Report and Joint Policy Recommendations on Strengthening
Economic Cooperation among China, Japan and Korea in 2002
In accordance with the common understanding reached during the Manila Summit by the leaders from China, Japan and Korea in November 1999, the joint research on "Strengthening Economic Cooperation among China, Japan and Korea" was officially launched by the representative institutes from the three countries, namely the Development Research Center of the State Council of China (DRC), the National Institute of Research Advancement of Japan (NIRA) and the Korea Institute for International Economic Policy (KIEP) in November 2000.
The first two-year project jointly carried out by the three research institutes was on the promotion of trade and investment among the three countries. In 2001, the emphasis was on trade facilitation. Based on the same questionnaires for the respective enterprises engaging in bilateral trade and the in-depth discussions at the international symposiums and workshops, we jointly drafted the "Report and Policy Recommendations on Strengthening Economic Cooperation among China, Japan and Korea." At the Brunei meeting in November 2001, Chinese Premier Zhu Rongji, Japanese Prime Minister Junichiro Koizumi and Korean President Kim Dae-jung confirmed the report and joint policy recommendations delivered by the research institutes from the three countries and agreed to establish a system of annual meetings attended by the economic ministers of the three countries. We are glad to see that the mechanism of economic and trade ministerial meetings by China, Japan and Korea has been officially launched and the first meeting was held in Brunei in September 2002. This important progress will no doubt have a positive impact on economic and trade cooperation among the three countries, regional cooperation and multilateral cooperation.
The joint research in 2002 focuses on "Facilitating Investment among China, Japan and Korea." Against the background of economic globalization and regional economic integration, cross-border investment plays an ever-increasing role in such aspects as enhancing the economic ties and promoting the economic development and structural readjustment of the three countries. According to the questionnaires jointly designed by the research institutes, NIRA mainly surveyed Japanese enterprises with investment activities in China and Korea and DRC concentrated on the Japanese and Korean-funded enterprises in China, while KIEP focused on Japanese enterprises investing in Korea and Korean enterprises investing in China. The survey aims at evaluating the current situation of mutual investment of the three countries, identifying the obstacles affecting their investments, not only in the host countries but also at home, and seeking ways to reduce or eliminate those investment barriers.
Due to the ever-closer relations between trade and investment, the three sides analyzed comprehensively, on the basis of the joint research in 2001, the relations of trade and investment among the three countries, which is also a summary of the first two-year joint research project for the first stage by the research institutes of the three countries.
In the "Joint Policy Recommendations" of 2001, the research institutes of the three countries proposed to establish an extensive official, business and academic dialogue mechanism regarding trade and other economic issues. In order to help establish such a mechanism, the entrepreneurs and officials from the three countries were invited for the first time to attend the international symposium on "Strengthening Economic Cooperation among China, Japan and Korea" held in Beijing in September 2002.
This report aims at proposing specific policy recommendations to the leaders of the three countries on trade and investment facilitation among them and providing advice on starting the joint research for the second stage by the three representative institutes. The report and joint policy recommendations based on their joint research will be delivered to the leaders of the three countries during the annual ASEAN + China, Japan and Korea meetings.
We hereby recommend the following:
1. Policy Measures Directly Related to Trade and Investment Facilitation
Jointly Establish an Information Exchange Platform and Network for Trade and Investment
In order to increase the policy transparency of the three countries and provide enterprises (small- and medium-sized enterprises in particular) with more sufficient information service, the three countries should, by making full use of the current windows and channels, jointly establish an information exchange platform and network for trade and investment so as to publish laws, regulations and policies related to trade, investment and other economic cooperative matters of the three countries.
Further Improve the Investment Environment
Efforts made by the three countries in improving investment environment have been affirmed by the business community, but host countries should further simplify their inspection and approval procedures on foreign direct investment, give practical protection of the intellectual property rights of investors, improve the mechanism for handling complaints lodged by investors, and avert the increase of production and labor costs caused by structural impediments by accelerating structural reforms to create a sound and predictable investment environment for enterprises.
Strengthen Follow-up Mechanism for Policy Implementation
In order to ensure the implementation of the consensus or agreements reached during meetings attended by state leaders and relevant ministers of the three countries, the respective government ministries (or agencies) in charge of relevant policy issues should strengthen their follow-up efforts and facilitate the implementation of agreements. Each country will appoint relevant ministries (or agencies), so that channels of communications can be established.
2. Policy Recommendations with More Profound and Long-term Significance
Comment on the Progress of Economic Cooperation among the Three Countries
In order to ensure the sound development of economic cooperation among the three countries and enhance the confidence in the business community, it is recommended that the leaders comment on the progress of trade, investment and other economic cooperation matters of the three countries during their annual summit. In view of the fact that after the Asian financial crisis, trade and investment among the three countries underwent a recovery growth and the beneficial interaction of trade and investment generated a win-win effect on the economic growth and structural reform of the three countries, it is hoped that the state leaders can give a positive appraisal so as to create a sound atmosphere for further economic cooperation among the three countries.
Launch Joint Research on "Economic Effects of a Possible Free Trade Area among China, Japan and Korea"
After finishing the first stage of research on trade and investment, the three representative research institutes have jointly suggested the launch of a new research phase, with the topic of "Long-term Economic Vision and Medium-term Directions to Strengthen Economic Cooperation among China, Japan and Korea." It includes the institutional arrangements of economic cooperation and other issues of common interest such as environment, energy and information technology, etc. The joint research on the new phase will be carried out step by step, beginning with the "Economic Effects of a Possible Free Trade Area among China, Japan and Korea" as the research topic in 2003, which is also confirmed by most investors, during a survey on enterprises by the research institutes of the three countries, to be the most important measure to be taken by the three countries in order to promote economic cooperation.
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