Qingdao Policy: After RCEP Comes Into Effect, The Industrial Chain Will Return To The Textile Industry And Upgrade

Recently, a batch of self-made cloth worth 200000 yuan has been declared for export at Jimo customs, which is subordinate to Qingdao Customs. After completing the customs clearance supervision procedures, they will leave Qingdao port for Vietnam. This batch of cloth is produced by Qingdao Guihua Knitting Co., Ltd. and exported to its overseas processing plant in Vietnam. "The company's overseas factories are finally able to use the cloth produced by the domestic parent company." Qingdao Guihua Knitting Co., Ltd. Sales Department Director Li Yuqin said happily.

Qingdao Guihua Knitting Co., Ltd. is a comprehensive knitting company. In order to reduce the production cost and enjoy the tariff preference given by Japan to ASEAN member countries, the company has invested in the construction of knitting garment processing plants in Vietnam and other Southeast Asian countries, and its products are mainly sold to the markets of RCEP member countries such as Japan. Although the domestic parent company mainly produces knitted fabrics, in order to enjoy Japan's tariff preference on knitted garments of Vietnamese origin, the company can only purchase production fabrics from Vietnam, which affects the smooth supply chain of the industrial chain between domestic companies and overseas factories.

"According to the FTA signed by Japan and ASEAN, the value content of knitted garments in Vietnam must reach 70% in order to meet the rules of origin under the agreement and enjoy zero tariff in Japan." Li Yuqin said that due to the relatively simple processing of knitted garments, the use of domestic parent company fabrics can not achieve 70% value-added requirements in Vietnam, so even if the quality and price of fabrics produced by domestic parent companies are better than those of Vietnamese fabrics, enterprises can not use them.

Yao Yong, a senior director of the customs and Excise Department of Qingdao Customs, said that after RCEP came into effect, China, Japan, South Korea, ASEAN and other countries and regions have become a party to the same agreement. The integration of several bilateral free trade agreements signed by the member parties not only reduces the threshold for enterprises to enjoy the FTA, but also breaks through the blocking point of internal and external circulation of domestic multinational enterprises, Stable and smooth domestic and foreign industrial chain and value chain.

"Fabrics of Chinese origin used by Vietnamese processing plants can be regarded as contracting party ingredients. Our knitted garments processed with domestic fabrics meet the requirements of the RCEP agreement on rules of origin, and can continue to enjoy zero tariff treatment in Japan by virtue of the RCEP certificate of origin issued by Vietnam." Li Yuqin said that this can not only improve the company's overall profit, but also stabilize the textile, printing and dyeing industry chain in China and extend the industrial value chain.

It is estimated that due to the tariff reduction policy brought about by RCEP, Qingdao Guihua Knitting Co., Ltd. can increase the fabric export capacity to ASEAN by 21.66 million yuan per year due to the adjustment of industrial chain supply chain, and promote the development of other upstream and downstream industries.

Under the guidance of the customs, Qingdao Canary Meidi household products Co., Ltd. also plans to provide domestic knitted fabrics for its Vietnamese processing plants under the guidance of the customs, and seize the policy dividend brought by the RCEP rules of origin accumulation.

"After completing the supply chain adjustment of overseas processing plants, our company is expected to increase the export of home textile fabrics to Vietnam by more than 100 million yuan every year." The company's production management department Vietnam manager Song Jian said.

"This year, Shandong Province has listed light industry and textile as one of the" top ten "industries and carried out the optimization and upgrading of the industrial chain and supply chain. As an important textile and clothing industrial base in China, Qingdao will also usher in new development opportunities." Yao Yong said that by sharing the information of overseas investment projects with the commercial departments, the Customs has initially selected about 10 Qingdao textile and garment enterprises that have invested in ASEAN as the key points, providing precise policy guidance to enterprises, helping enterprises to extend the industrial chain, optimize the supply chain and extend the value-added chain. According to the RCEP rules of origin, these enterprises can make good use of nearly 200 million yuan of fabric export business every year. In the next step, Qingdao Customs will continue to strengthen the promotion of RCEP policies to promote cross-border enterprises to make full use of the preferential policies.

(source: Economic Daily)