North-South Interactions in the East Asian Regional Cooperation

Feng Xingyan & Jiang Ruiping

North-South Interactions in the East Asian Regional Cooperation

Feng Xingyan & Jiang Ruiping

As one of the most dynamic economies in the world since the mid-1990s, East Asia has boosted its regional cooperation by the coexistence of multi-level and multi-framework cooperation mechanisms with the ASEAN as the core. While the overall quality of East Asian regional cooperation has been substantially enhanced, the unbalanced situation of “dynamic South vs. sluggish North” is taking shape; that is, relatively high-level mechanisms has been established with the promising progress of regional cooperation in Southeast Asia while in the Northeast Asia—cooperation among China, Japan and the ROK is facing enormous obstacles. It was not until 2008 that cooperation among the three countries began to gather momentum and gain fast development. With China-Japan-ROK cooperation being deepened and broadened, how to achieve effective interactions between Southeast Asia and Northeast Asia will be the crux to making a breakthrough in East Asian regional cooperation.

I. The Structure and Problems of East Asian Regional Cooperation

For quite some time, the internal collaboration among SoutheastAsian countries had been the main feature of East Asian regional cooperation. However, the outbreak of 1997 Asian financial crisis made the East Asian countries realize the necessity of establishing a cooperation mechanism in order to jointly respond to the crisis. Since then, the East Asian regional cooperation has stepped into a rapid-developing stage. Initiated by ASEAN, a cooperation mechanism of ASEAN Plus Three (China, South Korea and Japan) was established. In the framework of ASEAN Plus Three, China, Japan and the ROK have separately set up meeting mechanisms with ASEAN and thus, a structure of multiple cooperation mechanisms is taking shape with the coexistence of ASEAN, three mechanisms of ASEAN Plus One (China, Japan, and the ROK respectively), China-Japan-ROK Cooperation mechanism and ASEAN Plus Three mechanism.

However, in advancing the East Asian regional cooperation, there appears distinct imbalance in the integration process between Southeast Asia and Northeast Asia, resulting in a situation of “dynamic South vs. sluggish North”.

There exists distinct imbalance in the integration process between Southeast Asia and Northeast Asia.

On the one hand, Southeast Asian regional cooperation has been institutionalized and increasingly broadened and deepened. Since 1967, ASEAN has evolved into a regional cooperation organization with economic cooperation as the foundation which integrates the economy, politics and security of member states. Promoted by this unified regional cooperation organization, the political relations among Southeast Asian countries have been shifted from confrontation to cooperation; and with economic cooperation being strengthened and the ASEAN Free Trade Area being founded, a great ASEAN market is built up and an ASEAN Community is expected to be established by 2015.

On the other hand, regional cooperation in Northeast Asia significantly lags behind ASEAN. The lack of mutual political trust sets severe obstacles to the advancing of Northeast Asian regional cooperation. Up to now, without any form of bilateral FTA being established, institutional cooperation among China, Japan and the ROK is relatively tardy. Only an unbinding agreement has been signed in the Asia-Pacific Trade Agreement by China and the ROK but is limited in fields and depth. In addition to historical reasons, institutions and disparity in development level also play a role in the inertia.

In terms of historical issues, China and the ROK hold different perceptions from Japan. In 2005 the informal meeting among leaders of China, Japan and the ROK failed to be held on schedule due to the Japanese Prime Minister Junichiro Koizumi’s visit to the Yasukuni Shrine, which thwarted the process of East Asian cooperation. Territorial disputes between Japan and China and between Japan and the ROK still exist. In the meantime, although China has been reiterating its commitment to a peaceful development as a responsible major power, Japan still holds a grudge against China, which is one of the most critical obstacles to the full-scale development of East Asia regional cooperation.

II. The Increasing Perfection of ASEAN-led East Asian Regional Cooperation

As an active initiator and leader in East Asian regional cooperation, ASEAN has gained prevalent recognition and support from East Asian countries for its leading position, which can be demonstrated in the mechanism building of ASEAN Plus One (10+1) and ASEAN Plus Three (10+3) in 1999 and in the launch of East Asian Summit (EAS) mechanism in 2005. At the same time, ASEAN’s integration process has been presented as an exemplar and a model for East Asian regional cooperation.

