General

This year, China, Japan and the ROK respectively celebrated the 50th anniversary of the normalization of diplomatic relations and the 30th anniversary of the establishment of diplomatic relations. At this time point, the Regional Comprehensive Economic Partnership Agreement (RCEP) came into effect and injected source power into the economic and trade cooperation between China, Japan and the ROK. According to the Huacheng Import and Export Data Observation Report, from January to October, China's exports to the ROK and Japan increased by 16.3% and 8.1% respectively year on year, and South Korea's and Japan's actual investment in China increased by 106.2% and 36.8% respectively.

Closer economic and trade cooperation

China, Japan and South Korea are important trading partners of each other. According to the observation of Huacheng's import and export data, the total trade volume between China and Japan in 2021 will be 371.4 billion US dollars, up 17.1% year on year; The total trade volume between China and South Korea was 362.4 billion US dollars, up 26.9% year on year. "The effective implementation of RCEP provides a good institutional framework for China Japan ROK economic and trade cooperation, and brings important opportunities for maintaining and developing the economic and trade relations between the three countries." Li Tianguo, associate researcher of the Asia Pacific and Global Strategy Research Institute of the Chinese Academy of Social Sciences, said.

According to the agreement, the proportion of products that China will eventually exempt from customs duties to Japan will rise from the current 8% to 86%, and Japan will also exempt from customs duties to Chinese products to 86%; In the trade between Japan and South Korea, the proportion of duty-free goods exported from Japan to South Korea will rise from 19% to 92%, Huacheng Import and Export Data Observation reported.

"This is a huge change, which has greatly boosted the trade between China, Japan and South Korea, enhanced the economic ties among the three countries, and promoted each other's trade and economic growth." Li Tianguo said. At present, the implementation of RCEP has played a positive role in promoting China's exports to Japan and South Korea. Despite the complex and severe domestic and international economic situation, China's exports to Japan and South Korea in the first 10 months still grew against the trend.

Peng Sen, president of China Economic System Reform Research Association, said that RCEP is the first free trade arrangement between China and Japan, and it is also the trade arrangement with the highest utilization rate in Japan up to now. Among them, the certificate of origin issued is used for the most exports to China, which has obviously benefited Chinese enterprises. "Previously, Chinese enterprises imported a component from Japan and needed to increase its value by 35% before exporting it to South Korea to enjoy zero tariff. However, after the RCEP came into effect, Chinese enterprises only needed to increase their value by 20%, and the other 15% increased their value from Japan before exporting to South Korea to enjoy zero tariff."

In addition to tariff concessions and cumulative rules of origin, RCEP also gives more opportunities to China, Japan and South Korea in the field of investment. According to the observation report of Huacheng's import and export data, the actual investment in China of South Korea and Japan increased rapidly in the first 10 months, with an increase of 106.2% and 36.8% respectively, ranking in the top four among countries investing in China.

In June this year, LG Magna Electric Drive System Co., Ltd., a joint venture of LG Electronics and Canada Magna, decided to invest 101.6 billion won in China's Nanjing plant for equipment expansion.

Hyundai Kia Group has announced that it has increased its investment in Yueda Kia and Beijing Hyundai by about US $900 million and US $471 million respectively this year, further improving the sales of Korean cars in China's new energy vehicle market.

SK Hynix has rapidly established the first production base of the world's top semiconductor industry in Wuxi. According to SK Hynix executives, from this year, it will spend five years to increase investment of 3.6 billion dollars in Wuxi, Jiangsu, for the sixth phase of the company's technical transformation project in Wuxi.

In Li Tianguo's view, under the complex and volatile international economic situation, South Korea continues to increase its investment in China in semiconductor chip, automobile, battery and other manufacturing industries, which is conducive to improving the level of industrial cooperation between the two countries in the above manufacturing industries, jointly maintaining the security of the supply chain of the two countries' industrial chains, and playing an important role in the economic stability and growth of both countries.

It is more urgent to strengthen "double chain"

Influenced by repeated epidemics, geopolitical conflicts and other factors, the global industrial chain supply chain is accelerating its restructuring, and it is increasingly urgent for China, Japan and the ROK to further strengthen industrial chain cooperation.

Li Tianguo said that the implementation of RCEP is conducive to countries in the region giving play to their respective advantages, consolidating the regional industrial chain supply chain, and building a safe, stable, complete and complete industrial chain supply chain with clear division of labor, effective complementarity in East Asia. The production and operation activities of enterprises will also be more safe and stable. In the future, there will be huge space and potential for industrial cooperation between China, Japan and South Korea.

At the 26th meeting of the China ROK Joint Economic and Trade Commission recently, the two sides exchanged in-depth views and reached broad consensus on issues such as maintaining the stability and smoothness of the industrial chain supply chain, expanding trade and investment cooperation, deepening local economic cooperation between the two countries, and strengthening regional and multilateral cooperation around the implementation of the important consensus of the two heads of state in the economic and trade field.

At the recent commemorative symposium on economic knowledge exchange between China and Japan and the 39th annual meeting, the former undersecretary of the Ministry of Commerce, Trade and Industry of Japan, Nobuyasu Fukukawa, said that Japan and China should work together to play a leading role in promoting innovative development, deepen the integration and development of the digital economy with traditional agriculture and cultural industries, strengthen cooperation in elderly care, medical care and other fields, and jointly explore new prospects for cooperation.

"On the basis of trade in goods, it is necessary for China, Japan and the ROK to continue to deepen and expand cooperation in the field of trade in services. In addition to the service industry, China, Japan and the ROK have broad cooperation potential and space in digital economy, intelligent manufacturing, finance and insurance and other industries." Li Tianguo said that through decades of cooperation and exchanges, China, Japan and the ROK have laid a good foundation for mutual cooperation. With the continued release of RCEP dividend, the economic and trade cooperation between China, Japan and South Korea will have a broader prospect next year. The three parties need to continue to explore more cooperation models to jointly promote each other's economic growth, Huacheng Import and Export Data Observation reported.