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Capitalising Export Opportunities under

Regional Comprehensive Economic Partnership (RCEP)

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Trade liberalisation

Improve companies’ operation efficiency by providing quick and reliable information.

Digital economy

Tariffs for about 92% of goods traded will be lowered progressively over an agreed time frame

Digital Economy

Focus on promoting e-Commerce, enhance cross border flow of data including financial and trade transaction, protection of online consumers including in areas of transparency and cybersecurity

Investment

Promote liberalisation of investment sectors and improve investment facilitation provisions

Rules of origin criteria

Create a common Rule of Origin (RoO) by harmonising the information requirements and local content standards for businesses, therefore reduce transaction costs for trading with multiple RCEP member countries

RCEP assist the Region’s Post-Pandemic Recovery

Source: Asian Development Blog

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Relevant RCEP Chapters to SMEs

Chapter 14 : Small and Medium Enterprises (SMEs)

Promote sharing of RCEP-related information relevant to SMEs by establishing and maintaining a publicly accessible information platform
Aims to strengthen cooperation in the areas of e-commerce, intellectual property rights, access to markets, and innovation, among others.

Chapter 15 : Economic and Technical Cooperation (ECOTECH)

Explore and undertake economic, technical cooperation & capacity building activities that focus, for example, on trade in goods, trade in services, investment, intellectual property, e-Commerce, competition, and SMEs, among others as mutually agreed upon by the Parties.

Source: MITI FTA website

Chapter 12 : Electronic Commerce

Aims to promote e-Commerce among RCEP members
Requires the Parties to adopt or maintain a legal framework to create a conducive environment for e-Commerce, protection of personal information and cross border transfer of information

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Malaysia’s Trade Performance with China

Trade

Exports

Imports

Trade Balance

Malaysia’s Trade Performance with China, �2017-2021 & Jan-Oct 2022

Products	Growth (RM bil)	Growth (%)
Manufactures of metal�(mainly aluminium)	12.84	283.3
Iron & steel products�(iron& steel bars)	12.58	6,556.2
E&E products (semiconductor)	9.28	18.4
LNG	7.29	129.1
Chemicals (inorganic chemical elements, �oxides & halogen salts)	6.86	62.0

Significant export growth by products between 2017-2021

Between 2017-2021, Malaysia’s trade with China grew by 45.1% to RM421.49 billion, while exports ↑52.8% to RM192.47 billion and imports ↑39.3% to RM229.02 billion.

Export expansion was driven by higher shipments of manufactures of metal, iron & steel products, E&E products, LNG and chemicals.

In Jan-Oct 2022, trade* rose by 17.9% to RM402.08 billion, while exports ↑12.3% to RM173.86 billion and imports ↑22.6% to RM228.22 billion. Major export products were E&E products (38.4% share), chemicals (8.9%) and LNG (8.6%).

For the first 10 months, largest trade deficit was recorded for E&E products, machinery and petroleum products.

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Note: *Trade with China accounted for 16.9% of Malaysia’s total trade, while exports and imports made up 13.5% and 21.0% share, respectively.

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CHINA’S KEY REGIONS

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Muslim Community Region : Xinjiang, Gansu, Qinghai, Ningxia & Shaanxi

98.42 mil population

Bohai Economic Rim: Beijing, Tianjin, Liaoning, Hebei & Shandong.

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133.20 mil population

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Emerging Central Provinces: Hunan, Jiangxi, Henan & Hubei

261.51 mil population

Western region :

Chongqing & Chengdu

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110.77 mil population

Yangtze River Delta:

Shanghai, Jiangsu & Zhejiang.

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158.52 mil population

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Pearl River Delta : Guangzhou, Shenzhen, Dongguan, Foshan, Zhongshan, Zhuhai, Jiangmen, Huizhou & Zhaoqing, Huanan

Guangxi & Yunnan.

