By Hasan Muhammad

Over the past two years, trade and investment among RCEP member countries have flourished, contributing to deeper integration of industry and supply chains. The full implementation of the Regional Comprehensive Economic Partnership (RCEP) agreement by all 15 signatories in 2023 stands as a pivotal milestone, establishing the world’s largest free trade area with a combined GDP of $29 trillion and 2.3 billion people.

The rapid growth of trade and investment between China and ASEAN member states has emerged as a key highlight under the RCEP framework. ASEAN has taken the lead in this regional free trade agreement, with China as its most significant promoter. In 2023, the trade volume between China and ASEAN increased by 4.9 percent compared to 2021, the year before the RCEP's implementation. This growth underscores the potential of the RCEP to further integrate China-ASEAN industry and supply chains, accelerating regional economic integration.

In 2023, ASEAN's total trade with other RCEP parties reached an impressive $1.2 trillion, accounting for 35 percent of ASEAN's total trade. China, in particular, stood out as ASEAN's largest partner, with bilateral trade amounting to $702 billion, contributing 20 percent to ASEAN's overall trade. At the same time, the inflow of foreign direct investments from RCEP partners to ASEAN saw remarkable increases: 718.1 percent from Australia, 28.9 percent from Japan, 90.0 percent from New Zealand, and 23.9 percent from Korea.

Concurrently, China's trade with the other 14 RCEP members also experienced robust growth, totaling approximately $1.8 trillion in 2023, which represents 30 percent of China's total merchandise trade. China's Customs statistics reveal that ASEAN remained China's largest trading partner in 2023, contributing around 15 percent to China's total trade.

However, the RCEP's potential remains untapped as some member states have yet to fully implement its rules. Ensuring comprehensive adherence to these regulations is crucial for enhancing the vitality of RCEP’s expansive regional market. Improving the implementation of rules of origin is another necessary step to unlock the full dividends of the RCEP. The coming decade will be pivotal for ASEAN's rapid economic growth and for the structural transformation and upgrading of China's economy.

To fully realize this potential, China and ASEAN must collaborate to eliminate non-tariff barriers and ensure that their enterprises diligently implement RCEP rules. This partnership is essential for creating a seamless, integrated market that can drive sustainable economic progress across the region.

The RCEP region's vast market size, paired with its strategic trade and investment liberalization efforts, is set to unleash formidable economic growth. According to the International Monetary Fund, the RCEP region's GDP could surge by $10.9 trillion from 2023 to 2029, outpacing the GDP growth of the United States and the European Union by 1.4 times and 2.6 times, respectively.

Editor's Note: The writer is a freelance columnist on international affairs based in Karachi, Pakistan. The article reflects the author's opinions and not necessarily the views of China Economic Net.