1. ASEAN is stepping up its integration efforts.

At the 9th ASEAN Summit in 2003, the ASEAN leaders resolved that an ASEAN Community shall be established. In 2007“the Cebu Declaration on Promotion of the Foundation of ASEAN Community” was adopted at the Cebu ASEAN Summit which stressed that the strengthening of ASEAN integration through the accelerated establishment of an ASEAN Community will reinforce ASEAN's centrality and role as the driving force in charting the evolving regional architecture. “The Charter of the Southeast Asian Nations” which came into effect on December 15, 2008, provides legal status and institutional framework for ASEAN to achieve the ASEAN Community. The ASEAN Community is comprised of three pillars, namely the ASEAN Political-Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community, to jointly respond to future challenges. In 2009, leaders of ASEAN countries signed the “Declaration on the Roadmap for an ASEAN Community (2009-2015)” and other documents concerning ASEAN political-security, economy, socio-culture blueprint at the 14th ASEAN Summit, marking a more specific and substantive stage of ASEAN Community building. The signing of the “ASEAN Trade on Goods Agreement”and the “ASEAN Comprehensive Investment Agreement” and the implementation of “ASEAN Framework Agreement on Trade in Services” laid the foundation for the realization of the free flow of goods, services, investment and skilled workers by the year of 2015.

At the 17th ASEAN Summit in October 2010, leaders of member states discussed about what role ASEAN should play in the new international system and how ASEAN can maintain its leading and central position in regional affairs. After the summit, the “Master Plan on ASEAN Connectivity” which comprises more than 700 projects and plans with investment amounting to about US$38 million, was adopted to better circulate and integrate human resources, goods and services in the ASEAN region and to further consolidate ASEAN’s leading position in activating regional cooperation.

2. Bilateral relations of the ASEAN Plus One (10+1).

By dint of ASEAN Cooperation framework, ASEAN actively implements the equilibrium strategy among major powers and strengthens cooperation with China, Japan and the ROK by signing bilateral free trade agreements in order to firmly establish and consolidate its core position.

(1) ASEAN-China relations

ASEAN-China dialogue relations have been continuously deepening and developing, beginning with China’s participation in the 24th ASEAN Ministerial Meeting in 1991. Then the first ASEAN-China (ASEAN Plus One) Informal Summit was held in Kuala Lumpur in December 1997 and in 2003 China joined the“Treaty of Amity and Cooperation in Southeast Asia” which signaled the establishment of the strategic partnership for peace and prosperity.

At present, ASEAN-China relations boast the most fruitful one among multiple ASEAN-centered ASEAN Plus One relations. In 2008 China designated its first ASEAN ambassador to demonstrate China’s political willingness to promote ASEAN-China cooperation in various fields and its support for ASEAN Community building and the advance in ASEAN integration. A relatively comprehensive dialogue and cooperation mechanism has been established comprising leaders’ summit, ministerial meeting mechanisms, 5 working-level dialogue and cooperation mechanisms and 11 cooperation projects in key areas. Economic cooperation is one of the most significant aspects in ASEANChina relations. In April 2009, Chinese government announced a range of measures and proposals, such as setting up the US$10 billion ASEAN-China Investment Cooperation Funds, providing ASEAN member countries with US$15 billion loan and offering underdeveloped ASEAN member countries with RMB2.7 billion special aid. In order to jointly implement the second Five-year Action Plan (2011-2015), Premier Wen Jiabao put forward proposals concerning six aspects with the purpose of pushing ASEAN-China Cooperation to take the lead in East Asian regional cooperation. The proposals containing promoting sustainable, balanced and strong growth in ASEAN-China economy and trade, initially setting up a connectivity network, advancing the opening up and integration of financial market step by step, expanding regional agricultural-economy cooperation, intensifying investment in sustainable development, and further strengthening mutual understanding and friendship. Moreover, China will add US$17 million to the Asian Regional Cooperation Funds to further promote regional cooperation.

