China-Malaysia Qinzhou Industrial Park, Guangxi Zhuang Autonomous Region, China. （PHOTO: XINHUA）

The Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement, came into effect in Malaysia on March 18. Within ASEAN, Malaysia is expected to be the largest beneficiary of the agreement in terms of exports, with a projected 200 million  USD  increase,  according  to Malaysia's Ministry of International Trade and Industry (MITI). Meanwhile, China-malaysia economic relations will be greatly promoted.

    According to the agreement, 67.9 percent of Malaysian goods receive instant zero tariff when exported to China whereas 69.9 percent vice versa. Both countries added new market entry promises on the basis of China-ASEAN free trade zone, such as mechanical equipment and parts from China to Malaysia, and chemical and paper products from Malaysia to China.

    Based on data from the MITI, China has remained Malaysia's largest trading partner for 13 consecutive years, and the trade volume between the two countries accounted for 18.9 percent of Malaysia's total trade volume in 2021, increasing by 20.7 percent compared with that of 2020.

    The MITI said that RCEP represents a significant milestone in the vibrant growth and revitalization of economies, adding that "RCEP would spark the creation of new regional supply chains apart from strengthening existing networks, thereby boosting the growth of domestic businesses as they immerse into the global trading ecosystem."

    RCEP has 15 members, including 10 ASEAN members and five free trade partners of ASEAN, namely China, Japan, South Korea, Australia and New Zealand, composing about one third of global GDP and population. The agreement has come into effect in 12 member states.

    The agreement includes tariff reduction and exemption, trade convenience, service investment and intellectual property rights protection, and more than 90 percent of goods within the partnership will realize zero tariff gradually.

    Taking effect on January 1, RCEP has already demonstrated its positive influence on trade within the partnership. Based on China's customs data, the total volume of import and export  of China with RCEP partners reached 1.85 trillion RMB, increasing 9.5 percent year-on-year.