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Era of Asia

Alongside improving relations in Northeast and Southeast Asia, the regional integration of East Asia is speeding up

By NewsChina Updated Jun.5

After China’s new cabinet took office in March 2018, Chinese Premier Li Keqiang made his first overseas trips to two regional countries – Indonesia and Japan – with the aim of boosting regional cooperation in Asia amid rising international protectionism. 

Li visited Indonesia from May 6 to May 8 for the fifth anniversary of the establishment of the China-Indonesia Comprehensive Strategic Partnership and the 15th anniversary of the strategic partnership between China and the Association of Southeast Asian Nations (ASEAN). Following this, Li traveled to Tokyo to attend the seventh China-Japan-South Korea leaders’ summit. It was the first visit to Japan by a Chinese premier in eight years. 

Important Neighbors 

This year marks the 40th anniversary of the signing of the China-Japan Treaty of Peace and Friendship. On May 8, Li arrived in Japan where he met Japanese Emperor Akihito and Prime Minister Shinzo Abe. 

“China and Japan are mutually important neighbors. There are dozens of direct flights from Beijing to Tokyo each day with a flight time of only three hours. It took such a long time, however, to get bilateral friendly relations back on track,” Li wrote in the Japanese media before his visit. 

China-Japan ties have been strained in recent years. Since the two countries resumed normal diplomatic ties in 1972, observers have divided the China-Japan relationship into two phases: a period of rapid development from 1972 to 1992, and one of strategic friction after 1992. 

China overtook Japan as the world’s second-largest economy in 2010. China’s growing influence has seen it switch its balance of power with Japan. “Structural problems in the two countries are emerging on a number of issues, including the Taiwan issue and disputes over history and territory, leading to friction,” said Ruan Zongze, deputy director of the China Institute of International Studies. 

Ruan said that as the second- and-third largest economies in the world, direct dialogue between China and Japan will build a friendly and beneficial relationship between the two countries at a time when the Northeast Asian situation is in flux, and unilateralism and protectionism are jeopardizing the world trade system and economic growth. 
At a ceremony to mark the 40th anniversary of the signing of the China-Japan Treaty of Peace and Friendship, Premier Li said friendship and cooperation between China and Japan are beneficial to both, to the region, and to the world. The two countries forged agreements on innovation, high-tech industries, dialogue mechanisms, IP protection, healthcare and finance.  

Premier Li said China and Japan would sign an agreement for currency swaps to facilitate investment and said China has granted Japan a quota of 200 billion yuan (US$31b) to be used in the RMB Qualified Foreign Institutional Investors mechanism by Japanese investors. Li encouraged Japanese financial institutions to invest in the Chinese capital market and was positive about establishing a bank in Tokyo for yuan clearing.  

Song Yaoming, an economic and commercial counselor at the Chinese Embassy in Japan, said that with the improvement of China-Japan ties, bilateral economic cooperation will enter an upward trajectory and usher in a new era of bilateral economic and trade ties. 

Stronger Partnership 

This year marks the fifth anniversary of the establishment of the China-Indonesia Comprehensive Strategic Partnership, and the 15th anniversary of the China-ASEAN Strategic Partnership. On May 6, Premier Li Keqiang announced that China would expand its purchase of palm oil from Indonesia by 500,000 tons in 2018 after a discussion with Indonesian President Joko Widodo. He added in a keynote speech that China will never purposely chase a trade surplus and is willing to import more competitive products from Indonesia, including palm oil, gas, rubber and food products. 

According to Huang Rihan, assistant to the dean of the College of International Relations at Huaqiao University in Fujian Province, China’s growing imports of palm oil from Indonesia will increase employment and improve the livelihood of millions of rural people in Indonesia, which is a significant worldwide palm oil producer. 
During Li’s visit, China and Indonesia signed seven agreements, including enhancing cooperation on building Indonesia’s comprehensive economic corridors, and giving joint support to the high-speed train project that links Jakarta and Bandung. The two sides agreed to deepen cooperation on inter-connectivity of infrastructure under the framework of the Belt and Road Initiative and Indonesia’s Global Maritime Fulcrum.
Xu Liping, a researcher with the National Institute of International Strategy at the Chinese Academy of Social Sciences, told NewsChina that as large developing nations, China and Indonesia have similar national conditions. Both face the challenges of industrialization and modernity. They have found consensus in choosing their own development strategies and there is great potential for further cooperation.
Xu said the Jakarta-Bandung high-speed railway should be completed in three years, and will cut the trip between the two cities from three hours to 40 minutes. The high-speed railway is a pivotal project of the comprehensive cooperation between China and Indonesia, and China’s first overseas high-speed rail project. It will be an important pioneer in the Belt and Road Initiative in Indonesia and Southeastern Asia.  
More Trilateral Meetings 

On May 9, the seventh China-Japan-South Korea leaders’ meeting was held in Tokyo – the first of its kind for two and a half years. The three countries agreed to hold trilateral leaders’ meetings more regularly, and the next meeting will be hosted by China.  

The three East Asian nations, with a combined GDP of more than a fifth of the world’s total, reaffirmed their commitment to construct an open world economy and promote free trade, pledging to enhance sustainable development in various areas in the region and beyond by sharing their development experience. 

According to the joint declaration released at the summit, the three sides will deepen economic cooperation to boost free trade and investment in East Asia, vowing to work toward finalizing a comprehensive, high-level and mutually beneficial Trilateral Free Trade Agreement (FTA) and speed up negotiations on the Regional Comprehensive  
Economic Partnership. 

“We reaffirm an FTA is an important way to deepen our economic and trade cooperation and promote trade and investment liberalization and facilitation in East Asia, and will serve the common interests of the three countries,” said the joint statement. 

In the opinion of Zhou Yongsheng, a professor at the Japan Research Center at China Foreign Affairs University, it is good news that the three biggest economies in East Asia have sat down for talks to promote greater economic integration.  

Meanwhile, China advocated the “China-Japan-South Korea+X” cooperation model in production capacity, poverty reduction, disaster management and energy saving, and tapping the fourth-party market in order to maintain sustainable regional development. 

Dong Yan, a researcher with the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, said the countries are crucial to negotiating on a comprehensive regional economic cooperation framework in Asia, and the resumption of the summit will play a positive role in boosting free trade zone negotiations among the three countries, building new trade and investment rules for Asia, and breaking barriers of independent free trade zones across Asia. 

Hu Biliang, director of the Belt and Road Research Institute under Beijing Normal University, said improving the overall situation in Northeast and Southeast Asia has provided an important opportunity for economic integration in East Asia. The protectionism of the Trump administration in the US and China’s Belt and Road Initiative “have given external and internal impetus to regional integration.”
“Although challenges loom large, the process of regional integration in East Asia will play a crucial role in ushering in the Asian era, particularly in maintaining sustainable prosperity and development, as well as the multilateral trade system in the region, ” he said.