China-Japan-ROK cooperation

III.

Economy, trade and finance cooperation

1. Trade and investment

China-Japan-ROK economic cooperation and trade have gained remarkable achievements. Trilateral trade increased by more than four times from US$130 billion in 1999 to US$690 billion in 2011. China has topped the trading partners' list of Japan and the ROK for many years, while Japan and the ROK rank the fourth and sixth place among China's trading partners respectively. Japan and the ROK have become important sources of foreign investment for China. By the end of 2011, direct investment from Japan and the ROK to China had amounted to US$80 billion and US$50 billion respectively.

Trilateral Economic and Trade Ministers' Meeting provides an important platform for advancing economic cooperation and trade among the three countries. The First Trilateral Economic and Trade Ministers' Meeting was held in Brunei in September 2002. The meeting, in principle, takes place every year. Since May 2010, the Trilateral Economic and Trade Ministers' Meeting has been held in rotation among the three countries. Eight Trilateral Economic and Trade Ministers' Meetings have been held to date. China will host the ninth meeting in May this year.

At the end of 2002, upon the Chinese proposal, the leaders of the three countries agreed to start the feasibility study on a China-Japan-ROK Free Trade Area. From 2003 to 2009, research institutions of the three countries conducted a comprehensive study on the impact of the free trade area on their respective industries and came up with a common policy proposal. The study showed that the establishment of a trilateral free trade area could remove trade barriers, expand intra-regional market, facilitate trilateral economic integration and promote mutual benefit among the three countries. In October 2009, a consensus was reached at the Trilateral Summit Meeting to launch as early as possible a joint study on China-Japan-ROK Free Trade Area among government officials, business and academic communities. In May 2010, the joint study on China-Japan-ROK Free Trade Area was officially launched. Through the concerted efforts of the three countries, the joint study group completed its work in December 2011, and issued a joint statement. The three countries are now consulting with each other for the early launch of negotiations for the free trade area.

In accordance with the Joint Declaration on the Promotion of Tripartite Cooperation (2003), the relevant government departments of the three countries conducted several rounds of studies and consultations for the conclusion of the Trilateral Investment Agreement starting from 2004, and launched negotiations for the investment agreement in 2007. The three countries have already conducted 13 rounds of negotiations, and reached consensus on the text of the investment agreement, which is expected to be officially signed soon.

The Yellow Sea Rim Economic and Technological Conference was officially launched in 2001. It is the only sub-regional cooperation mechanism involving the government, economic groups, companies, universities and research institutions of the three countries with the aim of developing proposals for cooperation in trade, investment, science and technology among relevant regions of the three countries. The conference is held annually in rotation among the three countries. The 12th conference will be held in Lianyungang, Jiangsu Province, China in September this year.

China-Japan-ROK Engineering Business Roundtable, which is attended by industrial organizations and enterprises on engineering contracting, aims to enhance trilateral exchanges and cooperation in engineering contracting and related fields. The first roundtable meeting was held in Tokyo in October 2011, and adopted a joint statement. The second roundtable meeting will be held in the latter half of 2012.

China-Japan-ROK Business Summit, which is co-sponsored by China Council for the Promotion of International Trade, Nippon Keidanren and the Federation of Korean Industries, has been held in conjunction with the Trilateral Summit Meeting since 2009. At the end of each business summit held so far, a joint declaration was issued to offer the views and policy recommendations of the business community for the leaders of the three countries on the future development of trilateral cooperation. As a side event of the Trilateral Summit Meeting, the business summit aims to create a good atmosphere for the leaders' meeting and build a platform for dialogue and exchanges among the business communities of the three countries as well as between the business community and the government.