On January 1st, 2010, the construction of ASEAN-China FTA was completed, which is another remarkable landmark in the history of ASEAN-China relations and a major event in the East Asian economic integration process. Since then, tariffs on around 90% of products exchanged between China and the ASEAN countries have been virtually reduced to zero. China has reduced its average tariff rate for the ASEAN countries from 9.8% to 0.1%, and 6 old ASEAN member countries, namely Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand have also reduced their average tariff rates from 12.8% to 0.6%. According to the statistics of Chinese Ministry of Commerce, the bilateral trade from January to November 2010 has amounted to US$263 billion, increasing by 41% over the same period of the previous year. For the time being, ASEAN is China’s fourth biggest trade partner, fourth largest export destination and third largest source of imports; China has become ASEAN’s third largest trade partner. China’s investment in ASEAN from January to November 2010 is US$1.96 billion with the accumulative investment of US$10.8 billion; ASEAN has a total investment of US$ 5 billion in China from January to November 2010, growing 35% over the same period of the previous year with strong momentum.

(2) ASEAN-Japan relations

In December 1997 at the ASEAN Plus Three Summit, the ASEAN-Japan (ASEAN Plus One) meeting was simultaneously launched. Against the backdrop of the “ASEAN-China Framework Agreement for Comprehensive Economic Cooperation”being signed in 2002, leaders of ASEAN and Japan officially signed the “ASEAN-Japan Framework Agreement for Compre-hensive Economic Partnership” in November 2003. In December 2003, leaders of ten ASEAN member countries and Japan attended the ASEAN-Japan Commemorative Summit held in Tokyo where Japan announced to join “ASEAN’s Treaty of Amity and Cooperation” (TAC), as a result ASEAN-Japan partnership has further strengthened. At the 2005 ASEAN-Japan Summit, ASEAN proposed that Japan sign Comprehensive Economic Partnership Agreement with all ASEAN member countries. In 2007 both sides reached consensus on the signing of Comprehensive Economic Partnership Agreement and jointly promoting East Asian economic integration. Subsequently in April 2008, ASEAN and Japan officially signed the“ASEAN-Japan Comprehensive Economic Partnership” (AJCEP). And at the 13th ASEAN-Japan Summit in 2010, the two sides decided to take further actions to deepen the future-oriented dialogue partnership which comprises advancing bilateral economic and trading cooperation, implementing ASEAN-Japan Comprehensive Economy Partnership, and so on.

(3) ASEAN-ROK relations

The ASEAN-ROK dialogue relations have been continuously deepened and expanded since the first summit in 1997. The“Joint Declaration on Comprehensive Cooperation Partnership”was signed at the 8th ASEAN-ROK Summit in November 2004, which marked a new phase of the bilateral relations. The“ASEAN-ROK Plan of Action to Implement the Joint Declaration on Comprehensive Cooperation Partnership” was signed at the 9th ASEAN-ROK Summit in December 2005, covering politicalsecurity cooperation, comprehensive economic cooperation, bridging the development gap among ASEAN member countries and strengthening ASEAN competitiveness, etc.

Right after China and Japan successively held negotiations with ASEAN on free trade agreement, the Republic of Korea also made rapid strides in free trade negotiations with ASEAN. A set of agreements were signed one after another, including the “Framework Agreement on Comprehensive Economic Cooperation Among the Governments of the Member Countries of the ASEAN and the ROK” signed in 2005, the “Trade in Goods Agreement” in August 2006 and “Trade in Services Agreement” in November 2007. The official signing of the “ASEAN-Korea Investment Agreement” in June 2009 indicated that the Republic of Korea caught up from behind and became the first to complete free trade negotiations among many ASEAN+1 dialogue countries. The 13th ASEAN-Korea Summit witnessed the adoption of the“Joint Declaration on ASEAN-ROK Strategic Partnership for Peace and Prosperity” and its Action Plan which covers the period of 2011-2015. In the meantime, the ASEAN-ROK Comprehensive Partnership was agreed to be elevated to Strategic Partnership. Both sides have decided to earnestly implement relevant agreements in the framework of ASEAN-ROK FTA and have reiterated the target of US$150 billion bilateral trade by 2015. Up to the year of 2009, the ROK has become ASEAN’s fifth largest trade partners and ASEAN has been the ROK’s third largest trade partner with US$74.7 billion bilateral trade volume.

