RCEP Trade Tracker 2024: Four Key Insights on Regional Trade Trends

The Regional Comprehensive Economic Partnership (RCEP) remains a key player in shaping Asia-Pacific trade dynamics. As the largest free trade agreement, RCEP integrates 15 member countries, including China, Japan, South Korea, Australia, and the 10 ASEAN nations, fostering tariff reductions, supply chain integration, and economic cooperation.

Based on the AGI RCEP Trade Tracker, this report presents a comparative analysis of trade performance from Q1 2020 to Q3 2024, ensuring a consistent, apples-to-apples comparison of trade trends across years. The analysis reveals several critical trends shaping RCEP’s trade dynamics:

• China’s Trade Dynamics: China remains the dominant exporter within RCEP, but its trade growth has slowed. While exports to RCEP partners saw a modest recovery in 2024 after a 2023 decline, overall momentum has weakened.
• Japan’s Trade Shifts: Japan’s trade with RCEP stabilized but contracted in 2024 as it diversified supply chains, strengthening ties with Vietnam and Malaysia while reducing reliance on China.

• Resilient Intra-ASEAN Trade: Intra-ASEAN trade has shown strong resilience, rebounding by 7.03% in 2024 after a 13.3% decline in 2023, reflecting robust regional integration and economic recovery.

• Growing Trade Beyond RCEP: RCEP economies are increasingly trading with non-member countries, with trade expanding by 5% in 2024 to reach $3.37 trillion, outpacing intra-RCEP trade growth.

Fact 1: China’s Trade with RCEP Grows but Shows Slower Expansion Compared to 2021-2023

China remains the dominant exporter within RCEP, with total exports to its regional partners reaching $2.76 billion in Q1–Q3 2024. The 3.6% increase in 2024 marks a cautious recovery after an 8.5% in the year before. While the downturn in 2023 reflected global economic uncertainties and shifting supply chains, the modest rebound in 2024 suggests that China's trade with RCEP is stabilizing.

From 2020 to 2022, China's exports to RCEP surged as the region recovered from the pandemic. 2021 saw an impressive 24.9% growth, followed by another 13.8% expansion in 2022. However, the momentum slowed in 2023, with exports contracting by -8.5%, reflecting increased competition from ASEAN nations and global supply chain adjustments. The 3.6% uptick in 2024 indicates that while China remains a key driver of intra-RCEP trade, members in the region are becoming more self-sufficient.

A key trend defining 2024 is the continued decline in China’s exports to Japan, which fell by 1.94%, following a 5.1% drop in 2023. This suggests that Japan is actively diversifying its supply chains and reducing dependency on China. In contrast, Vietnam emerged as a major market. China’s exports to Vietnam increased by 12.7%, reversing the decline (-7.5%) in 2023. This reflects Vietnam’s deepening integration into global supply chains and its strong demand for Chinese goods. Exports to South Korea also showed a strong recovery, rising by 9.58% in 2024 after a decline (-11.5%) in 2023. The rebound in South Korea is mainly driven by renewed demand for industrial goods and electronics components.

In addition to these major economies, other ASEAN markets are also becoming increasingly significant for China. Laos (+17.7%), Cambodia (+14.6%), and Vietnam (+12.7%) recorded the highest export growth rates in 2024, reflecting stronger intra-regional trade flows, while Singapore (+6.1%), Thailand (+6.0%), and Indonesia (+0.3%) maintained moderate growth. On the other hand, exports to Australia slipped by 7.47%, and exports to Myanmar experienced a sharp contraction (-17.6%), likely a result of political instability and weaker demand.

Fact 2: Japan’s Trade with RCEP is Stabilizing After Post-Pandemic Volatility

Japan's trade relations with RCEP countries have undergone a notable transformation since 2020, characterized by fluctuating patterns of substantial growth and significant declines. After a remarkable 23.2% surge in Japan’s exports to RCEP countries in 2021, the momentum quickly faded. By 2023, total exports had plunged by 13.3%, and the downward trend continued in 2024 with a 3.5% contraction, which suggests a cooling down of demand.

One of the most striking shifts is Japan’s evolving relationship with ASEAN markets. The Vietnamese and Malaysian markets have shown their resilience, with Japan’s exports to these two markets growing with stability, as compared to the sharp 11.8% decline in exports to Thailand and the 12.9% drop to Indonesia. Japan’s trade with the Philippines, which had suffered a staggering 19.1% contraction in 2023, has shown signs of stabilization, albeit still experiencing a 2.6% decline in 2024. These contrasting trends indicate a strategic realignment of Japan’s supply chains, favoring Vietnam and Malaysia as rising trade hubs while trade with Thailand and Indonesia weakens, which is due to Vietnam and Malaysia’s strong manufacturing sectors, lower costs, and strategic trade agreements (CPTPP, RCEP), which support Japan’s China+1 strategy for supply chain diversification. In contrast, Thailand and Indonesia face higher costs, political uncertainties, and slower economic recovery, making them less competitive for Japanese exports.

