How Will RCEP Promote Worldwide Economic Development?
Recently, the RCEP officially came into force, marking the launch of the free trade area (FTA) with the largest population, largest economic scale, most diverse membership structure, and the greatest development potential in the world.
What is RCEP?
The RCEP is the short name for Regional Comprehensive Economic Partnership, which aims to reduce tariff and non-tariff barriers, implement regional economic integration and establish a unified free market trade agreement through member countries open their markets. The agreement was initiated in 2012 by the ten ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam), and officially signed on by video on November 15, 2020. Member countries include ten ASEAN countries, China, Japan, South Korea, Australia, and New Zealand.
In terms of population, economic size, and trade volume, the population of RCEP member states covers 2.2 billion people, accounting for about 30% of the world's total population. The total GDP reaches $25.6 trillion, accounting for 29.3% of the global economy, and the regional trade volume reached $10.4 trillion, accounting for 27.4% of global trade. Therefore, the RCEP is regarded as the world's largest free trade agreement.
How will RCEP promote worldwide economic development?
The trade and investment liberalization and facilitation measures and unified economic and trade rules inside the RCEP agreement will significantly reduce the operating costs and operation uncertain risks. It will provide institutional support for stabilizing regional industrial and supply chains, accelerate the flows of goods, technologies, services, and capital, and create trade-generating effects.
Boost market confidence, promote after-epidemic global economic recovery
Affected by the pandemic, the global economy, international trade, investment, and consumption were dramatically reduced. Against the backdrop, the implementation of the RCEP can ease many risks and uncertainties during the regional economic recovery, boost market confidence and inject new impetus to economic recovery and long-term prosperity in the region and the world.
RCEP will also improve regional trade and investment growth, which is good to improve global trade and welfare growth. In addition, above 90% commodity trade will achieve tariff-free among the region, and complement existing bilateral free trade agreements. It will further enhance the overall level of liberalization in the region, significantly lower the cost of intra-regional trade, and significantly boost trade.
It is estimated that the RCEP will increase the regional real GDP, export, and import volume by 0.86%, 18.30%, and 9.63% respectively by 2035. The regional economic health will cumulatively increase by $250.3 billion, and the global real GDP and import and export trade will increase by 0.12% and 2.91% respectively, and economic welfare will increase by us $169.6 billion.
Overcome anti-globalization and embrace a new wave of globalization
RCEP is a large-scale regional trade agreement launched with the joint efforts of ASEAN and free trade partners including China and Japan. It is the largest free trade area covering the world's largest population and economic scale. In 2020, RCEP member countries had a total population of 2.27 billion, a GDP of 26 trillion US dollars, and a total import and export volume of over 10 trillion US dollars, accounting for about 30% of the global total and higher than existing regional trade blocs.
By lowering or removing market access barriers among regional member states, RCEP will intensify the economic connection and communication, and create an open and prosperous regional integrated market covering 15 countries. It will significantly make a great contribution to the growth of trade and investment, economic recovery, and regional prosperity. Besides, it will facilitate a big market among China, Japan, and South Korea, bring considerable dividends and become a new impetus source to promote the growth of trade and investment among the three countries and the region.
s the member states have different political and social systems and economic development levels, RCEP owns the most diverse membership structure. Among them, there contain developed countries like Japan, Singapore, etc, and emerging markets like China, Thailand, etc, which makes the economic industrial structure with stronger diversity and complementarity. The liberalization and facilitation measures and unified rules of the economic and trade agreement of the RCEP will help to form a new trade and investment increment, further stimulate the regional market potential, create more consumer demand and drive faster economic growth of all countries.
Stabilize expectations and ensure global supply chain security
The epidemic made a strong hit on global production and demand, resulting in the disruption or stagnation of supply chains in many industries. As a modern, comprehensive, high-quality, and mutually beneficial free trade agreement, the RCEP can stable the regional industrial and supply chains with institution guarantee, alleviate risks and uncertainties faced by enterprises in overseas investment and cooperation, stabilize expectations, and promote deeper integration of industrial and supply chains among members.
The RCEP adopts cumulative rule-of-origin in trade in goods, which will make the trade relationship of the RCEP member states closer and drive regional industrial and supply chains more resilient. The tariff preference will promote procurement, production, and sales activities among the region, deepen regional industrial and supply chains cooperation and strengthen trade relations among RCEP members. In addition, the free trade platform allows member enterprises to purchase original material and intermediate products, arrange production division, and export according to the principle of resource optimal allocation. It can build a closer, stable, and more resilient regional industrial chain.
The valid of the RCEP lays a solid foundation for the implementation of mobile payment global connectivity, which will accelerate the development of mobile payment and promote the process of a cashless society in all countries.
It is understood that the scale of the global mobile payment market will soar from $1,139 billion in 2019 to $4,690 billion in 2025, with an average annual growth of 27%. The debit and credit cardholders in the Philippines will grow by 5.8 percent, while Indonesia will grow by 5.5 percent between 2020 and 2024. The rise of credit cardholders in emerging markets indicates that people are embracing contactless payments nowadays. The transition from cash, credit card to the mobile wallet will make people further enjoy the convenience of mobile payment and form contactless payment habits.
In addition, mobile payment greatly attracted people’s attention with its contactless, convenient, and efficient features affected by the pandemic. It has a certain market demand as it can provide easy-to-use operation and hygienic service. Besides, the continuous development of the biometrics and 5G speed up the application and popularization of mobile payment. The market demand and technical support will undoubtedly stimulate the huge market potential.
For merchants, the payment terminal helps them to complete mobile payment, while consumers believe it is the entrance to the mobile consumption scene. Under such circumstances, companies that can provide complete mobile payment solutions will dominate the payment market in advance.
As the best-in-class smart terminal and solution provider, and the one to launch the first face payment terminal in China, Telpo rolled out a series of payment terminals and solutions, which was reported by Nielsen many times. From financial payment, mobile payment, QR code payment, face payment to fiscal registration, you can get relative payment terminals and solutions from Telpo.
Most importantly, Telpo products comply with the GDPR compliant framework, thus individual information privacy can be properly protected. That means we can provide convenient services as well as protect user privacy and information, dispel the concerns of the government and users.
It will deepen the connection and connectivity among countries, expand investment and trade opportunities, and economic development. If you want to know more details, welcome to contact us.