3. ASEAN’s leading position in ASEAN+3 and ASEAN+6 cooperation.

As the rotating presidency of ASEAN, Malaysia hosted the 2nd ASEAN Informal Summit in 1997, and it succeeded in launching the first ASEAN, China, Japan and the ROK Informal Summit. In general, the ASEAN+3 Summit is to be hosted by the rotating presidency at the same venue in the same duration with ASEAN Summit; and the agenda items and itinerary of ASEAN Informal Summit will be contingent on those of the ASEAN Summit.

The ASEAN 10+3 cooperation has gained substantial progress with a range of agreements issued in these years, such as the 1999 “Joint Statement on East Asia Cooperation”, the 2002“Report of the East Asia Study Group”, and the 2005 “Kuala Lumpur Declaration on the ASEAN Plus Three Summit”. In 2007 at the 11th ASEAN+3 Summit, the second “Joint Statement on East Asia Cooperation” and the “ASEAN Plus Three Cooperation Work Plan” were passed through. The said documents set forth the future direction for ASEAN+3 cooperation—continuing to support ASEAN in its integration efforts to achieve the ASEAN Community, and contributing to the building of an East Asian Community as a long-term goal—and emphasized that ASEAN’s leading role in regional cooperation and the ASEAN Plus Three Cooperation as the main channel should be maintained.

ASEAN has established its core and leading position in East Asian regional cooperation.

The East Asia Summit (ASEAN+6), initiated and promoted by ASEAN, is extended to countries beyond ASEAN+3. In April 2005, the ten ASEAN member countries brought forth requirements for joining EAS: 1) substantive political and economic relations with ASEAN; 2) dialogue partner of ASEAN; 3) having joined the“Treaty of Amity and Cooperation in Southeast Asia”. On December 14th, 2005, the first East Asian Summit was held in Kuala Lumpur in Malaysia. The summit passed through “Kuala Lumpur Declaration” which declared that the “efforts of the EAS to promote community building in this region will be consistent with and reinforce the realization of the ASEAN Community, and will form an integral part of the evolving regional architecture; and that the EAS will be convened regularly and will be hosted and chaired by an ASEAN Member Country that assumes the ASEAN Chairmanship and held back-to-back with the annual ASEAN Summit; and the modalities of the EAS will be reviewed by ASEAN and all other participating countries of the East Asia Summit”. The Russian Foreign Minister and the US Secretary of State were invited to the 5th EAS held in October 2010 as formal delegates. Russia and the United States are to join the EAS officially in 2011, thus a new regional cooperation architecture will take shape. By bringing in the US and Russia into the major power rivalry, ASEAN leaders anticipate to consolidate ASEAN’s leading position.

Anyhow, ASEAN has established its core and leading position in East Asian regional cooperation and more importantly, has gained prevalent recognition and support from East Asian countries. Indonesian foreign ministry official Makarim Wibisono pointed out that “if we don’t insist on being in the driver’s seat, ASEAN countries will only be the tools of big countries to advance their agenda”. However, there are several issues that require ASEAN’s attention，for example, the internal stability of ASEAN countries and coordination of relations between ASEAN countries, and better cooperation between ASEAN with major powers in East Asia and the US and Russia.

III. Establishment and Progress of China-Japan-ROK Cooperation Mechanism

1. China-Japan-ROK cooperation mechanism building.

The ASEAN+3 mechanism provided an opportunity to establish trilateral meeting mechanism for leaders of China, Japan and the ROK. Talks between the leaders of Japan, China and the ROK began with an informal breakfast meeting in Manila in November, 1999. At the 5th meeting in October, 2003, leaders of the three nations signed the “Joint Declaration on the Promotion of Tripartite Cooperation among China, Japan and South Korea”—a landmark in the deepening of trilateral cooperation. In January 2007, the 7th trilateral summit, which had been postponed due to the Japanese Yasukuni Shrine issue, was launched in Cebu, the Philippines, demonstrating the three nations’ political commitment to mutual-trust, amity and cooperation. At the 8th summit held in Singapore in the same year, leaders of the three nations agreed in principle to hold the summit in turn. And the tripartite meeting between China, Japan and the ROK outside the ASEAN framework took place for the first time on December 13, 2008, in Fukuoka, Japan. To this point, the regular tripartite meeting mechanism between China, Japan and the ROK was officially established.

