Opinion | Unlimited Business Opportunities brought by RCEP: Hong Kong should join as soon as possible

By Dr. Kevin Lau

Vice Premier of the State Council, Ding Xuexiang, recently emphasized the importance of Hong Kong deepening regional cooperation and swiftly joining the Regional Comprehensive Economic Partnership (RCEP). He called for Hong Kong to sign free trade and investment agreements with more countries and economies, thereby strengthening collaborative relationships. Ding Xuexiang's stance on this matter is undeniably correct, as joining the RCEP can unlock a myriad of untapped business opportunities for Hong Kong.

The RCEP, which was officially signed in November 2020, boasts a membership of 15 countries, including the ten ASEAN nations, China, South Korea, Japan, Australia, and New Zealand. Encompassing nearly one-third of the global population and the world's economy, the RCEP represents a colossal and comprehensive free trade area. In the aftermath of the pandemic, it has become increasingly challenging to achieve economic recovery through isolated efforts. Instead, the key lies in embracing a collaborative approach that leverages both scale and coordination. By aligning themselves with the RCEP, businesses operating within the region can enhance their supply chain layouts from a regional perspective, enabling them to tap into the ever-expanding consumer markets within the member countries.

The RCEP member countries collectively accounted for over $10 trillion in import and export volume in 2020, which constitutes approximately 70% of the total trade within the Asia-Pacific region. The diverse industries within these 15 member countries exhibit a high degree of specialization and clarity, resulting in the seamless flow of production materials. Through the economic integration platform provided by the RCEP, enterprises can harness the benefits of the closely intertwined supply chain relationships between upstream and downstream companies across different production areas. Looking ahead, the RCEP is poised to further eradicate trade barriers, facilitating the unhindered movement of raw materials and finished products. This enhanced regional connectivity will enable businesses within the RCEP to reap the rewards of optimized regional supply chain relationships.

It is worth noting that the existing RCEP members already play significant roles as Hong Kong's key economic partners. In the previous year, the total merchandise trade between Hong Kong and these members amounted to nearly $860 billion, representing over 70% of Hong Kong's overall merchandise trade. Considering the future economic development of Hong Kong, it is imperative for the local government to exert maximum effort in expediting the accession process to the RCEP. By doing so, Hong Kong can fully capitalize on the immense potential for economic growth and diversification that the RCEP offers.

Furthermore, beyond its immediate economic benefits, joining the RCEP holds broader strategic implications for Hong Kong. The "Belt and Road" initiative, which represents a major national development strategy, encompasses a wide range of comprehensive measures. The ASEAN countries, as vital components of this expansive strategy, present immense opportunities for Hong Kong. By becoming a member of the RCEP, Hong Kong can effectively leverage its unique advantages as a region backed by the motherland and well-connected to the global market. This seamless integration will enable Hong Kong to actively participate in and reap the benefits of the "Belt and Road" process while contributing to the overall success and prosperity of the initiative.

In conclusion, the call for Hong Kong to join the RCEP as soon as possible is grounded in sound economic reasoning. By embracing this opportunity, Hong Kong can unlock a vast array of business prospects, stimulate economic growth, and solidify its position as a regional economic powerhouse. Beyond its immediate economic gains, joining the RCEP aligns with the broader strategic objectives of the "Belt and Road" initiative, enabling Hong Kong to play a pivotal role in the regional and global economic landscape.

The author is a specialist in radiology with a Master of Public Health from the University of Hong Kong, and an adviser of Our Hong Kong Foundation.

The views do not necessarily reflect those of DotDotNews.