market reached 5.428 billion yuan in 2022.

According to the "2023-2029 China Coconut Industry Development Status Analysis and Prospects Strategic Analysis Report" released by Zhiyan Consulting, China's coconut industry is mainly distributed in provinces and regions such as Hainan, Yunnan, Guangdong, Guangxi, Fujian, Taiwan, etc. Among them, Hainan Province accounts for about 99% of the country's planting area, and is also the only region in China to carry out commercial coconut planting. The limited production of coconut in China makes it difficult to meet the growing demand for coconut in the food market. Moreover, the development of China's coconut planting industry and processing industry is not coordinated, with a large gap in raw material supply. The coconut industry has a single product structure, low added value, and severe homogenization, which has caused significant obstacles to the development of the coconut industry. At present, China's coconut raw materials mainly rely on imports, with most of the coconut raw materials from enterprises such as coconut trees, Chunguang, and Nanguo coming from imports. Some foreign coconut export enterprises, in order to support the development of their own coconut industry and restrict exports, undoubtedly have a significant impact on the Chinese market.

For a long time, due to various reasons, China's main destination countries for importing green coconuts and coconut products have been إندونيسيا, ماليزيا، فيتنام. More than 1/4 of the land in the Philippines is used to grow coconuts. In 2019, Philippine coconut was approved to be exported to China, and its green coconut, coconut water, coconut milk, coconut oil, coconut sugar and other products were able to enter the Chinese market. In 2020, the Philippines has become China's second largest coconut supplier. Approximately 43000 tons of coconut products are exported to China annually, accounting for 27% of the Chinese coconut market share.

Since the entry of Filipino coconuts into China, the development of the industry in the Philippines has greatly accelerated, with an average annual growth rate of over double digits and even nearly 60% growth last year. The industry's annual revenue is nearly 2 billion US dollars.

Qu Qiang, a researcher at the Beijing International Economic and Trade Association, stated in an interview with China Trade News that with the implementation of relevant trade agreements, the Philippine coconut industry facing China will achieve faster development, benefiting local farmers and enterprises. "It can be said that joining the RCEP has laid the foundation for the Philippines' agricultural industry represented by the coconut industry to take off in the Chinese market. The coconut industry is just one of the many highlights of the cooperation under the framework of the China Philippines RCEP, which is conducive to letting all sectors of the Philippines realize that joining the regional trade family and participating in the the Belt and Road cooperation can bring good benefits to the country, and also can set a good example for more China Philippines economic and trade partners in the future, opening up International gateway

In the agricultural economic and trade cooperation between China and the Philippines, some related risks cannot be ignored. Qu Qiang specifically pointed out that from a macro perspective, the global economic downturn, continuous international political and economic frictions, and the rise of trade protectionism have all brought enormous uncertainty to regional economic and trade. The coconut industry is a long-term agricultural industry, and it takes seven to eight years for coconut trees to bear fruit. During the seven or eight years, there may be many uncertainties such as natural disasters, business cycle fluctuations and so on. Once prices fluctuate and farmers or traders suffer economic losses, they often magnify economic issues into international relations issues. This requires enterprises to use government policies, international laws, financial insurance and other tools to smooth the cycle and prevent risks. In addition, it is also necessary to prevent third countries outside the region from disrupting normal economic and trade cooperation between the two countries for political purposes.

From a micro perspective, the industrialization level of Philippine coconut still needs to be improved. The small farmer economy coexists with the industrial economy, with low market integration and imperfect channels. Currently, it mainly relies on local large exporters to import in bulk. Qu Qiang believes that with the deepening of cooperation between China and the Philippines in the future, Chinese enterprises will directly connect with local producers, and customized production is also an inevitable trend. However, long-term exploration, learning, and adjustment are needed in various aspects such as quality control, pricing, acquisition, transportation, exchange rate and futures hedging, laws and regulations, folk customs, and social security.