In order to further strengthen communication and cooperation and to better maintain East Asian region’s economic and financial stability, based on the original dialogues, the three countries set up a three-way meeting mechanism for the central bank governors of Japan, China and the ROK in 2009, which was taken as the foundation for the launch of trilateral currency exchange. After the establishment of the three-way central bank governors’ meeting mechanism, the first meeting was held in July of the same year in Shenzhen city, China, with the purpose of strengthening cooperation in implementing macro-prudential policies, maintaining financial stability and promoting regional currency, etc. By June 2010, 16 ministerial meeting mechanisms have been built among the three countries.

Northeast Asian countries support ASEAN’s efforts in integration and ASEAN Community building.

In course of the regional cooperation, China, Japan and the ROK have jointly supported ASEAN’s efforts in integration and ASEAN Community building, actively joining ASEAN+3 cooperation and cooperation within the EAS framework. It was declared in the “Joint Statement for Tripartite Partnership”, which was signed at the first trilateral meetings between China, Japan and the ROK, that the “three countries will contribute to advancing wider regional cooperation frameworks such as ASEAN+3, EAS, ARF and APEC in a complementary and mutually reinforcing manner”.

2. The fresh progress in China-Japan-ROK cooperation.

In the event of the 2nd China-Japan-ROK Trilateral Summit held in Beijing in October 2009, the 3rd summit took place at the ROK’s Jeju Island on May 29, 2010. The “Trilateral Cooperation Vision 2020” and other three common papers were signed and issued, outlining the vision for developing relations among the three nations over the next decade, and strengthening momentum for holding the Trilateral Summit Meeting on a regular basis.

—Planning future strategic direction for the trilateral cooperation in the next decade. At the summit, the leaders have passed through the “Trilateral Cooperation Vision 2020” aiming at strengthening the next decade’s cooperation. Consensus has been reached on realizing common prosperity and elevating partnerships, and future direction and focus area of the cooperation among the three countries have been worked out, which will facilitate the three countries to further their trilateral relations and promote regional cooperation.

—Strengthening cooperation mechanism construction. After the establishment of Trilateral Cooperation Cyber Secretariat in 2009 with the purpose of improving trilateral cooperation, the Memorandum on the Establishment of the Trilateral Cooperation Secretariat among Governments of the People’s Republic of China, the Republic of Korea and Japan was signed at the summit which states that the Trilateral Cooperation Secretariat will be established in the Republic of Korea in 2011. The standing Secretariat will advance and consolidate the cooperative relations in an all-round manner among the three countries by providing support for the trilateral consultative mechanisms and by facilitating the exploration and implementation of cooperative projects. In addition, the Secretariat will explore the possibility of establishing the Trilateral Dialogue Mechanism on National Defense for the purpose of enhancing dialogue security, elevating police administration cooperation and promoting local government’s exchanges among the three countries.

—Advancing cooperation on standardization and technology innovation. Leaders of the three countries signed the “Joint Statement on Standards Cooperation”—a fresh starting point in the tripartite cooperation in the standardization. The three countries will take concerted efforts in promoting coordination and research on the regional standards of Northeast Asia, eliminating progressively technical barriers and advancing trade development, with a view to seeking fresh momentum for the economic growth in Northeast Asia. In terms of cooperation in technology and innovation, the “Joint Statement on Strengthening Science and Innovation Cooperation” was issued for the first time to reinforce cooperation in science and innovation.

—Discussing the establishment of China-Japan-ROK Free Trade Area. Leaders of China, Japan and the ROK decided to work closely together to ensure the joint study for a trilateral FTA by government officials, business and academic participants to be completed by 2012. The study was launched in 2002 and in the ensuing seven years research institutions of the three countries have conducted thorough and in-depth analysis on the feasibility of establishing China-Japan-ROK FTA. The research findings proved that the establishment of China-Japan-ROK FTA could eliminate trade barriers, expand regional market, promote economic integration of the three countries and realize a win-win situation for the three countries. At the 2nd Japan-China-ROK Trilateral Summit in October 2009, leaders of the three countries have reached consensus on accelerating the launch of the joint study for a trilateral FTA by government officials, business and academic participants. The first joint study meeting on FTA among Japan, China, and the ROK was held in May in Seoul, as scheduled; the 2nd joint study meeting would be held in Japan in September 2010, and the 3rd in China in December 2010. All these indicate that with many years’ prior preparation, the establishment of China-Japan-ROK FTA is now steered into the fast-track.

