Trade deal will bring China big opportunities in shoes and leather
Following the recent release of a special report by China Leather Industry Association (CLIA)'s secretary general, Chen Zhanguang, on the subject of the opportunities and challenges presented by China’s participation in the Asia-Pacific’s Regional Comprehensive Economic Partnership (RCEP), local media have published discussion on the three “major” opportunities now afforded the country in the realm of leather.
The three key opportunities, according to reports, are industry-wide development on a global scale, trade in imports and exports and cross-border cooperation and investment.
Regarding globalised development, it was suggested that the RCEP framework is conducive to the fifteen Asia-Pacific nations which together form the partnership taking to the international stage as “the world’s most competitive leather and footwear industry manufacturing and consumption centre”.
Chinese media took Vietnam’s expected increase of imports of raw materials from China for finishing (in order to export to more mature commercial markets such as Japan and South Korea) once the free-trade agreement (FTA) takes full effect as a positive example.
Explicitly, it was suggested that the RCEP FTA will better facilitate the flow of semi-finished leather articles throughout the region’s “production network”, meaning that there will be a heightened appetite for China-based raw materials and semi-finished components within the region as a result, due to RCEP-related tariff reductions on Chinese leather.
From an import-export perspective, regional tariff decreases resulting from the FTA will support the market competitiveness of Chinese leather and footwear products internationally, local media said.
In terms of cross-border cooperation and investment, reports stated that the RCEP will help deepen regional cooperation regarding production capacity and stimulate internal investment, which will reportedly inspire “win-win” relationships throughout the length and breadth of the regional leather and leather footwear supply chains.
Challenges-wise, Mr Chen acknowledged that reduced tariffs between participating countries in the region would make domestic market competition more intense. As a remedy, he suggested that all local leather stakeholders foster a mature understanding of the agreement, plus actively exploit its preferential tariff measures.
He further added that an accelerated rate of industrial “upgrading” through technological innovation and overall quality improvement was paramount in ensuring the continued competitiveness of the domestic leather industry.
