Cambodia-China Free Trade Agreement Signed, Both Sides Pledged the Utmost Commitment to Open Their Markets

Source:Organizing_Committee    |      Date:2020-10-15

  On October 12, the Cambodia-China Free Trade Agreement (the “CCFTA") was formally signed, becoming the 18th free trade agreement that China has signed with foreign businesses. According to the person in charge of the Department of International Trade and Economic Affairs of MOFCOM, the CCFTA was an agreement with a high level of openness, covering a wide range of areas and achieving mutual benefit and win-win results. In terms of trade liberalization in goods and market access in services, it has pledged the utmost commitment among existing free trade agreements made by China.

  

  (Picture Source: ASEAN’s WeChat Official Account)

  It is introduced that in terms of the market openness of the trade in services, the two sides listed the commitments of their respective service sectors on market openness in the schedule of specific commitments for trade in services through a positive list, realizing a high level of two-way opening-up of markets. Cambodia has made the highest-level commitments on the market openness in laboratory research and development, container freight and other sectors, and China has given high-level market access treatment to the Cambodian side in finance, transportation, and other fields.

  At the same time, compared with its commitment for entrance of WTO, China has opened new markets in 22 sectors and fields, including social services, hospital services, sports and entertainment, and professional design, and has made improvements in 37 service sectors and fields, including finance, environment, computers, advertising, maritime transport and tourism. In the CCFTA, both sides have pledged the utmost commitment to open their markets to each other.

  The 2020 China International Fair for Trade in Services (“CIFTIS”) was taken place on September 4-9 in Beijing, with the theme of “Global Services, Shared Prosperity”. At the China-ASEAN Service Industry Cooperation Forum held during the fair, Tie Gong, Minister-Counselor of the Embassy of Cambodia in China, expressed that the signing of CCFTA would further deepen the bilateral economic and trade relations and enhance the level of liberalization and facilitation in bilateral trade and investment. Tie Gong said that Cambodia was now gradually transforming from agriculture and light industry to heavy industry and service industry. Of which, the service industry accounted for about 40% of the GDP. With the continuous development of tourism, tourism service industry would become one of the pillars in the development of service industry.

  

  (Picture Source: Official Website of Embassy of Cambodia in China)

  Tie Gong also introduced Cambodia's investment environment and preferential policies. He said, there was no exchange control in Cambodia, and foreign investment in Cambodia could be 100% wholly-owned. In addition, foreign companies could engage in all industries except military industries. Besides, in order to encourage foreign investors, investing in Cambodia could enjoy up to nine years of exemption from business tax, income tax and tariffs on imported equipment and raw materials.

  At the Summit Forum on China International Economic Cooperation “Go Global” held during the CIFTIS, Luo Xiaomei, Deputy Director-General of the Department of Asian Affairs of MOFCOM, indicated that the economic and trade cooperation between China and Asian countries was facing rare opportunities, and the cooperation prospects were promising. Luo Xiaomei figured out that:

  

  (Picture Source: Official Website of MOFCOM)

  1. The economic decline of China's neighboring countries was generally smaller than that of other regions amid the COVID-19 outbreak. According to the latest forecast by the International Monetary Fund, the world economy is expected to grow by 4.9% in 2020, of which the economy of the United States, the Eurozone and Japan is expected to decline by 8%, 10.2% and 5.8% respectively, and the economy of emerging countries and developing Asian countries is expected to decline by 0.8%. The economy of Asian countries including China have shown strong resilience and tremendous momentum of growth in the face of the COVID-19 epidemic.

  2. Strong domestic demand in Asian countries has created a huge market. Asia is the largest and most populous continent of the seven continents, boasting a population of over 4 billion. With the upgrading of infrastructure in developed economies and the progress of industrialization and urbanization in emerging economies in Asia, the market demand for transportation, electricity, new energy, and other fields has remained robust.

  3. Asian countries are favored place for investors. With the integration of regional industrial and supply chains and the increasing demand of investors for diversified layout, more middle and low-end commodity production is shifting to Southeast Asia. In recent years, Southeast Asia and South Asia have kept attracting foreign capital at a relatively rapid rate, with manufacturing, electric power and real estate being the main fields of foreign investment attraction. At the same time, in order to make the regions more attractive to foreign investment, Asian countries are constantly improving their investment environments.