China has established its strategic position in the world, in part due to its signing of numerous and advantageous free trade agreements. The duty and tax reductions provided by FTAs, has helped enable China’s rise as the leading world manufacturing hub in recent decades.
List Free Trade Agreements
In total, China has signed off 23 FTAs, which involve a total of 26 countries and regional blocs (including ASEAN, comprising 10 nations). A further 10 FTAs are currently under negotiation, while 8 more are under consideration.
Countries/Regions Having FTAs with China |
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FTA |
Countries |
Status |
China-Ecuador FTA |
Ecuador |
Signed |
China-Nicaragua FTA |
Nicaragua |
Early harvest arrangement signed |
RCEP |
ASEAN (10), China, Japan, South Korea, Australia, New Zealand |
Signed and effective |
China-Cambodia FTA |
Cambodia |
Signed and effective |
China-Mauritius FTA |
Mauritius |
Signed and effective |
China-Maldives FTA |
Maldives |
Signed |
China-Georgia FTA |
Georgia |
Signed and effective |
China-Australia FTA |
Australia |
Signed and effective |
China-Korea FTA |
South Korea |
Signed and effective |
China-Switzerland FTA |
Switzerland |
Signed and effective |
China-Iceland FTA |
Iceland |
Signed and effective |
China-Costa Rica FTA |
Costa Rica |
Signed and effective |
China-Peru FTA |
Peru |
Signed and effective |
China-Singapore FTA |
Singapore |
Signed and effective |
China-New Zealand |
New Zealand |
Signed and effective |
China-Chile FTA |
Chile |
Signed and effective |
China-Pakistan FTA |
Pakistan |
Signed and effective |
China-ASEAN FTA |
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam |
Signed and effective |
Mainland and Hong Kong Closer Economic and Partnership Arrangement |
Hong Kong |
Signed and effective |
Mainland and Macao Closer Economic and Partnership Arrangement |
Macao |
Signed and effective |
China-Taiwan ECFA |
Taiwan |
Signed and originally expired in September 2020 |
FTAs Under Negotiation |
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Partnering Country |
Agreement name |
Status |
Gulf Cooperation Council member states (GCC) |
China-GCC FTA |
Negotiations launched |
Israel |
China-Israel FTA |
Negotiations launched |
Japan-South Korea |
China–Japan–South Korea FTA |
Negotiations launched |
Korea |
China-Korea FTA second phase |
|
Moldova |
China-Moldova FTA |
Negotiations launched |
Norway |
China-Norway FTA |
Negotiations launched |
Panama |
China-Panama FTA |
Negotiations launched |
Palestine |
China-Palestine FTA |
Negotiations launched |
Peru |
China-Peru FTA upgrade |
|
Sri Lanka |
China-Sri Lanka FTA |
Negotiations launched |
China’s major Free Trade Agreements
Here we discuss the advantages of China’s major free trade agreements.
RCEP
The Regional Comprehensive Economic Partnership, signed by 15 Asia-Pacific countries – China, Japan, South Korea, New Zealand, Australia, and the 10 Association of Southeast Asian Nations (ASEAN) member states – is the world's’ largest free trade agreement.
The primary aim of the RCEP is to establish a comprehensive economic partnership based on existing bilateral ASEAN agreements with its FTA partners in the region. It is guided by a uniform set of rules and standards, lowered trade barriers, streamlined processes, and improved market access.
RCEP will provide substantial new trade and investment opportunities within the participating countries, covering roughly 30 percent of the global GDP (US$26.2 trillion) and 30 percent of the world’s population to form Asia’s largest trade bloc to date.
China-ASEAN FTA
The China-ASEAN FTA eliminates import-export tariffs and other barriers on some 90 percent of all products traded between China and the ASEAN member states. The signing of the China-ASEAN FTA, followed by the RCEP agreement, would have a significant impact on China and Asia's’ development in global sourcing and the foreign investment.
CEPA between mainland and Hong Kong/Macao
To address differences concerning tariffs and duties, China structured the Closer Economic and Partnership Arrangement (CEPA) with Hong Kong and Macao. These CEPA agreements provide a number of incentives for businesses from each Special Administrative Region to invest in mainland China, irrespective of beneficial ownership. These include permitting fast-track investment into industry sectors in China still restricted to foreign investors, as well as large service industry concessions.