Besides, the three countries will step up efforts to promote trade facilitation and improve trade environment, make efforts towards concluding the Trilateral Investment Agreement and providing the necessary infrastructures to facilitate free movement of investment capital in the region, and endeavor to strengthen financial cooperation and effectiveness of the Chiang Mai Initiative Multilateralization (CMIM). Moreover, after the issue of China-Japan-ROK Joint Statement on Sustainable Development, the three countries will continue their efforts to promote cooperation in sustainable economy, shift the economic development modes, encourage and support environment-friendly economy and circular economy, and drive East Asian economy into a new round of growth.

3. The necessity and significance of China-Japan-ROKcooperation.

For quite some time, East Asian countries have been carrying out the export-oriented development strategy with economic growth heavily relied on external demand and export trade highly dependant on Euro-American markets. Statistics presented in World Economy Outlook published by the IMF shows that due to international financial crisis, the world economy witnessed negative growth in 2009 for the first time since World War Two and all major Euro-American developed countries have fallen into recession. The GDP growth rates in America and Euro-currency area are -3.2% and -2.4% respectively. And East Asian countries’external markets have severely withered. So the expansion of intra-East Asia regional markets by concluding regional trade agreements will have direct influence on East Asian countries’economic stability and development.

In addition to the drive by international economy, the ever-closer economic relationship among China, Japan and the ROK can also stand as proof for the irreversible trend of integration. Based on statistics released by the Chinese Ministry of Commerce, in 2009 China became Japan’s largest export market, accounting for 18.9% of Japan’s total exports, and South Korea became the third with 8.1%; while in 2004 the figures were 13.1% and 7.8% respectively. South Korea is a country depending heavily on intra-regional trade in Northeast Asia. In 2004, China succeeded America as the ROK’s biggest trade partner and the ROK’s export trade with China hit a record 20.5% of the ROK’s total trade; while in 1991 the figure being only 2.9%. And Japan is the ROK’s second largest source of import and the third largest export destination. Since 2006, Japan and the ROK have been China’s third and sixth largest trade partners with US$228.9 billion China-Japan trade and US$156.2 billion China-ROK trade.

The benefits brought about by China-Japan-ROK cooperation are not confined to the three participant countries: the tripartite cooperation will also spur the vitality of the regional development and advance the regional economic cooperation. In terms of economic scale, according to the IMF statistics, China, Japan and the ROK have obtained US$4.91 trillion, US$5.07 trillion and US$832.51billion in light of GDP, being the second, first and third largest economies in East Asian region. The aggregate GDP accounts for 88% of 13 East Asian countries’ GDP. In terms of trade volume, China, Japan and the ROK have separately gained US$2.2 trillion, US$1.13 trillion and US$684.4 million, accounting for 72% of East Asian region’s trade volume. China, Japan and the ROK are the most important capital sources in East Asia. The three countries’ foreign exchange reserve amounts to US$3.72 trillion, about 89% of the total of East Asia foreign trade reserve, in which China possesses US$2.399 trillion and Japan US$1.049 trillion, ranking the first and second in the world.

IV. How to Achieve North-South Interactions in the East Asian Region

In the East Asian regional cooperation which is compared to an automobile, ASEAN acts as the driver and China, Japan and South Korea play the role of motor. Thus how to realize fruitful interactions among China, Japan and South Korea would be the key to making a breakthrough in advancing East Asian regional cooperation.

