On March 22, the head of the International Department of the Ministry of Commerce stated that China has now completed the approval of the Regional Comprehensive Economic Partnership Agreement, which is the RCEP Agreement, and has become the first country to ratify the agreement. All other member states of RCEP also expressed that they will work hard to promote the formal entry into force of the agreement on January 1 next year. After the agreement takes effect, more than 90% of the goods trade in the region will eventually achieve zero tariffs, which can be divided into immediate reduction to zero tariffs and reduction to zero tariffs within ten years.
RCEP is a super free trade zone leading the world in various indicators. The 15 member states have a total population of 2.27 billion, a GDP of 26 trillion US dollars, and a total export value of 5.2 trillion US dollars, each accounting for about 30% of the global total. Someone suggested that the signing of this agreement is as significant as China's entry into the WTO.
All members of the RCEP agreement promised to lower tariffs, open markets, and reduce standard barriers, which strongly supported free trade and the multilateral trading system, helped to form positive expectations for the global economy, and stimulated the recovery of the global economy after the epidemic. The tariff reduction schedule proposed by China on November 15, 2020 consists of five parts, which are for the ten ASEAN countries, Australia, Japan, South Korea, and New Zealand to adopt different tariff reduction plans, which are mainly divided into one-off reduction to zero. Tariffs, tiered reductions to zero tariffs, and maintenance of existing tax rates, and other tax reduction programs at different levels. It is worth noting that the tariff reduction table proposed this time covers saw Blades, super-hard material tools, industrial diamonds, natural and man-made diamonds, saw blades, silicon carbide, boron carbide, brown corundum, natural corundum sand, emery cloth, sandpaper, Whetstone, grinder and other super hard materials, abrasive products.
According to the agreement, China will reduce tariffs to 0, 5%, and 0 tariffs in a one-off manner on some superhard materials and abrasive products from the ten ASEAN countries, Australia, Japan, South Korea, and New Zealand. Level tax reduction program. The tariff reduction plan will take effect after the RCEP is officially implemented.
At that time, Noritake, Showa Denko, Asahi Diamond, Sumitomo, Fujimi, Bison, Sankyori Chemical Co., Ltd., Kakuda Co., Ltd., Korea Corporation, Nisshin, Niwa, Shinhan, Taiyo, Deer and other Japanese and Korean grinding companies will enjoy convenience Trade exchanges and reduced tariff dividends directly compete with my country’s superhard materials and abrasives companies on the same stage.
Pictured: grinding wheel products of Noritake, Japan
In the face of tariffs, 3M, Saint-Gobain, Element Six, Winterthur, Saite and other established European and American milling companies that have lost their price advantage, how should they deal with China's huge market?
In a word, are you prepared to face the "wolf is coming" for mill companies dominated by the domestic market?
Thinking from a different perspective, under the RCEP framework, the market access between member states has been further relaxed and gradually unified, which will facilitate the free flow of economic factors within the region. So in the future, will many Chinese grinding companies take the initiative to go abroad and take advantage of the cost advantages of raw materials and labor in Southeast Asia to build factories overseas to establish a complete industrial chain of superhard materials and abrasives to further reduce production costs.
On the other hand, with the signing of RECP, China’s main trading partners will further transfer to ASEAN, Japan, South Korea and other countries, and foreign trade-oriented grinding companies will have more opportunities to buy super-hard materials and abrasives at low prices. Products will seize the huge trade market of RCEP member states. At the same time, grinding companies with high added value and obvious competitive advantages will gain greater benefits.
The person in charge of a mill company whose products are mainly exported to Europe, America, Japan, South Korea and other countries told reporters: "The signing of the RCEP agreement will bring new growth points to foreign trade mill companies, and the company will increase its business layout in Southeast Asia."
Affected by the epidemic, the Chinese market is building a new development pattern in which the domestic cycle is the main body and the domestic and international dual cycles promote each other. RCEP will make the dual cycle more virtuous, more open, and bring unlimited business opportunities. Superhard materials and abrasives companies must not only seize the opportunities brought by RCEP, but also strengthen technological innovation and enhance product competitiveness. After all, good products are the kingly way.
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