A qualifying period and minimal tax contribute requirements are essential in either Hong Kong or Macao.
CEPA regulations allow foreign businesses to acquire a Hong Kong business and utilize it to participate in markets that are subject to restrictions on total foreign ownership in mainland China in some industries (primarily the services sector).
China-Singapore FTA
Under the China-Singapore FTA, the two countries accelerated the liberalization of trade in goods based on the Agreement on Trade in Goods of the China-ASEAN FTA. However, the Singapore agreement goes beyond the China-ASEAN FTA in liberalizing trade in services between the two countries. Singapore investors should examine both the China-ASEAN FTA and the China-Singapore FTA to fully comprehend the numerous benefits available to them under these respective agreements with China.
China-Republic of Korea (ROK) FTA
The China-ROK FTA aims to further expand bilateral trade and two-way investment, improve trade facilitation levels, and increase the predictability and transparency of two-way investment. It also strives to promote free flow of goods, capital, and personnel between China and ROK, and create an easier, opener, and fairer trade and investment environment.
Bilateral Investment agreements (BITs)
China currently has a total of 107 BITs in force - including Austria, the Belgium-Luxembourg Economic Union, Canada, France, Germany, Italy, Japan, South Korea, Spain, Thailand, and the United Kingdom. Another 17 BITs are under negotiation.
BITs are signed between two countries or regions that set out terms and regulations for private investors in the partner country.
China’s bilateral trade agreements seek to promote and facilitate bilateral foreign investment by protecting foreign investors from unfair treatment in the host country. This helps ensure they can enjoy the same rights as domestic investors for the scope of investments detailed in the agreement.
Countries/Regions Having BITs with China (as of March 2022) |
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Algeria |
Mali |
Argentina |
Guyana |
Cameroon |
Mauritius |
Barbados |
Jamaica |
Cape Verde |
Morocco |
Bolivia |
Mexico |
Democratic Republic of Congo |
Mozambique |
Canada |
Peru |
Egypt |
Nigeria |
Chile |
Trinidad and Tobago |
Ethiopia |
South Africa |
Colombia |
Uruguay |
Equatorial Guinea |
Sudan |
Cuba |
Papua New Guinea |
Gabon |
Tanzania |
Australia |
Lithuania |
Ghana |
Tunisia |
New Zealand |
Macedonia |
Madagascar |
Zimbabwe |
Albania |
Malta |
Armenia |
North Korea |
Austria |
Moldova |
Azerbaijan |
Oman |
Belarus |
Netherlands |
Bahrain |
Pakistan |
Belgium/Luxembourg |
Norway |
Bangladesh |
Philippines |
Bosnia and Herzegovina |
Poland |
Cambodia |
Qatar |
Bulgaria |
Portugal |
Georgia |
Saudi Arabia |
Croatia |
Romania |
Iran |
South Korea |
Cyprus |
Russia |
Israel |
Sri Lanka |
Czech Republic |
Serbia |
Japan |
Syria |
Denmark |
Slovakia |
Kazakhstan |
Tajikistan |
Estonia |
Slovenia |
Kuwait |
Thailand |
Finland |
Spain |
Kyrgyzstan |
Turkey |
Germany |
Sweden |
Laos |
Turkmenistan |
Greece |
Switzerland |
Lebanon |
United Arab Emirates |
Hungary |
United Kingdom |
Malaysia |
Uzbekistan |
Iceland |
Ukraine |
Mongolia |
Vietnam |
Italy |
|
Myanmar |
Yemen |
Latvia |
Double Tax Avoidance agreements (DTAs)
Double Tax Avoidance Agreements treaties effectively eliminate double taxation by identifying exemptions or reducing the amount of taxes payable in China.
Global investors often find themselves in an unfavorable position of having to face being double taxed – taxed by two different countries on the same income – unless there is a double tax avoidance agreement in places. For example, a company might be subject to taxes in its country of residence and also in the countries where it raises income through foreign investments for the provision of goods and services.
It is therefore extremely worthwhile for foreign investors to be aware of which double taxation avoidance agreements (DTAs) between China and other countries might be applicable to their situation, as well as understand how these agreements are applied.
As of 2022, China has signed DTAs with 110 countries or regions.