1. Taking advantage of China-Japan-ROK cooperation to promote East Asian regional cooperation.

Firstly, the establishment of China-Japan-ROK cooperation mechanism can complement, promote and support East Asian regional cooperation whose structure can be better balanced. Though there are multiple frameworks in East Asian regional cooperation and China, Japan and the ROK have separately established 10+1 meeting mechanisms with ASEAN. But China, Japan and the ROK are still lacking in cooperation mechanism framework. Not until 2008 was the first trilateral meeting between China, Japan and South Korea held in Fukuoka, Japan. And it was agreed that the three countries will host the trilateral meeting by turns in future. Thus in terms of content and form, the trilateral meeting has become a self-contained small scale multi-lateral mechanism. Nevertheless, the organizational independence did not indicate the mechanism’s diversion from East Asian Regionalism. Quite on the contrary, China, Japan and the ROK have been committed to advancing wider regional cooperation frameworks such as ASEAN+3, EAS, ARF and APEC and the three countries have been an integral part of East Asian regional cooperation. In the meantime, partnerships among China, Japan and the ROK, especially the China-ROK relations and China-Japan relations, have been elevated to strategic partnerships. And the three countries have reached more and more consensus on East Asian Community building. In this scenario, frictions and anxieties generated in the East Asian regional cooperation would be mitigated to some extent which is critical to the advancing of East Asian cooperation.

Secondly, taking advantage of China-Japan-ROK cooperation to strengthen the momentum and centripetal force of East Asian regional cooperation.

China, Japan and the ROK have enormous economic aggregate and act as the main force in East Asian economy with regard to technology level, financial strength, foreign exchange reserve, and etc; thus, they are capable of promoting regional cooperation. The strengthening of cooperation and trilateral interactions among China, Japan and the ROK could offset the ASEAN’s economic weakness and give a great impetus to the East Asian cooperation as a whole, augmenting the motor power of the East Asian regional cooperation. In particular, there are broad prospects for China-Japan-ROK cooperation in fields of green economy, low-carbon technique, environment-protection industry, and etc. These new cooperation projects will undoubtedly bring about positive influence on the adjustment of trade structure and the elevation of cooperation level, and help maintain the three countries’ economic growth or recovery momentum. Moreover, new impetus can be added to East Asian cooperation and sustainable development. The long-waited China-Japan-ROK FTA has entered into the stage of joint study by government officials, business and academic participants with anticipatory outlook. By forming a stable intra-regional market, East Asian countries’ dependence on external markets such as the Euro-American market could be reduced and the centripetal force and cohesive force of East Asian cooperation could be strengthened.

Finally, taking advantage of China-Japan-ROK cooperation to further boost East Asian financial cooperation. In the wake of the Asian financial crisis, East Asian countries began to take into account the establishment of the financial system in East Asia in order to avoid risks in global financial market. This project can not be completed without the financial cooperation of China, Japan and the ROK. In the 10+3 framework, the financial cooperation of China, Japan and the ROK with ASEAN has reaped remarkable achievements. And the joint efforts of the three countries are yielding increasingly significant influence under the Chiang Mai Initiative, which could be demonstrated by the latest achievement in implementing the initiative – the funding ratio in the Asian foreign exchange reserves: the three countries’ collective funding amounts to 80% of the total US$120 billion regional foreign exchange reserves while the ten ASEAN member countries only hold the rest 20%. The establishment of the regional foreign exchange reserves has not only integrate East Asia’s financial resources, but also improved East Asia’s capability to jointly respond to the financial crisis, which is helpful to maintain the steady growth of the regional economy. The deepening of China-Japan-ROK cooperation can enhance the effectiveness of the Chiang Mai Initiative Multilateralization, strengthen the regional economy monitoring mechanism, advance Asia’s bond market construction and make more remarkable contributions to the financial cooperation in East Asia.

2. Supporting ASEAN integration efforts and promoting East Asian regional cooperation

Currently, ASEAN is facing various challenges in keeping its leading position in East Asian regional cooperation. ASEAN has played a core role in advancing East Asian cooperation in the early stage. All regional cooperation mechanisms proposed by ASEAN surrounded the ASEAN integration. However, with the increase of the ASEAN-centered regional mechanisms, ASEAN’s leading role began to be decentralized, especially when the United States and Russia officially attend the EAS in 2011 which will further change the architecture of the EAS. Moreover, the ASEAN member countries are encountering various thorny problems. The heating up of the Myanmar issue once again and the fall of Thailand into long period of political turmoil etc have pushed ASEAN into a developing predicament which will restrict ASEAN’s leading role in East Asian regional cooperation.

