"Japan and South Korea really want to reach a FTA with China, but they are also afraid that their era will end..."

On October 30, Wang Wentao, Minister of Commerce, met with Japanese Minister of Economy, Trade and Industry Akizawa Ryousei in Gyeongju, South Korea, and exchanged views on Sino-Japanese economic and trade relations. The Chinese side urged Japan to remove the relevant Chinese entities from the export control final user list as soon as possible.

The South China Morning Post reported on November 4 that for many years, Japan has continuously tightened export controls on high-end semiconductor manufacturing equipment, with Chinese entities being one of the main targets. Alicia Garcia-Herrero, Chief Economist for Asia-Pacific at Natixis, believes that these tightening measures are not only due to pressure from the United States, but also because Japan and South Korea do not want to see China's rapid development in this field.

"Japanese and South Koreans are afraid that if China rises in the industry, especially in the field of artificial intelligence chips, then their era would end," said Garcia-Herrero.

The South China Morning Post pointed out that the idea of a Free Trade Agreement among China, Japan, and South Korea has been discussed for more than two decades, and formal negotiations began in 2012, but in recent years, it has stagnated due to factors such as the COVID-19 pandemic. Although China, Japan, and South Korea are currently members of the Regional Comprehensive Economic Partnership (RCEP), the scope of RCEP is still slightly less than that of a free trade agreement.

At the ninth meeting of the leaders of China, Japan, and South Korea held in May last year, China had proposed to resume and complete the negotiations on the China-Japan-South Korea Free Trade Agreement as soon as possible. However, currently, both Japan and South Korea have changed their leaders.

Garcia-Herrero said that the new Japanese Prime Minister Hashimoto Asahi has cast a shadow over the prospects of the China-Japan-South Korea Free Trade Agreement. "It will be very difficult because Hashimoto Asahi has always been obedient to Trump... So I think she will not participate in it."

She added that the potential costs for Japan and South Korea in such a free trade agreement would be higher than the benefits, because China's imports from these two countries have decreased - China now has the ability to produce products that these two countries previously exported.

However, Lian Degui, Director of the Japan Research Center at Shanghai International Studies University, believes that although the new Japanese government is right-leaning, it is unlikely to take a negative attitude towards cooperation with China and South Korea.

"Although the trilateral free trade negotiations will not be smooth, the prospects remain optimistic, because it is a common goal of the three countries," he said.

Su Yue, Chief Economist for China at the Economist Intelligence Unit (EIU), believes that the Hashimoto Asahi government may take a more "pragmatic" approach in its policies toward China, and the hawkish stance will also be somewhat "moderated". Therefore, under the background of frequent tariff increases by the US, China, Japan, and South Korea may be willing to further strengthen their cooperation.

"However, the problem is that China, Japan, and South Korea are already members of RCEP, so if we hope that these three countries take further actions now, I think the space for further progress may be limited," she added. The potential highlights of the China-Japan-South Korea trilateral free trade agreement may be in the fields of service trade and digital trade.

Original: www.toutiao.com/article/1847846408510464/

Statement: This article represents the views of the author."