TOKYO -- Japan, China and South Korea agreed at a summit meeting here on May 9 to promote multilateral free trade, bearing in mind that the U.S. administration of President Donald Trump is leaning toward protectionism.
Prime Minister Shinzo Abe and his Chinese counterpart Li Keqiang also agreed at their bilateral summit to strengthen cooperation between their two countries in the infrastructure-building and financial sectors.
The Japanese business community is enthusiastic about expanding business opportunities in China for Japanese firms, and places high expectations for cooperation between the Japanese and Chinese governments in the strengthening of bilateral economic ties.
"The Chinese market is rapidly growing, and we'd like to invest resources there before it's too late," said Akio Toyoda, president of Toyota Motor Corp.
However, Tokyo and Beijing are competing for the initiative in working out trade rules in Asia. Moreover, China is aiming to get cooperation from Japan and South Korea as a strategy for gaining an advantageous position in its negotiations with the United States amid the intensifying China-U.S. trade frictions.
Despite agreement on economic cooperation to great fanfare, there are no prospects that Japan and China will make specific achievements in this field.
"Economic and trade cooperation between China and Japan is developing into a new phase," Chinese Premier Li said as he emphasized achievements at the bilateral summit meeting.
In the infrastructure field, attention was focused on Japan's cooperation in China's "One Belt, One Road" economic zone policy.
Prime Minister Abe and Li agreed at a May 9 one-on-one meeting that the two countries will establish a public-private joint forum toward cooperation in investment projects in third countries, and to hold the first meeting of the forum when Abe visits China.
Beijing is promoting the One Belt, One Road initiative to spread its influence to Africa and South America. China is apparently attempting to get Japan involved in the policy to further increase Beijing's influence in the world.
The Japanese business community hopes that if Japanese companies can participate in large-scale projects as part of One Belt, One Road, it will lead to expanded business opportunities for Japanese companies.
However, the Japanese government is wary that the One Belt, One Road initiative could cause Japan's influence in Asia and other areas to decline.
Japan has prioritized the construction of high-quality infrastructure in its development cooperation in newly emerging economies to help these countries protect their environments and support their self-reliance.
In the financial field, China has decided to grant Japan a 3.4 trillion yen investment quota on a Chinese yuan basis, allowing Japanese financial institutions and other businesses to buy yuan-denominated shares and bonds on the Chinese market. However, as European and U.S. financial institutions have already been granted such a quota, it remains to be seen how much benefits Japanese firms, which have lagged behind their Western counterparts, will gain through the new quota.
On the trade front, Japan, China and South Korea agreed to promote negotiations on free trade agreements and those on the Regional Comprehensive Economic Partnership (RCEP) in which 16 countries, including these three countries, are participating.
Still, Japan is taking the initiative in the Trans-Pacific Partnership free trade pact in a bid to create a high-level economic zone in which tariffs will be substantially reduced and intellectual property rights are thoroughly protected.
China is calling for gradual liberalization in RCEP talks, while keeping in mind the protection of the country's domestic industries. Due to these differences, cooperation between Tokyo and Beijing in trade is expected to face difficulties.
(Japanese original by Daisuke Ando and Daisuke Oka, Economic News Department, and Kiyohiro Akama, China General Bureau)