196.30 mil population

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EXPORT OPPORTUNITIES TO CHINA (PRODUCTS)

ELECTRICAL & ELECTRONICS

integrated circuits, semiconductor, electrical apparatus for switching/circuit

PALM BASED

Palm based biodiesel, palm kernel products, palm acid oil, refined palm oil, oleochemical

MINING PRODUCTS

LNG, petroleum products, bitumen

MANUFACTURES OF METAL Aluminium (alloy, ingots, foil), copper (powder)

CHEMICALS & CHEMICAL PRODUCTS Silicon, P-xylene, polymer

RUBBER & RUBBER PRODUCTS

Synthetic rubber and natural rubber

FMCG

Snacks, biscuits, beverages, household, beauty products

AGRI PRODUCE

Seafood (grouper fish, tiger prawns, lobster, mud crab), tropical fruits (durian, pineapple, jackfruit)

MACHINERY

Parts & accessories to manufacture semiconductors

E&E

1. China imports more than USD300 billion in semiconductors annually and holds between 15-20% of global semiconductor capacity.

2. China will rely on imports to improve the level of chip manufacturing, as it is yet to have the ability to produce the chip manufacturing equipment required by advanced processes.

Palm Based

1. China’s edible oil market is still dominated by soybean and rapeseed oils, but China’s consumption of palm oil has grown over 240% in the past two decades, making it the third largest consumed edible oil.

2. This rapid development and changes in the consumer’s behavior have created opportunities for higher usage of palm oil products from oleochemical industry, personal care, cosmetics, cleaning agent and biofuel production.

3. The versatility and natural characteristics of palm oil such as its natural preservative effects, creamy texture, and resilience to high temperatures, make it an ideal for the food processing industries.

4. Palm-based shortening has also been discovered as substitute ingredients to beef tallow for hot pot cooking in the Western Region of China. MATRADE Chengdu recently connected an importer with Malaysian company on a deal of 22MT trial order of palm-based shortening with a potential deal of an annual order of 50,000 to 80,000 tons (industrial packaging).

Aluminium

1. The automotive manufacturing industry reached pre COVID-19 levels since the third quarter of 2021.

2. The packaging sector continues to grow which drive the demand in aluminum.

Rubber based

1. China is the world’s largest importer and consumer of rubber products, consuming around 40% of the total global output.

2. China being one of the major three automobile manufacturers in the world.

3. The increasing growth of the automobile industry has resulted in the increased demand for rubber based materials.

LNG

1. Demand from coal-to-gas [switching] to continue to grow in 2022 and will add to the demand for natural gas.

2. Average annual increase in natural gas demand is expected to exceed 20 bcm in the 14th Five Year Plan (2021-2025) and reach 430 bcm in 2025

Rubber based

1. China is the world’s largest importer and consumer of rubber products, consuming around 40% of the total global output.

2. China being one of the major three automobile manufacturers in the world.

3. The increasing growth of the automobile industry has resulted in the increased demand for rubber based materials.

Chemicals

1. The Chinese government will continue to support the construction of highway network during the 14^th Five-Year Plan (2021-2025),

2. The maintenance of highway will be a new growth point. The trend of bitumen imports will continue to increase.

Seafood & tropical fruits

Talk about OurFarm Asia

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EXPORT OPPORTUNITIES TO CHINA (SERVICES)

EDUCATION Early childhood (special needs, special skill classes, Montessori), higher education (A-level, O-level, under-graduate & post-graduate study)

FRANCHISE

F&B, education, health & wellness

BUSINESS SERVICES

Accounting, legal, logistic, engineering, environment & waste treatment, trading

ICT

ICs design & software, gaming, animation, mobile apps

HEALTHCARE TOURISM

Medical treatment in Malaysia on IVF treatment, oncology (cancer), cardiology (heart), Hepatitis C & HPV vaccines

HEALTH & WELLNESS

Elderly care, fitness/sports, family entertainment

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RCEP Pavilion in CAEXPO