Asian giants move closer together
Last week's summit of the three East Asian giants - China, Japan and South Korea - was a momentous occasion that could have huge economic implications. These close neighbours are not only the largest economies in East Asia but also second and third in the
In recent years, historical grievances and territorial disputes have caused strains between them and they hadn’t held summit talks for three years.
Last week was a diplomatic breakthrough, with Chinese Premier Li Keqiang and Japanese Prime Minister Shinzo Abe meeting for the first time in their current roles.
Probably the most significant development from the meeting was that they will accelerate plans for a trilateral free-trade zone, starting with the Sino-South Korean FTA, which is due to be implemented this year.
This would be the cornerstone of the Regional Comprehensive Economic Partnership, a common market covering the 10 countries of Asean and Australia, New Zealand and India.
To hasten economic integration, China, South Korea and Japan have scheduled meetings on such topics as ICT, transport and logistics, customs, and science and technology.
China’s Li has proposed combining China’s “Belt and Road” initiative with South Korea’s Eurasia initiative to further promote trade and connectivity within the region.
Li also sees synergies between South Korea’s strategy for boosting its creative economy and the “Made in China 2025” plan, and would like to cooperate with South Korea in establishing global supply chains with production facilities in other countries.
Combining the strengths of China, South Korea and Japan would certainly create a formidable global force. Already China is South Korea’s largest trading partner, while South Korea is China’s third-largest trading partner. Trade between the two countries has multiplied 60-fold over the past 20 years.
China and Japan are each other’s major trading partners, with many synergies between their industries.
These three are among the top-five trading partners of Asean, while China and Japan are the major investors in the region.
From a Thai point of view, a closer relationship among these three giants would be a very welcome development, as it would help to open up many economic opportunities as well as support a more peaceful region.
Let’s hope that the positive intentions expressed at the meeting come to fruition.
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