Machinery / Industrial Parts & Tools

The machinery industry is the basic and strategic industry of the national economy. It is an important industry that my country actively participates in the global economic integration and reflects the country's comprehensive strength. It is also an industry with a relatively high degree of openness after my country's accession to the WTO. The scale of my country's machinery industry accounts for 20% of the national industry and 23% of the entire manufacturing industry. Gao Lihong, director of the International Cooperation Department of China Machinery Industry Federation, said at the "Regional Comprehensive Economic Partnership" (RCEP) special training meeting recently that the RCEP member countries have obvious comparative advantages, China's machinery industry has a complete range, and Japan and South Korea have strong scientific and technological strength. , ASEAN labor costs are low, therefore, it will help to form a strong complementary effect, reduce the comprehensive cost of the industrial chain, and will play a positive role in stabilizing and strengthening the regional industrial chain supply chain. my country's machinery industry accounts for more than 30% of the trade volume in the RCEP region. The effective implementation of RCEP will bring new opportunities for the high-quality development of my country's machinery industry.

Gao Lihong analyzed that the use of RCEP rules of origin accumulation is very helpful to export-oriented manufacturing enterprises with long industrial chains in the machinery industry. It can help enterprises achieve optimal allocation and flexible coordination of production factor resources.

Gao Lihong said that in the first quarter of 2022, the trade volume of my country's machinery industry with other RCEP countries was US$75.774 billion. The tariff reduction measures will promote my country's machinery industry to expand trade with other RCEP members.

On March 18 this year, RCEP officially came into effect in Malaysia. The 24 trucks that Foton Motors exported to Malaysia obtained the first RCEP certificate of origin issued by Beijing Customs on the day the agreement came into effect. Malaysia is one of Foton's key markets in Southeast Asia. Foton's light-duty trucks have been leading the industry in Malaysia for three consecutive years, and automatic transmission heavy-duty trucks have also begun to enter the Malaysian market. Gao Lihong said that with the implementation of RCEP in Malaysia, the potential of China-Malaysia auto economic and trade cooperation will continue to expand. After the RCEP comes into effect, the tariffs on trucks exported to Malaysia will be reduced to zero year by year, which will greatly enhance the competitiveness of Foton Trucks in Malaysia and help Foton Motors to further develop the Southeast Asian market.

Gao Lihong said that under the background of RCEP, my country's machinery industry has a broad space for economic and trade cooperation within the region. Between China and Japan, Japan's commitment to my country's tariff concessions involves a total of 963 tax items related to the machinery industry, 941 tax items that are directly zero-tariff after RCEP takes effect, and 22 tax items that are gradually reduced to zero tariffs. The ratio is 92.44%. 11 of the 14 sub-sectors of my country's machinery industry directly enjoy zero tariffs after RCEP takes effect. All 963 tax items involving machinery products have been transitioned, and all exports to Japan have been reduced to zero tariffs. For example, GAC Mitsubishi Motors Co., Ltd. mainly imports auto parts from Japan through general trade to the Changsha plant for vehicle production. The implementation of RCEP will greatly reduce procurement costs, import tariffs will decrease year by year, and 142 kinds of imported parts will eventually be zero. Tariffs will greatly reduce the cost of import tariffs for enterprises.

The entry into force of RCEP will also bring certain challenges to the development of my country's machinery industry. Gao Lihong said that Japan and South Korea are the fourth and fifth largest trading partners of my country's machinery industry respectively, and my country's trade in machinery products with Japan and South Korea has always been in deficit. RCEP further consolidates the free trade relationship between China, Japan and South Korea, and will also promote competition and cooperation in the machinery industry of China, Japan and South Korea.

In order to better seize the opportunity of RCEP, Gao Lihong put forward the following suggestions:

The first is to promote the construction of a new dual-cycle development pattern for the machinery industry with the help of RCEP. Making full use of the opportunities and challenges brought about by the implementation of RCEP forces my country's machinery industry to speed up the pace of industrial transformation and upgrading, promote the "going out" of some of China's high-quality production capacity, and reserve space for my country's mid-to-high-end production capacity upgrade and further expansion of high-quality production capacity. RCEP will further promote the supply-side structural reform of my country's machinery industry and develop both domestic and foreign markets, make full use of the two resources, and accelerate the formation of a new development pattern of double-cycle machinery industry.

The second is to accelerate the integration of quality and safety standards in the field of equipment manufacturing with international standards. Promote the internationalization of my country's equipment manufacturing standards and quality certification to achieve new breakthroughs, and promote the improvement of the international competitiveness of my country's equipment manufacturing industry. Encourage industry organizations and enterprises to actively participate in the formulation of international standardization, strengthen my country's international voice in this field, and improve the internationalization level of my country's equipment manufacturing industry.

The third is to promote the deep integration of the entire industrial chain of my country's machinery industry and the RCEP region. The 10 ASEAN countries in the RCEP region have strong demand for infrastructure construction. Infrastructure construction can drive the upstream and downstream to go global. my country's machinery and equipment industry chain is relatively complete. It should be through EPC general contracting, from engineering design, equipment supply, construction, operation and maintenance , technical standards and other aspects to play a synergistic effect, form an overall advantage, promote the "going out" of the entire industrial chain of my country's machinery industry and in-depth entry into ASEAN, and continuously expand the international influence of Chinese standards and Chinese manufacturing.

Fourth, make good use of international rules to safeguard the legitimate rights and interests of industry enterprises. After the implementation of RCEP, regional trade competition may further intensify. We must always pay attention to changes in the situation, make good use of international general rules, safeguard the legitimate rights and interests of industry enterprises, and ensure my country's industrial security. Risk prevention and control should be strengthened, an early warning mechanism for trade frictions should be established, major risk early warnings should be issued in a timely manner, and policy advice, legal assistance and trade remedies should be provided to enterprises in related industries.