Bid to unleash region's vitality
Updated: 2012-05-15 13:21
By Wang Yuzhu (China Daily)
Deepening cooperation of China, Japan and the ROK is a further step toward integration of East Asia
The deepening cooperation between China, Japan and the Republic of Korea has drawn a great deal of attention worldwide. This is not only because their deepening cooperation is having a positive impact on their own economic development, but because with the US economic recovery sluggish and the European Union struggling with its debt crisis, strengthening China-Japan-ROK cooperation will also have a positive effect on the overall performance of East Asia and the global economy.
Hence, the announcement by the leaders of China, Japan and the ROK on May 13 that talks focusing on a free-trade agreement (FTA) between the three countries will be launched within the year has been welcomed as a signal of the three countries' faith in tripartite cooperation.
The joint study on a China-Japan-ROK FTA, which was officially launched in May 2010 through the concerted efforts of the three countries, provides in-depth analysis of the positive significance of tripartite cooperation. It shows that further deepening trilateral cooperation, and establishing an FTA is the consensus of the three countries.
Previously, questions concerning investments have been an obstacle to the construction of a trilateral free trade agreement, but during the meeting a promotion, facilitation and protection of investment agreement was signed, removing this obstacle to a future FTA.
Economic interdependence among the three countries has taken shape based on trade and investment. According to the white paper titled China-Japan-ROK Cooperation (1999-2012), which was released by the Chinese government on May 9, trilateral trade increased from $130 billion in 1999 to $690 billion in 2011, and Japan and the ROK have become important sources of foreign investment for China. By the end of 2011, direct investment from Japan to China amounted to $80 billion and the direct investment from the ROK was $50 billion.
Through direct investment, Japan and the ROK have transferred a large number of industries to China; and the trade effects of this direct investment have made China the largest trading partner of Japan and the ROK.
However, despite their growing economic interdependency, the process toward establishing an FTA between the three countries has not gone as smoothly as envisaged. This is because of the difficulty of distributing the benefits among the three economies, as well as some other non-economic factors within each economy.
Therefore, although there is optimism about the prospects of establishing a trilateral FTA, it is clear that the negotiations will be a difficult and lengthy process. Some experts have said that the ROK intends to negotiate an FTA with China first and then a trilateral FTA.
It should be noted, however, that the scope of the trilateral cooperation is far more than building a free trade area and trilateral cooperation is not limited to the construction of an FTA.
In fact, despite the construction of an FTA being the main goal of trilateral cooperation for a long time, as the white paper highlighted the three countries have established a future-oriented comprehensive cooperative partnership in various fields, including ever closer economic, trade and financial cooperation, vibrant people-to-people and cultural exchanges, sustainable development and enhanced communication and coordination in regional and international affairs.
This is a comprehensive, pragmatic cooperation arrangement geared to the needs of a trilateral community. But its vision is broader than strengthening just trilateral cooperation and encompasses the integration of East Asia.
The author is a researcher with the Institute of Asia-Pacific Studies, Chinese Academy of Social Sciences.