In recent days, exchanges and cooperation between Japan and South Korea in various fields such as security, economy and trade have picked up. The US factor behind it is obvious. Washington intends to make greater efforts to promote its Asia-Pacific allies to build a production and supply chain that excludes China. However, China, Japan, and South Korea have long been important economic and trade partners to each other. China is the largest trading partner of Japan and South Korea, and South Korea and Japan are China's fourth and fifth largest trading partners, respectively. It is in the common interests of China, Japan, South Korea and the region to jointly maintain the stability and smooth flow of regional and global production and supply chains. In this regard, relying on the important opportunities provided by RCEP, which has already come into force, to deepen China-Japan-ROK economic and trade cooperation will not only benefit the three countries, but also benefit the overall stability and prosperity of the region.
There is huge room for the development of service trade among China, Japan and South Korea
Under the framework of RCEP, China, Japan and South Korea will deepen economic and trade cooperation, focusing on promoting service trade. Judging from the data, the scale of service trade among China, Japan and South Korea has not only continued to increase, but also has a large room for growth. From 2012 to 2021, the total service trade volume of the three countries will increase from US$1.02 trillion to US$1.4 trillion. However, judging from the ratio of this total service trade to GDP, it will only be 5.74% in 2021, which is far lower than the global level of 11.80% in the same period. Preliminary estimates suggest that if the level of China-Japan-Korea service trade doubles and its share in GDP approaches or reaches the global average level, it will bring about an additional market of at least US$1.4 trillion.
China is the largest market of Japan and South Korea. This is because China's economic structural transformation contains a huge demand for service trade, which provides a huge space for the development of service trade among China, Japan and South Korea. From 2012 to 2021, the service trade volume between China and Japan increased from US$25.731 billion to US$31.423 billion; the service trade volume between China and South Korea increased from US$22.288 billion to US$32.445 billion. Moreover, China has maintained a long-term deficit in service trade with Japan and South Korea. From 2012 to 2021, China's service trade deficits with Japan and South Korea reached US$109.005 billion and US$40.891 billion, respectively. Take trade in digital services as an example. China, Japan and South Korea are quite complementary. From 2013 to 2021, the digital service trade complementarity index of China, Japan, and China and South Korea exceeded 1 in most years, which means that the degree of complementarity in the field of digital service trade is constantly improving.
At present, the proportion of service trade in the bilateral trade of China, Japan and South Korea is lower than the global average. In 2021, the proportion of service trade in bilateral trade between China and Japan, China and South Korea, and Japan and South Korea will be 7.8%, 8.22% and 11.06%, respectively, which is lower than the global average of 21.4%. To adapt to the general trend of global service trade development, China, Japan and South Korea should focus their economic and trade cooperation on service trade, thereby forming new trade growth points and promoting the upgrading of the trade structure of the three countries.
The common market opening of the three countries is very important
Under the RCEP framework, the key to deepening service trade cooperation among China, Japan and South Korea lies in market opening. Some countries' attempts to "decouple and break links" will seriously damage market opening. China, Japan and South Korea are all beneficiaries of free trade based on markets and rules. It has been in the past and it will be in the future. From 1995 to 2021, the proportion of Japan's exports of goods and services to GDP increased from 8.8% to 18.4%; South Korea increased from 25.7% to 42%; in many years, its external demand contributed more to economic growth than domestic demand. From a realistic point of view, the IPEF supply chain agreement passed not long ago attempts to build an exclusive supply chain system based on values in the Asia-Pacific. game. For example, the United States prohibits South Korean chip manufacturers from filling the gap in the United States' market share in China; Japan includes 23 categories including advanced chip manufacturing equipment in the export control list. According to past data, 60% of South Korea's chips are exported to China, and 30% of Japan's semiconductors are exported to China. Whether it is based on their own interests or market development trends, Japan and South Korea need to grasp the development trend of RCEP, grasp the development trend of the Asia-Pacific region, enhance strategic autonomy, be vigilant against the practice of "decoupling and breaking chains", and promote market-based and rule-based greater market opening.
