China-Philippines economic and trade cooperation ushers in a new leap under RCEP

On February 21, the Philippine Senate formally approved the Regional Comprehensive Economic Partnership Agreement (RCEP). Subsequently, the Philippines will submit its approval to the secretariat of the Association of Southeast Asian Nations. RCEP will officially enter into force for the Philippines 60 days after the submission of the approval.

China and the Philippines are close neighbors by a strip of water. In recent years, with the joint efforts of both sides, China-Philippines economic and trade cooperation has achieved fruitful results and fully demonstrated its vitality. Industry analysis believes that under the RCEP framework, China-Philippines economic and trade cooperation will usher in more new opportunities.

Fruitful economic and trade cooperation

In recent years, China Philippines economic and trade cooperation has continued to expand. Despite the adverse impact of the COVID-19 epidemic, China Philippines trade and investment cooperation has continued to grow against the trend.

China has become the largest trading partner of the Philippines for many consecutive years. In 2022, the import and export volume between China and the Philippines will reach US $87.725 billion. The export of Philippine agricultural products to China has increased rapidly. At present, the Philippines has become China's largest source of banana and pineapple imports. Coconut, avocado and frozen fruit have also entered the Chinese market one after another. Fresh durian will soon be exported to China. The Philippines is an important exporter of agricultural products in Southeast Asia. The huge Chinese market is constantly bringing business opportunities to the Philippines, creating employment opportunities and increasing income for local farmers. Philippine enterprises also actively use the platform of China International Import Expo to expand the Chinese market. At the 5th China International Fair, the Philippine booth area increased by 240 square meters compared with the previous one, with 19 new exhibitors.

The investment cooperation between the two sides has flourished, and the investment cooperation between Chinese enterprises in the Philippines has achieved remarkable results. According to the statistics of the Philippines, from 2016 to 2021, Chinese enterprises invested about 2.9 billion US dollars in the Philippines, involving service outsourcing, logistics, agriculture, steel, communications and other fields, showing strong vitality. At the same time, relevant major projects were also successfully implemented. In October last year, the commencement ceremony of the Philippine Sea-crossing Bridge project Davo-Samar Island Bridge, which was contracted by Chinese enterprises, was held in Davo, the third largest city in the Philippines, and is expected to be completed and put into use in 2027. This project is one of the flagship projects of the Philippine government's "build more and build better" plan. After completion, it will further activate the economic resources and tourism potential of Davao and Samar Island, and will create more jobs, help the local post-epidemic recovery and people's livelihood development, and drive the economic growth of southern Philippines.

"Next, the Ministry of Commerce will work with relevant Philippine departments to earnestly implement the important consensus reached by the leaders of the two countries, continue to expand the import of high-quality products from the Philippines, support Chinese enterprises to invest and start business in the Philippines, promote the joint construction of the" the Belt and Road "initiative and the Philippines' plan of" building more and better ", expand new areas of cooperation such as green economy and digital economy, coordinate to promote the construction of" two countries, two parks ", and promote bilateral trade and investment to a new level steps. "The spokesman of the Ministry of Commerce said at the regular press conference held in January this year.

Usher in new opportunities

The mutually beneficial cooperation between China and the Philippines has great potential for development. The interviewed experts believe that RCEP will further stimulate the growth potential of China-Philippines trade and provide new opportunities for China-Philippines to achieve more comprehensive industrial cooperation.

Yuan Bo, deputy director of the Asia Research Institute of the Research Institute of the Ministry of Commerce, said in an interview with the reporter of the International Business Daily that at present, the trade volume between China and the Philippines still has a large gap compared with Vietnam, Malasia, Indonesia, Singapur and other ASEAN members, while the Philippines, with a population of more than 100 million, is the second largest population country in ASEAN, and the two sides still have great development potential in the field of trade.

Yuan Bo further analyzed that, on the one hand, under the RCEP framework, the proportion of zero-tariff goods promised by the Philippines to all countries reached an average of more than 90%, and the highest level of commitment to China reached 91.3%, higher than the level of openness to other non-ASEAN members. Among them, the proportion of products with zero tariff immediately implemented to China reached 80.5%, which is also the highest level of immediate opening to China among all RCEP members. On the other hand, China and the Philippines have achieved zero tariffs on most products under the framework of the China-ASEAN Free Trade Agreement. Under the framework of the RCEP, the two countries have added zero tariffs on some products, for example, the Philippines has further reduced tariffs on some pharmaceutical products, plastics and products, vulcanized rubber, steel products, etc., and China has further reduced tariffs on canned pineapple, pineapple juice, coconut juice, pepper, etc., which will promote the growth of bilateral trade in goods.

"Especially in the field of cross-border e-commerce, due to the large population of the Philippines, private consumption is relatively strong, and China is also the second largest consumer market in the world, and the future cooperation space between the two countries in this field is also very broad." Yuan Bo said.

It is understood that in January this year, China and the Philippines signed a memorandum of understanding on e-commerce cooperation. According to the memorandum, the two sides will establish an e-commerce cooperation mechanism, carry out policy communication, share best practices and innovative experience, promote high-quality product trade through e-commerce, and strengthen cooperation among enterprises, local governments and think tanks.

From the perspective of industrial cooperation, Yuan Bo said that RCEP would provide new opportunities for China and the Philippines to achieve more comprehensive industrial cooperation. The Philippines not only has rich labor resources with high education, but also has agricultural and forestry resources, energy and mineral resources needed for the development of manufacturing industry. It also has a certain development foundation in processing and manufacturing industry, electronic information and other industries. The effective implementation of RCEP will bring new opportunities for the Philippines to develop domestic industries and integrate into regional and global industrial chains. It will also promote its domestic reform and optimize the business environment, which will also provide new development opportunities for the cooperation between China and the Philippines in agriculture, manufacturing, energy and other related industries.

"At present, the Philippine government has also put forward the plan of 'building more and building better'. In the future, the two sides also have great potential for cooperation in infrastructure and other contracted projects. In addition, the service industry in the Philippines is relatively developed. In many fields such as logistics, finance, tourism, education, telecommunications, service outsourcing, digital services, the Philippines and China also have a lot of room to further deepen cooperation." Yuan Bo said.

"The economy and trade between China and the Philippines are highly complementary, and the Philippines' accession to RCEP will promote more new opportunities and promising prospects for China-Philippines cooperation in the field of economy and trade." Xu Ningning, Executive Chairman of the China-ASEAN Business Council and Chairman of the RCEP Industrial Cooperation Committee, further told the International Business News that the members of RCEP have strong industrial complementarity, close trade and investment relations, and broad cooperation space and great potential. The market opening implemented by RCEP has also created favorable conditions for China and the Philippines and other relevant countries to enhance supply chain industrial chain cooperation.

Xu Ningning also suggested that China and the Philippines benefit from regional economic integration and need political and commercial communication between both sides to promote development through cooperation and mutual assistance; Both sides need to promote the communication of industrial planning and policies in a pragmatic manner, and find the focus of economic and trade cooperation; It needs the business community to actively cooperate with each other, seize a large number of new business opportunities brought by the construction of RCEP, the world's largest free trade zone, and share the achievements of regional economic integration; It is necessary for the two peoples to connect and consolidate the foundation of good-neighborly friendship and economic cooperation between the two countries.