On Nov. 20, China, Japan and South Korea jointly announced the launch of trilateral talks on establishment of free trade area in Phnom Penh.
China, Japan and South Korea are the pillar of Asian economy and important economies in the world. They are major economic and trade partners and target markets of each another. There will be a tremendous market with a population of over 1.5 billion once the trilateral free trade area is established.
The strengthening of trilateral relations of Japan, South Korea and China will facilitate the process of economic integration in East Asia and bring a range of economic benefits.
Firstly, the establishment of trilateral free-trade area will help China eliminate the trade and investment barriers in South Korea and Japan and enhance the scales of China’s trade and investment in the two countries.
Secondly, the establishment of trilateral free-trade area will promote the rational distribution of the industry chain in the three countries and improve the efficiency of resource use.
Thirdly, the establishment of trilateral free-trade area will bring considerable macroeconomic gains to China in terms of production, trade and welfare and increase the level of employment.
China’s GDP is expected to increase 1.1 percent to 2.9 percent after establishing the trilateral free trade area; Japan will have an increase of 0.1 percent to 0.5 percent and South Korea 2.5 percent to 3.1 percent.
