The Regional Comprehensive Economic Partnership agreement (RCEP) came into force on January 1 between six ASEAN member countries (Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam) and four non-ASEAN members, China, Japan, New Zealand and Australia. After the implementation of RCEP, China has reduced import tariffs on about 65% of auto parts, which is good news for auto manufacturers that need to import parts from RCEP member countries and helps them further enhance their international competitiveness.

　　Guangdong is an important automobile production base in China. In recent years, the number and scale of automobile manufacturing enterprises in Guangdong have maintained steady growth. There are more than 870 automobile and parts enterprises above designated size, and their output exceeds 3 million units, forming a diversified industrial development pattern of Japanese, European and Independent brands. Japan is the only RCEP member country that has never signed a free trade agreement with China. Through the signing and implementation of RCEP, China and Japan have reached a tariff concession commitment for the first time, bringing new opportunities to the development of automobile manufacturing and other industries in Guangdong Province.

　　Guangzhou Qisheng Powertrain Co., Ltd. is a subordinate enterprise of Guangzhou Automobile Group, mainly engaged in the manufacture of automobile engines and transmission, and some parts of products are imported from Japan and South Korea. "After the implementation of RCEP, the import of auto engine balance shaft alone will save us about 900,000 yuan in tariffs every year." Xu Jin, customs manager of the company, said happily, "The extra funds saved can be put into r&d and production to further improve the performance and quality of products."

　　"In 2021, China imported more than 115 million yuan of goods from Japan. According to RCEP regulations, the proportion of China's zero-tariff imports from Japan has increased to about 86%. For Japanese companies whose main trading partner is Japan, the tax incentives are relatively large." Guangzhou xiao ITO auto lamp Co., LTD. Customs director Xu Shuyuan said.

　　Tariff reduction is the most direct embodiment of the policy dividend brought by the FTA, and also one of the key concerns of import and export enterprises. After the RCEP agreement came into force, over 90 percent of trade in goods in the region has finally achieved zero tariffs. At the same time, thanks to rules such as origin accumulation, enterprises can obtain the qualification of origin and enjoy preferential tariff with lower threshold.

　　Take Guangzhou, where Japanese auto companies gather, as an example. The output value of auto manufacturing industry accounts for nearly 30% of the city's industrial output value above designated size, and the scale of auto parts industry exceeds RMB 100 billion. It is estimated that the implementation of RCEP in the first year will save more than RMB 60 million in tariff costs for Auto manufacturers in Guangzhou importing parts from Japan. Among them, the import tax rate of 750W dc motor used in automobile manufacturing will be reduced from 12% to 6%, and only this commodity tax reduction will save more than 30 million yuan for relevant import enterprises.

　　Not only the import of auto parts can enjoy RCEP tax reduction, but also a series of auto parts products, such as iron or non-alloy steel hot-rolled coils, engine parts and high-strength bolts, which are used to manufacture auto body parts, can enjoy dividends to varying degrees.

　　"It is estimated that after the implementation of RCEP, our imported aluminized coil steel for car body will enjoy more than 13 million yuan in tax concessions every year, which will significantly reduce operating costs and greatly enhance our competitiveness in the market." Guangzhou Hongzhong Automobile Steel parts Co., LTD., customs clearance department director Wang Yuanhua introduced.

　　Guangzhou JFE steel plate co., Ltd. is a sino-Japanese joint venture that produces and sells high-grade cold rolled, hot dip galvanized steel plate, mainly for domestic brands, Japanese, European and American car galvanized steel plate for manufacturing car shell, with an annual output of more than 2 million tons of steel plate.

　　"Among the products we declared to guangzhou Customs for import in 2020, the value of goods originating in Japan accounted for more than 99 percent of the total value of imports." The company is responsible for customs clearance business Mr Zeng said.

　　Nansha customs officers in-depth enterprise of guangzhou customs detailed RCEP dividend policy: "belongs to base metals and products imported hot-rolled coil, involved in the list of China's tax cuts in Japan id number 23, according to the 2020 guangzhou JFE steel co., LTD., imports of calculation, only in the first years RCEP effect, enterprises can enjoy tariff reductions of about 8 million yuan."

　　It is understood that the implementation of RCEP will further reduce the cost of upstream automotive steel plates, auto parts and important parts, improve the export competitiveness of related products, promote the industrial chain of Guangdong auto manufacturing industry to constantly upgrade to the middle and high-end, and enhance the international competitiveness of products.

　　In order to help relevant enterprises understand and apply RCEP rules of origin, Guangzhou Customs has carried out "online + offline" publicity and training for enterprises in an all-round way, guided relevant enterprises to properly plan import and export goods supply chain and industrial chain, made full use of RECP dividends, and served the high-quality development of local foreign trade.

Article source: General Administration of Customs