Economic relations are the silver lining

Editor's note: From conflicts over the Diaoyu Islands to the dispute over China's rare earths exports policy, China-Japan relations are dipping to a new low. In an annual survey on these relations released in June, 80 percent of the interviewees - a record high - believed that the bilateral relations are "not good".

The eighth Beijing-Tokyo Forum opens in Tokyo on Monday. The forum, co-sponsored by China Daily and Genron NPO, a Japanese think tank, has been held alternately in Beijing and Tokyo since 2005. Zou Hong / China Daily

But don't be too pessimistic. When we look at the outlook for the China-Japan economic and trade relations, things are much positive. At the two-day eighth Beijing-Tokyo Forum, which began on Monday, almost all the participants from the two countries, including the current and former government officials and corporate managers, reached a consensus that China and Japan need to join hands, especially at a time when the European debt crisis is deepening, and that the opportunities for future cooperation is immense.

China Daily talked to some of them about why and how the two Asian economies could cooperate in the future, the following is the list of questions and their answers.

Q1

What is the significance of strengthening the economic and trade cooperation between China and Japan amid the European debt crisis?

Q2

How can the China-Japan-South Korea FTA mechanism improve the economic and trade cooperation in the region?

Q3

What measures can be taken by the two countries' governments to facilitate the economic and trade cooperation, especially to boost the growth of small and medium-sized enterprises?

Sun Zhenyu

Former chinese ambassador to wto and chairman with the China Society for World Trade Organization Studies

A1

China and Japan are both important trade partners for the European Union, and the two neighbors face the same challenges when the eurozone suffers poor economic growth.

We two countries have a responsibility to help the EU out of the debt crisis, which needs us to work together and seek efficient methods to solve the problems.

It is in the interest of both China and Japan to reduce the risks from the European crisis by improving bilateral trade relations and preventing trade protectionism.

Increasing the bailout fund for the EU through the IMF framework is one of the most significant ways. Japan promised to inject $60 billion into the pool and China agreed to add $43 billion - a good example of the cooperation between the two countries.

A2

Now, the economic integration of China, Japan and South Korea is seeing unprecedented good opportunities, and this requires these three economies to further open up markets and facilitate trade cooperation.

It is time to accelerate the negotiation of a free trade area among the three countries, because their total GDP reached 19.6 percent of the global economy and the exports were 18.5 percent of the world's total in 2010.

The China-Japan free trade area can add about $46.7 billion to Japan's exports annually, and it lifts Japan's GDP by 0.66 percent. The FTA mechanism is a supplement to the multilateral trading system, not a replacement.

A3

China is expected to continually open the capital market and promote the internationalization of renminbi, which can support the direct investment and industrial cooperation between the two countries.

China can learn from the fiscal policies of the Japanese government, to structurally reform tax policies and support the development of small and medium-sized companies, especially in the high-tech, energy conservation and environmental protection sectors.

 

Akira Kojima

Member of Board of Trustees of the National Graduate Institute for Policy Studies

A1

Although the debt crisis is confined to Europe, the global economic system has changed. So the Asian economy must modify the economic growth model, instead of depending on the United States and Europe.

Asian economies, including China and Japan, must cooperate with each other to expand the Asian market.

A2

The two nations could develop cooperation in a wide range of sectors, infrastructure in particular. They could jointly develop harbors and airports across Asia, and by doing that, they could expand the network in Asia and in doing so grow the Asian economy.

We all know that the three nations of China, Japan and South Korea are discussing a trilateral free trade agreement. An FTA is necessary and a steppingstone to expanding the Asian market.

A3

We know that many European nations had expanding debt and the bubble burst. So the debt crisis broke out, and the banking system is suffering.

The Asia-Pacific region has money, and the money is here, so we can use the money at hand, instead of borrowing from the non-Asian banks.

China and Japan need to conduct more exchanges in the capital and bond markets. The two governments have taken steps toward that, but more measures are needed.