Recently, the Regional Comprehensive Economic Partnership (RCEP) came into effect in Malaysia. Zhongguancun Customs, a subordinate customs district of Beijing Customs District, issued RCEP Certificate of Origin for 24 trucks to be exported by Foton International Trade Co., Ltd. Beijing, which is the first RCEP Certificate of Origin Beijing has issued to Malaysia.
On January 1, 2022, RCEP, the world's largest free trade agreement, officially came into force. With its implementation, over 90 percent of goods traded in the region will enjoy zero tariffs in a phased manner. A series of tangible benefits including tariff reduction, trade facilitation and free flow of production factors will enable foreign trade enterprises in Beijing to navigate international markets with greater confidence and embrace opportunities brought by the new round of opening-up.
It's reported that now the RCEP free trade deal is effective for 12 of its 15 signatories. Given that China is Malaysia's largest trading partner, the implementation of RCEP will unleash greater potential of trade between the two countries.
According to import requirements of Malaysia, the tariff rate of trucks exported by Foton is as high as 30%. But the rate has been slashed to 5% after Foton received Certificate of Origin from China's Customs, saving an average of nearly 40,000 yuan in tariffs for every truck. As a result, the company has become much more competitive. After RCEP took effect, the tariff rate of trucks will be lowered on an annual basis and eventually eliminated, which will help Chinese enterprises as they explore the Southeast Asian market.
Ma Rentao, Vice President of Foton Motor Group said, "Foton is expected to export over 1,000 trucks to Malaysia in 2022. With the implementation of RCEP, we will provide local customers with better logistics solutions and reduce costs at the same time."
According to Gao Jing, Deputy Commissioner of Zhongguancun Customs, Malaysia will eliminate tariffs on 90.5 percent of Chinese products in a phased manner. Zero tariffs have been applied to 74.9 percent of Chinese products, including food like sugar and cocoa products, textile raw materials, and drugs, as soon as the FTA took effect.
(Reporter: Yuan Lu)
