china, japan and korea trade in goods and … japan and korea trade in goods and approaches to...

China, Japan and Korea Trade in Goods and Approaches to CJKFTA

National Academy of Economic Strategy Chinese Academy of Social Sciences

FENG Lei fenglei@cass.org.cn

Goods Trade: the Foundation of CJKFTA

General idea：Trade in goods is still the basis of the international economic and trade relations New issues of FTA： service trade, investment arrangements, competition

policies, environment, labor, Intellectual property and government procurement

Particularity of goods trade in CJKFTA Export market Advantage of manufacturing The advantage differences in manufacturing

Changes of Interdependency

Changes of interdependence in goods trade among the three countries effect manufacturing complementary relationship and their attitude to CJKFTA. (Changes are as follows)

China：Goods Exports to Japan and Korea

To Japan：14%（1991）、20%（peak ratio,1996）、8%（bottom,2011） China’s goods exports increased by 26 times. （Exports to Japan rose by 14 times.） The dependency on Japan market went down. （Japan market became less important.）

To South Korea：3%（1991）、4%（2011） The dependency on Korea market went up slightly. （Exports to Korea increased by 39 times and Korea market became more important.）

China：Goods Exports to Japan and Korea

China：Imports from Japan and Korea

From Japan：16%（1991）、23%（peak,1994）、11%（bottom,2011） The import dependency on Japan market went down. China’s imports increased by 27 times and the imports

from Japan rose by 19 times. From Korea：2%（bottom,1991）、12%（peak, 2005）

、9%（2011） The dependency on Korea market is increasing. The imports volume from Korea rose by 147 times from U.S. $ 1.1 billion to U.S. $ 162.7 billion.

Japan was the leading import origin in1991, but in 2011, Korea had equal shares almost.

China：Imports from Japan and Korea

Japan：exports to China and Korea

Japan：exports to China and Korea

To China：3%（bottom,1991）、20%（peak,2011） The dependency on China is high. The exports volume increased by 2 times (18 times to

China) and China market is more and more important. To Korea：6%（1991）、8%（2011） The dependency on Korea rose slightly. The exports volume increased by 2 times (3 times to

Korea market)

Japan: imports from China and Korea

Japan: imports from China and Korea

From China：6%（1991）、21%（2011） The imports volume increased by 3 times（13 times

from China market）. The imports dependency on China is increasing （more and more dependent on China’s goods）

From Korea：5%（1991）5%（2011） The imports volume increased by 3 times（3 times

from Korea market）. The imports dependency kept flat.

Korea: exports to China and Japan

Korea: exports to China and Japan

To China：1%（1991）、24%（2011）

To Japan：17%（1991）、7%（2011）

Korea exports model：Japan-oriented（1991）to China-oriented（turning point : 1997-2001 after Asian Financial Crisis）

Korea：imports from China and Japan

Korea：imports from China and Japan

From China：4%（1991）、16%（2011）

From Japan：26%（1991）、13%（2011）

Import model： shift from mainly dependent on Japan to dependent on both China and Japan, and China

is slightly heavier.

The changes of interdependency: China

China’s exports ratio： 17%（1991）decreased to 12%（2011）（-5%=-6%

Japan +1% Korea） China’s export dependency on Japan and Korea is decreasing.

China’s imports ratio ： 18%（1991）increased to 20%（2011） （2%=-5% Japan+7% Korea） China’s import dependency on Japan and Korea is increasing.

The changes of interdependency: Japan

Japan’s export ratio： 9%（1991）increased to 28%（2011）（19%=17%

China +2% Korea） Japan’s import ratio ： 11%（1991）increased to 26%（2011）（15%=15%

China +0% Korea） Japan is more and more dependent on China and Korea

as trading partners. Japan’s dependency on China highly rose.

The changes of interdependency: Korea

Korea’s export ratio： 18%（1991）climbed to 31%（2011）（13%=23%

China -10% Japan） Korea’s import ratio ： 30%（1911）declined to 29%（2011）（-1%=12%

China-13% Japan）

China and Japan swapped their places for Korea’s imports and exports.

The dependency movement

China’s goods trade with Japan（imports + exports） decreased China’s goods trade with Korea （imports + exports）increased Japan’s goods trade with China and Korea （imports +

exports）increased Korea’s trade with China（imports +exports）increased Korea’s trade with Japan（imports +exports）decreased

Goods trade and GDP(in billion)

2011 GDP Goods trade

Ratio of goods trade of GDP

China 7298.1 3642.1 50% Japan 5869.5 1679.0 29% Korea 1116.2 1080.9 97% EU 17577.7 4474.4 25% NAFTA 17985.7 5291.2 29% Global average

69659.6 18217.0 26%

Brief comment

Interdependency of goods trade The impact on manufacturing The influence to the attitude of CJKFTA

CJKFTA、“10+3”、“10+6”

What is our goal？ CKJFTA（quite difficult）（practical significance?） FTA including China, Japan and Korea（more space

and flexibility）（“10+3”，“10+6”） （even TPP，the USA’s wish to China）（Japan will join the negotiation.）

If the three countries participate in a FTA which is more open than CJKFTA, the practical significance of

CJKFTA will fade.

CJKFTA

Uncertainty is the basic characteristics of the road to CJKFTA. the uncertainty on political willingness. Environmental uncertainty of global & regional economy.

（ongoing European debt crisis 、weak recovery of US economy, China’s rapid economic growth but troubled by trade frictions）

uncertainty on trade （different FTA strategy） Impact from FTA practices（“10+6”, TPP）

From three “10+1” to one “10+3”

Three “10+1” China has sighed FTA with ASEAN，while Japan and

Korea have signed the framework of FTA with ASEAN

It is a practical road from three “10+1” to one “10+3”.

“10+6”or TPP

A FTA framework with wide range ： ASEAN + China, Japan, Korea, Australia, New Zeala

nd and India Prospects of TPP： Dominated by the USA（return to Asia，making new

international economic and trade rules） Complicated and difficult Difficult to adapt

A FTA with more members and wide openness or just CJKFTA?

Thanks！