ASEAN acts as a platform for the realization of Northeast Asian cooperation.

Nevertheless, China-Japan-ROK cooperation can not be separated from ASEAN-led regional cooperation mechanism. In terms of East Asian regional cooperation process, ASEAN serves as a platform for the realization of China-Japan-ROK cooperation. Despite its inevitability and necessity, the China-Japan-ROK cooperation is facing many insurmountable obstacles at present. China, Japan and the ROK, by cooperating separately with ASEAN, have not only obtained their respective national interests, but also reached consensus on many cooperation projects which are conducted through cooperation with ASEAN. These projects are not likely to be accomplished through bilateral negotiations among these three countries. What’s more, the improvement of ASEAN-Japan politico-security relations has, to some extent, brought about the enhancement of China-Japan politico-security relations which is of critical importance to East Asian economic cooperation.

Therefore, ASEAN needs to overcome current challenges and troubles as quickly as possible. At present, ASEAN is focusing on its integration process by strengthening the implementation of the“ASEAN Charter” and the “ASEAN Economic Community Blueprint”, to establish the ASEAN Community by the year 2015. The ASEAN Community which integrates 10 countries into one, can not only strengthen cohesion, “ASEAN awareness” and “sense of identity”, but also consolidate ASEAN’s leading position in East Asian regional integration process. China, Japan and the ROK should actively participate in the ASEAN Community construction and the integration process, promote “the Master Plan on ASEAN Connectivity”, strengthen sub-regional cooperation such as the Greater Mekong Region, Brunei Darussalam Indonesia Malaysia the Philippines—East Asean Growth Area (BIMP-EAGA), and etc, help ASEAN narrow the development gap and promote ASEAN Community construction. In addition, China-Japan-ROK cooperation can boost the vitality of ASEAN economic development and stabilize intra-regional economic and political situation; in the meanwhile, the three countries should further deepen economic cooperation with ASEAN, intensify relations with ASEAN, and help develop the ASEAN Plus Three bilateral FTA into a multi-lateral FTA covering the whole region to provide vast market space for ASEAN.

3. China’s constructive role in East Asian regional cooperation

East Asia is of critical importance to China. Based on East Asian regional production network, China has become an integral part of East Asian regional economy. Against the backdrop of East Asian regional cooperation mechanism being further deepened and developed, China has proposed and is practicing the policy of“building friendship and partnership with neighboring countries”and the new principle of “building harmony, security and prosperity with neighboring countries”.

For other East Asian countries, they are facing the dilemma when dealing with relations with a fast-developing China. They anticipate China’s participation in regional cooperation, but are concerned that China would dominate regional cooperation affairs. Although such concern is unnecessary, it is a realistic issue China has to confront when participating in East Asian regional cooperation.

In light of the feature of diversity in East Asian region, China advocates retaining the current mechanism as the platform, complementing one mechanism’s weakness with others’ strength and making joint efforts to promote regional cooperation on the principles of reaching consensus through consultation, advancing step by step, trying the easy things first, and keeping open and tolerant, etc. China appreciates ASEAN’s stance of sticking to the predetermined direction, principles and tasks in East Asian cooperation and support ASEAN Community construction and ASEAN’s leading role. As for the enlargement trend of EAS, China endorses the choices of other member countries, while insisting in taking the cooperation between ASEAN and China, Japan and the ROK as the main channel. China should actively participate in and promote China-Japan-ROK cooperation, strengthen communication and coordination with Japan and the ROK, enhance mutual political trust, and maintain the peace and stability in Northeast; at the same time, China should strive to play a bigger role in East Asian regional cooperation. Particularly, at a time when the world economic recovery is still facing many uncertainties, China’s endeavor to keep the momentum of economic recovery or upturn will bring about favorable conditions for the economic stability, recovery and sustainable development within the region, and add strong impetus to East Asian regional cooperation.

Feng Xingyan is Ph.D and Lecturer in Department of International Economics of China Foreign Affairs University

Jiang Ruiping is Professor in Department of International Economics of China Foreign Affairs University.