Central to these changes is Japan's progressive disengagement from China. In 2020, China represented 48% of Japan's overall exports to RCEP countries, highlighting its position as Japan's primary trading partner within the region. However, by 2023, this figure had slipped to 41.7%, signaling Japan’s efforts to diversify its export base. Interestingly, in 2024, China's proportion rebounded marginally to 42.8%, underscoring China's indispensable position despite Japan's endeavors to redirect its trade dynamics.

Fact 3: Intra-ASEAN Trade Continues to Strengthen, Outpacing RCEP Growth

Intra-ASEAN trade has shown significant fluctuations over the years, with strong growth in 2021 and 2022, followed by a contraction in 2023, and a moderate recovery in 2024. In 2023, intra-ASEAN trade declined by 13.3%, mirroring a slowdown in global trade, supply chain disruptions, and possibly weaker domestic demand in key ASEAN economies. Despite this setback, 2024 showed signs of stabilization, with intra-ASEAN trade increasing by 7.03%, signaling a cautious recovery.

Compared to overall RCEP trade, intra-ASEAN trade outpaced intra-RCEP trade in both 2021 and 2022. In 2022, intra-ASEAN trade grew twice as much as intra-RCEP trade, which highlights the strong integration of ASEAN. The contraction in 2023 affected both intra-ASEAN (-13.3%) and overall RCEP trade (-9.38%), but the recovery in 2024 was more pronounced for intra-ASEAN trade (7.03%), suggesting that ASEAN regional trade dynamics remain strong despite external challenges.

Vietnam’s exports to ASEAN followed a similar trend, recording a 23.60% increase in 2021 and a 26.15% rise in 2022, showcasing its growing importance in ASEAN supply chains. However, in 2023, Vietnam’s exports to other ASEAN countries declined by 7.63%. The 3.92% recovery in 2024 indicates a stabilizing trade environment, though at a slower pace than previous years.

Indonesia’s trade with Malaysia and Singapore has exhibited particularly volatile trends. In 2021, trade between these partners surged by 21.16%, and in 2022, Indonesia saw an even more dramatic 39.57% increase in trade with Malaysia and Singapore, reflecting strong integration in regional supply chains. However, 2023 saw a sharp decline of 18.60% in trade between the three partners, followed by a further 7.99% drop in 2024. The continued downturn suggests that Indonesia’s trade relationship with these two partners may be facing challenges.

Thailand’s intra-ASEAN exports peaked in 2022 at $54.8 billion, but the exports then declined by 10.29% in 2023. Thailand’s exports rebounded in 2024 with a 5.51% growth, suggesting an increase in demand for Thai exports within ASEAN, possibly linked to increased investment and production activities in the region.

Fact 4: RCEP’s Trade with Non-Members Expands, Reflecting Global Market Strategies

Trade between RCEP members and non-member nations has exhibited a dynamic trajectory, featuring significant growth alongside occasional periods of deceleration. In the first three quarters of 2024, trade between RCEP countries and partners outside the bloc rose to $3.37 trillion, representing a 5% increase from 2023. The most significant growth occurred in 2021, with trade surging by almost 30% due to post-pandemic recovery and robust global demand. However, this momentum was briefly interrupted in 2023, as exports to non-RCEP partners declined by 7%, a reflection of global economic headwinds and tightening financial conditions. Despite this setback, 2024 marked a strong rebound, underscoring the resilience and adaptability of RCEP economies as they continue to strengthen their global trade networks.

South Korea has been a leading force in this expansion, with its exports to non-RCEP partners climbing to $289 billion in 2024. The post-pandemic boom in 2021 saw an extraordinary 30.62% increase in Korean exports to non-RCEP partners, signaling Korea’s deeper integration in the global market. Growth moderated in 2022 and slightly dropped in 2023. Yet, 2024 brought a powerful comeback, with exports surging by 12.82%.

Indonesia’s journey, however, has been more turbulent. The country experienced a trade boom in 2021 and 2022, with non-RCEP exports skyrocketing by 33.68% and 35.11%, respectively. 2023 was a turning point, as exports to non-RCEP partners plunged by 16.01%, reflecting weaker global demand, supply chain disruptions, and potential shifts in trade policies. While 2024 saw a minor recovery of 3.14%, which suggests that Indonesia is still navigating external challenges and working to regain momentum in global markets.

Overall, the data paints a compelling picture of RCEP’s expanding global footprint. While intra-RCEP trade remains a vital driver of economic integration, member nations are actively diversifying their trade partnerships beyond the bloc. South Korea’s rapid recovery in 2024 signals a strong resurgence in global demand, while Indonesia’s performance suggests a more cautious rebuilding phase. The broader trend is clear: RCEP economies are not just regional powerhouses; they are increasingly shaping the global trade landscape.