Moreover, the common market opening of China, Japan and South Korea is very important. The OECD’s calculations show that Korea’s service trade restriction index for foreign investment is 80% higher than the OECD average level; Japan’s is roughly the same as the OECD average level, but its service trade restriction index (STRI) is lower than that of the United States and the United Kingdom. , Germany, France and other major developed countries twice. In other words, promoting the opening of the service industry market is a common task for China, Japan and South Korea. Comply with the trend of scientific and technological progress, give full play to the comparative advantages of China, Japan and South Korea in R&D, design and manufacturing, establish a China-Japan-Korea manufacturing industry alliance in related industries, and accelerate the implementation of production equipment, technical services, joint research and development, and technology under the manufacturing industry. Trade policies such as free movement of personnel, promote the integration of advanced manufacturing and modern service industries in Northeast Asia through cooperation in the productive service industry between China, Japan and South Korea. To adapt to the development trend of the digital economy, China, Japan, and South Korea need to actively explore relevant arrangements for the safe and orderly flow of data; on the premise of ensuring that the data flow is safe and controllable, expand the opening of the data field, realize the full aggregation of data, and promote the formation of a data element market in Northeast Asia.
Since 2018, China has made significant progress in the opening up of the service industry market. Commitments to opening up the financial and other fields have been implemented ahead of schedule. These opening up progresses have been recognized by the international community. From 2018 to 2022, China's accumulative import of services will be 2.3 trillion US dollars. At the same time, there is still considerable room for the opening up of China's service industry market. For example, under the framework of RCEP, China's service industry market opening commitments are in the form of a positive list. To adapt to the development trend of service trade and the needs of structural transformation for the development of service trade, China will accelerate the introduction and implementation of the national version of the cross-border service trade negative list in the next step, and steadily promote the institutional opening with a focus on service trade. With the continuous implementation of these opening-up measures, it is estimated that by 2025, China's service trade volume will reach US$1 trillion, of which imports will reach about US$600 billion. This will be a major benefit for Japan and South Korea to expand their international service markets.
Negotiations on the China-Japan-Korea FTA should achieve a breakthrough as soon as possible
The GDP and trade volume of China, Japan and South Korea account for more than 80% of RCEP. They play an important role in implementing RCEP commitments and practically advancing the RCEP process, and shoulder important responsibilities. In the future, as global and regional powers, China, Japan and South Korea's economic and trade cooperation focusing on trade in services will not only play a key role in advancing the RCEP process, but also have a global impact. This requires China, Japan and South Korea, especially Japan and South Korea to eliminate all kinds of interference and work together to promote the RCEP cooperation process.
China, Japan and South Korea are also qualified to take the lead in implementing the "full cumulative" rules of origin. The entry into force of RCEP has enabled China, Japan, Japan, and South Korea to form an institutional arrangement for mutual market opening and tariff reduction for the first time, and brought China, Japan, and South Korea into a unified framework of economic and trade rules. Tariff” target; Among them, China and South Korea need a 35-year “zero tariff” transition period. It is recommended that China, Japan and South Korea negotiate as soon as possible to significantly shorten the transition period for tariff reductions in accordance with the 20-year standard in the China-South Korea Free Trade Agreement. More importantly, the three countries should take the lead in promoting the transition of the rules of origin from "partial accumulation" to "full accumulation", and take the lead in implementing the "full accumulation" rules of origin, which will have a major impact on the optimization of the industrial chain and supply chain layout of enterprises in the three countries. In addition, in terms of certificates of origin, Japan has implemented a self-declaration system for importers of origin. It is recommended that China and South Korea match Japan as soon as possible and shorten the transition period for the implementation of self-declaration of origin.
Timely promotion of the integration of RCEP and CPTPP rules is a major option for the high-level opening up of RCEP. Japan is the leading country of CPTPP, and China and South Korea have also applied to join CPTPP. If China and South Korea can join CPTPP as soon as possible, it will not only further increase the overlap between RCEP and CPTPP members, but also promote the integration of RCEP and CPTPP rules. It will also make CPTPP’s economic volume exceed RCEP, and its influence in the reconstruction of global economic and trade rules will be greatly increased. . It is recommended to actively support China and South Korea to join CPTPP as soon as possible; at the same time, China, Japan and South Korea form a joint force to jointly promote the rules and standards of RCEP service trade, e-commerce, competition policy and other fields to gradually benchmark CPTPP.
In addition, the RCEP agreement provides important conditions for a breakthrough in the China-Japan-Korea FTA negotiations in terms of tariff reductions, market access, and regional supply chain adjustments. Under the background that the economies of China, Japan, and South Korea are highly complementary and their market dependence is still relatively high, it is necessary to eliminate external interference and classify the issues of China, Japan, and South Korea FTA negotiations under the framework of RCEP. On the basis of traditional trade issues, they will More new topics, such as intellectual property protection, opening up of the service industry, environmental standards, etc., will be included to achieve an important breakthrough in the negotiations on the China-Japan-Korea Free Trade Area as soon as possible.
