ThePaper.cn:
In recent years, there have been a growing number of free trade agreements in the world. How is the development of China's free trade agreements coming along? What role do they play? What are the future plans?
Wang Wentao:
Mr. Wang Shouwen will answer this question.
Wang Shouwen:
Thank you for your question. Indeed, currently, international free trade agreements are flourishing. According to WTO statistics, more than 350 free trade agreements have been reached so far. It is particularly noteworthy that some large free trade agreements have been signed and entered into force. For example, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the RCEP, the EU-Japan Economic Partnership Agreement, and the U.S.-Mexico-Canada Agreement are all large-scale free trade agreements. Under the correct leadership of the CPC Central Committee and the State Council, we have followed the general trend of international regional economic integration, actively carried out free trade agreement negotiations with trading partners and made great progress. In 2002, China's first free trade agreement, the free trade agreement reached with ASEAN, enabled us to embark on a new journey of free trade agreements. So far, we have successfully negotiated19 free trade agreements and signed agreements with 26 countries and regions.
It is worth mentioning that since the 18th CPC National Congress, we have signed nine free trade agreements (FTAs), including eight with individual countries, such as the Republic of Korea (ROK), Australia and Switzerland, and the Regional Comprehensive Economic Partnership (RCEP) agreement. Meanwhile, we've upgraded existing free trade agreements, including the China-ASEAN FTA, and proceeded with negotiations on upgrading the China-Chile FTA, the China-Singapore FTA, and the China-New Zealand FTA. These are all very important works.
You asked what important role FTAs have played for our country. I should say that the role is very clear. First, the FTAs play a significant role in expanding trade and investment relations with our free trade agreement partners and stabilizing the overall performance of foreign trade and foreign investment. For example, trade volume with its FTA partners accounted for only 12.3% of China's total foreign trade in 2012, but last year, the proportion rose to nearly 35% of the total. Last year, the epidemic had a great impact on global trade, however, China's trade with its FTA partners grew by 3.2%, while trade with non-FTA partners only increased by 0.8%. Therefore, FTAs play a very significant role in foreign trade. In terms of investment relations, last year, nearly 70% of China's outbound investment was to its FTA partner countries and 84% of foreign investment in China was from FTA partners. Therefore, FTAs play a very significant role in investment relations.
Second, FTAs have further deepened economic and trade relations with FTA partners. For example, bilateral trade between China and the Association of Southeast Asian Nations (ASEAN) was only more than $78 billion in 2003, however, the figure reached $685.1 billion last year, an increase of 8.7 times. If there are no FTAs, trade cannot grow so much. China has remained ASEAN's largest trading partner for 12 consecutive years. In 2020, ASEAN also became China's largest trading partner. Take another example - Chile. Chile's trade with China accounted for 20%, or one-fifth, of its total foreign trade in 2012, compared to one-third last year. This goes to show just how effectively the FTA and the FTA upgrade have worked to promote trade between the two countries. Pakistan is another example. We inked the China-Pakistan FTA in the past, with a low level of trade liberalization. We upgraded the FTA the year before last. After the upgrade, the level of liberalization has increased. Pakistan's exports to China have grown rapidly, and the trade imbalance between China and Pakistan has also been narrowed.
Third, FTAs have greatly promoted China's opening-up. In terms of trade in goods, China has an average most-favored-nation tariff rate of 7.5%. Under FTAs, China and its trading partners implement zero tariffs on 90 percent of products, so the level of tariff liberalization in goods trade is very high. In terms of trade in services, of the 160 services sub-sectors under the 12-sector WTO classification, China committed to opening up 100 sub-sectors under 9 sectors when entering the organization. By promoting free trade agreements, we have greatly enhanced the openness of trade in services. Take the RCEP agreement as an example. China added 22 new services sectors to the 100 sectors it committed to open upon its accession to the WTO, and raised the level of openness of 37 sectors. In terms of investment, there are no agreements regarding investment openness in the WTO. The FTAs have created many rules regarding investment openness, investment market access, investment facilitation, and investment protection, which will help develop mutual investment between China and its FTA partners, and advance regional integrated development to form more stable industrial and supply chains.
We will further expand opening-up by signing more free trade agreements and upgrading our existing free trade agreements. In accordance with the decisions and deployments of the CPC Central Committee and the State Council, we will step up our efforts to build a network of high-standard free trade zones, which focuses on neighboring economies, radiates across the Belt and Road Initiative-related economies, and has a global reach. Next, we will upgrade our existing free trade agreements, including the China-Singapore FTA and the China-ROK FTA. At the same time, we will accelerate negotiations on new agreements, including the China-Japan-ROK FTA, China-Gulf Cooperation Council FTA, China-Israel FTA and China-Norway FTA. We are actively considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). We will thoroughly implement the decisions and deployments of the CPC Central Committee. Thank you.
