China, Many Free Trade Agreements Along The Belt & Road Initiative




Current trade with the US has seen a revival of Chinese interest in developing free trade routes, particularly along the Belt & Road Initiative



The elimination of tariffs and taxes is always a boom for exporters and is something that China has taken advantage of very effectively in the last two decades.

When the Asian country began its journey to become the manufacturing giant it is today, it has attracted foreign producers by eliminating or cutting tax rates on profits for profitable operations up to five years. This represented a kind of booming period for foreign companies in China and probably China’s entire economic growth began.

China has also been very busy in agreeing treaties on double taxation, which often contain clauses and reductions in taxes useful for the trade of the respective parties. China has also been active when it comes to participating in free trade agreements; has significant and far-reaching agreements with the likes of ASEAN, Australia, Singapore, South Korea and New Zealand, and is actively engaged in the negotiation of many others.

The current trade and tariff tensions between China and the United States have seen a revival of Chinese interest in the development of free trade routes, and in particular along the Belt & Road Initiative.

Although not all products, in particular, the IT components and advanced technology components currently obtained from the United States, will be available from new suppliers, China will invest in the development of these, in particular with Russia. Consequently, the issue of free trade along the Belt & Road Initiative is a matter of great interest.


China-ASEAN Free Trade Agreement

This agreement has been in force since 2010 and was expanded in 2015 to incorporate an extension into the economies of Cambodia, Laos, Myanmar and Vietnam, which had asked for more time to adapt.

The agreement covers both the goods and services provided by the aforementioned nations – as well as from China, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand – eliminating tariffs on around 95% of all goods and services exchanged. This covers most of the Belt & Road sea routes.


China-Hong Kong-Macao: economic partnership agreements

Although Hong Kong and Macao are part of China, they have different customs and tax regimes. To address this, as well as to recognize the status of Hong Kong and Macao, these CEPA agreements have been signed between the countries and China, which in some cases provides investment incentives that only companies registered in Hong Kong and Macao can take advantage of it.


China-Pakistan Free Trade Agreement

This agreement entered into force in 2009 and formed the backbone of Chinese investments in Pakistan. A direct result of this was the Chinese development of the Pakistani port of Gwadar, as well as the “China-Pakistan economic corridor” which aims to connect the Chinese railway from Kashgar in its southwestern Xinjiang province to the Pakistani railway networks of Islamabad.


Free Trade Agreement of the Gulf of China Cooperation Council

This agreement – signed between China and the GCC member states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – is still under negotiation. It includes details on goods and services, however, given the nature of the GCC economies, it focuses largely on energy.


China-Sri Lanka Free Trade Agreement

This agreement, still under negotiation, concerns one of the favorite destinations for a growing number of Chinese tourists. Sri Lanka is coveted by both China and India as a transhipment base, as well as potential for naval operations.


China-Georgia Free Trade Agreement

This agreement allows China to access the Caucasus markets up to the Black Sea. The agreement, as confirmed by the Chinese trade minister Gao Hucheng, will allow Chinese companies and consumers greater access to high quality products such as wine and fruits from Georgia, while Georgians will benefit from cheaper Chinese industrial products.


Free trade agreement between the Economic Union of China and Eurasia

This agreement, signed last year, sees the most important part – related to the product categories that will be included – still under negotiation. If agreed, it will effectively bring free trade in Chinese goods to the borders of the European Union.

China is eager to conclude an agreement because countries like Kazakhstan, Russia and Belarus offer China uninterrupted transport of goods to the borders of the European Union in Brest, Belarus.


China-Regional Global Economic Partnership Agreement

This agreement was publicized by some as China’s response to the TPP and develops between the ten member states of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) and the six countries with which ASEAN has free trade agreements (Australia, China, India, Japan, New Zealand and South Korea). As such, therefore, it is a purely Asian affair.

The main prize for China would be to attract India and Japan in a free trade agreement through the RCEP, which would give Chinese producers access to two huge, dynamic and powerful markets.




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