In the years you have been practicing, how have you seen the international trade scene evolve?
Free-trade agreements shape significantly the international trade landscape for the last couple decades. With the majority of countries involved in bilateral and multilateral trade agreements, e.g. ASEAN Free Trade Area, NAFTA, EEA, APEC that are still functioning nowadays, tariffs are removed or reduced and services and goods become more accessible and affordable; enterprises enjoy more stable and safer environment for their investments; and the strength of international cooperation is evidenced as we see international organisations, such as WTO, have substantially contributed to international trading, leading to a remarkable and fruitful development of the global economics.
During its course, several features of international trade can be observed over the recent years. Developing countries in Asia and Latin America, including China, Mexico, India and Brazil, become important partners in global trades. There is also a rising trend in South-South trade, partially because of the changing of the international supply chains, as today a substantial share of the production processes of global supply chain is taking place in developing countries. The development of transportation in cost-saving and improving efficiency, as well as the emergence of e-commerce has created more opportunity for small and medium-sized businesses. It is not until the global economy recession since 2008 that the political support for international free trade started to weaken, shaping a different international trade landscape for today from the past scores.
How would you describe the current international trade landscape and what are the hottest talking points today?
Inequality in different personae (among countries, corporates, and social classes for example), but in fact all centring around the low-growth of world economics, has emerged into the main theme and call for the changes that may damage the international free trade nowadays.
Two illustrations can be provided: first, the fierce attack from the US President. President Trump pledges to bring corporate activities and manufacturing jobs back and to correct the unfairness the States has been suffered in various free trade agreements. He withdrew from Trans-Pacific Partnership, questioned the WTO, and called NAFTA ‘the worst trade deal in... the history of [the US].’ Second, Brexit. There are criticisms on the EU for UK’s immigrant policies, unemployment rates, and economical losses. However, leaving the EU disqualifies UK of the enjoyment of the EU's internal market, meaning potential increase in tariffs, administrative burdens, and financial costs of trades, as well as other non-tariffs barriers.
However, most countries are still determined to oppose protectionism and believe in free trade among countries. It appears to be the consensus of developing countries to support open trade based on global rules. For example, Eurasian Economic Union (EAEU), consist of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, is approaching Latin America countries such as Brazil, Bolivia, Nicaragua, for trading on aircrafts and others (e.g. energy-related projects). Some important members of EU also march to defend the idea—the four-year negotiation between the EU and Japan has finally reached an Economic Partnership Agreement recently. Also, as an important trading country, China will always be open to the outside world. In fact, in the 12th G20 Summit, Chinese president Xi Jinping just gave a speech to warrant China’s support to the multilateral trading system and an open global economy.
Which do you think is the most important country of 2018 for companies to be keeping their eyes on, in relation to trading opportunities?
After years of recession, 2018 still seems to be a year full of opportunities for international trading and investment for most of countries.
As an emerging market, though questions never cease, China’s growth and development is well-evidenced. China has the largest and fast growing consumer market, especially considering its increasing mid-class consumer. It is reported that the majority of China's total consumption has historically centred on essential items such as food, beverages, clothing and footwear. But going forward, higher spending is expected on cars, luxury goods, financial services and health, as average disposable income levels rise. China has been considering to reach free trade agreements with EU, Canada and other countries. In addition, a series of domestic policy changes, including industrial guiding policies, also herald China’s commitment to welcome and encourage international trades for companies. Therefore, China is expected to stay in the line of the most lucrative markets around the globe for the next decade.
Yunfeng Xing
Partner
www.broadbright.com
Mr. Yunfeng Xing, before he joined Broad & Bright Law Firm as Partner in 2016, and his performance as special advisor in Slaughter and May in 2015, had served in the Foreign Investment Management Department of MOFCOM from 1995 to 2014. Mr. Xing was responsible for formulating the rules and policies concerning foreign investment and approval of establishment of the foreign investment companies, and he participated into the drafting and formulating of the Foreign Investment Law, the Catalogue for the Guidance of Foreign Investment Industries and the foreign acquisitions regulations. Mr. Xing also engaged in the establishment of national security review system for mergers involved foreign capital. Mr. Xing is proficient in foreign investment laws and regulations, and has a wealth of experience of anti-monopoly and outbound investment.
