China applies tariff differentials to RCEP partners/groups of partners. In addition to the separate Tariff Commitment Schedules for each partner/group of partners, in Annex I of the RCEP’s Full Text, China also has an additional Appendix regulating the list of goods which are subject to tariff differentials and must comply with additional rules of origin (in addition to the general rules of origin).

This means that imported goods on The List of Appendix not only have to meet the rules of origin prescribed for those goods (stated in Annex 3A - Product-specific rules of Chapter 3 on Rules of Origin) but also need to satisfy the "Additional Rules of Origin" stated in the Appendix.

Additional rules of origin of China

"Additional rules of origin" are regulated the same among RCEP members applying tariff differentials under the RCEP (including China). In particular, this rule requires that the value content of the exporting country (value of originating materials, labor, profits, etc.) must account for 20% or more of the total value of goods.

China applies "additional rules of origin" from year 1 (2022) onwards. For many products, the period for applying additional rule of origin is 15 years, then it is lifted (see detailed period for applying China's additional rules of origin in China's Appendix in Annex I).

Preferential Tariff Rate

- If the goods meet both condition (i) and (ii):

(i) The goods are significantly processed in the exporting country where the goods are produced entirely from materials originating from RCEP members (only minimal processing steps – as specified in the Agreement – ​​are carried out in other member countries, if any); and

(ii) The goods meet the "Additional rules of origin" as specified in the Appendix of China's Tariff Schedule.

In this case, the applicable preferential tariff rate is the tariff rate that China grants to the RCEP exporting member.

- If the goods DO NOT MEET either of condition (i) and (ii):

In this case, preferential tariff rate will be the tariff rate imposed by China on the RCEP country contributing the highest value of originating materials used in the production of goods.

Source: Center for WTO and International Trade

Documents are attached below:

• Product Specific Rules
• Tariff Differentials of China

• China’s tariff commitments on imported goods under the RCEP
• China's origin certification mechanism under the RCEP
• China’s commitments on opening service market under the RCEP
• Opportunities from RCEP for exporting Vietnamese goods to China