2. Finance

China, Japan and the ROK have maintained close financial cooperation. After several years of development, trilateral financial cooperation has gradually established itself as a key driver for regional financial cooperation in East Asia. The trilateral dialogue and cooperation on finance is centered around the finance ministers' meeting, and complemented by a number of supportive platforms, including finance ministry and central bank deputies' meetings, DG meetings, working-level meetings and seminars. The finance ministers of the three countries meet regularly every year (normally in conjunction with the 10+3 Finance Ministers' Meeting) to coordinate positions on specific initiatives for 10+3 financial cooperation and discuss financial issues of shared interest to the three countries. Finance ministry and central bank deputies, international department DGs and working-level officers of the three countries also meet on an ad hoc basis to discuss economic situation and regional financial cooperation, and make preparations for the annual finance ministers' meeting. Thanks to the commitment of the three countries, East Asian financial cooperation is making substantive headway with important progress in regional crisis support and prevention mechanism, Asian bond market and other areas. From 2012 onward, the Trilateral Finance Ministers' Meeting will be replaced by the Trilateral Finance Ministers and Central Bankers' Meeting.

Since 2011, in the face of the grave challenges to world economic recovery, the finance ministries of China, Japan and the ROK have further deepened coordination and collaboration. The three countries have coordinated positions within the framework of trilateral financial cooperation, mainly in the following areas: first, while improving the Chiang Mai Initiative Multilateralization (CMIM) regional crisis support mechanism, encourage CMIM to pick up the function of crisis prevention; second, further promote the development of the Asian Bond Markets Initiative (ABMI); third, facilitate the studies of future priorities for 10+3 financial cooperation. Progress has already been made in relevant studies.

Since 1996, the central bank governors of the three countries have met every year during their presence at international conferences. In December 2008, the central banks of the three countries issued a joint statement on the launch of annual Trilateral Central Bankers' Meeting, and three trilateral meetings have been held so far. The trilateral meetings have provided opportunities for the central bankers of the three countries to exchange views on their respective macroeconomic and financial situations, international and regional financial cooperation and other issues of common interest.

In addition, China, Japan and the ROK have maintained communication and cooperation in the International Monetary Fund (IMF), Bank for International Settlements (BIS) and other international organizations as well as regional frameworks like the Executives' Meeting of East Asia and Pacific Central Banks (EMEAP).

3. Transport and logistics

At the First China-Japan-Korea Ministerial Conference on Maritime Transport and Logistics held in Seoul in September 2006, the three countries signed a joint statement, in which they decided to establish the mechanism of China-Japan-ROK Ministerial Conference on Maritime Transport and Logistics, and hold the meetings in rotation among the three countries every two years. The Ministerial Conference also adopted 12 concrete action plans, including sharing information, removing physical barriers, conducting joint technical studies and enhancing port cooperation, and each country took up four action plans.

The Second China-Japan-ROK Ministerial Conference on Maritime Transport and Logistics held in Okayama, Japan in May 2008 adopted an action plan for future work, and identified three major goals for trilateral cooperation in transport and logistics: creating a seamless logistics system, developing environment-friendly logistics, and achieving a balance between logistics security and efficiency. A decision was made at the second ministerial conference to expand the areas of cooperation into aviation logistics and change the name of the mechanism into China-Japan-ROK Ministerial Conference on Transport and Logistics starting from the third conference.

At the Third China-Japan-ROK Ministerial Conference on Transport and Logistics held in Chengdu, China in May 2010, a joint statement was signed, which put forward the initiative of building a Northeast Asia logistics information service network. The Service network, NEAL-NET, was officially launched during the China-Japan-ROK Transport and Logistics Development Forum in December 2010. The organization of NEAL-NET includes the steering committee, council and secretariat. The NEAL-NET secretariat is located in Hangzhou, China. The interface for logistics information sharing among the three countries is now fully functional. The pilot ports of the three countries, i.e., the Ningbo-Zhoushan Port of China, the Tokyo-Yokohama Port of Japan and the Busan Port of the ROK, are to share dynamic container vessel status information.

The Fourth Ministerial Conference will be held in Busan, the ROK in July 2012.

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