- Provisions in China’s Free Trade Agreements (FTAs) differ vastly from each other, depending on partner country and time of signing.
- China’s FTAs with developed countries contain stronger rules on IPR, SOEs and competition, whereas China’s FTAs with developing countries include weaker rules, especially on trade restrictions.
- Besides China, RCEP includes ASEAN, Japan, South Korea, Australia, and New Zealand, making it the world’s largest trade agreement, covering ca. 30% of global GDP.
- RCEP sets more advanced standards than many Chinese FTAs with developing countries, as it includes significant provisions on Services, Investments, and Competition.
- But RCEP is less comprehensive than China’s previous FTAs with developed countries: no stipulations on subsidies, SOEs or ESG standards (labor and environment) even though environmental provisions have generally become part of China’s FTA strategy.
- Foreign companies with supply chains located in RCEP will benefit from harmonization of product origin rules and improved trade facilitation.
- However, European companies are also likely to face increased competitive pressure from Chinese companies moving forcefully into RCEP markets.
Sinolytics is a European consulting and analysis company that focuses entirely on China. It advises European companies on their strategic orientation and concrete business activities in China.