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International trade
------About China, Japan and South Korea.

RUI KANG 2013-05-10

Introduction:
a) China-Japan-South Korea free trade area. b) The basic information of those three countries. c) The export, import and trade balance of each other. d) Complementary of production factors and industrial structure. e) China, Japan and South Korea trade the main obstacle factors.

Brief introduction of the free trade area:

The China–Japan-South Korea Free Trade Agreement is a proposed free trade agreement between China, Japan and South Korea. Negotiations on the agreement were set in motion in 2012. The first official talks on the matter were held in Seoul from 26–28 March 2013. Trade among the three economies totaled US$690 billion in 2011; however, progress on negotiations may be hampered by ongoing territorial disputes among the participants.

The purpose of the free trade area:

Japan and South Korea need to concentrate our efforts to promote the China-Japan-ROK cooperation to reach new heights, making Japan and South Korea for the future and all-round cooperation partnership to further consolidate the mutually beneficial cooperation more results, more profound friendly feelings between the people, Japan-ROK cooperation will promote the common interests of Japan and South Korea to contribute to peace, stability and prosperity of East Asian countries and even the world.

Basic information:
China
Population
13.7 bln

Japan
1.26 bln

South Korea
0.50 bln

Area
Capital

9 596 961 sq.km
Beijing

377 800 sq.km
Tokyo

100 210 sq.km
Seoul

Foreign policy
GDP GDP per capital

An independent foreign policy of peace.
73011 bln $ 6,076 $

Aggressive

Multilateral diplomatic activities
9863 bln $ 23,749 $

58685 bln $ 46,736 $

Real GDP Growth Rate.

Exchange rate:

Import of goods and services, annual,1998-2012

Export of goods and services, annual,1998-2012

Trade balance,annual,1998-2012.

Compare the export of Japan and South Korea to China.
(Monetary Unit :mln dollars)

Year
2005 2006 2007

Japan
79972 92746 109279

South Korea
61915 69459 81985

2008
2009 2010 2011 2012

125022
109612 149692 162040 144197

91389
86703 96265 134205 134331

Compare the import of Japan and South Korea to China.
(Monetary Unit :mln dollars)

Year
2005 2006

Japan
108516 118338

South Korea
24427 27290

2007
2008 2009 2010 2011

127844
143611 122483 153370 184065

27290
29469 12968 28642 39822

2012

188386

40577

Compare the trade balance of Japan and South Korea to China.
(Monetary Unit :mln dollars)

Year
2005

Japan
-28544

South Korea
23267

2006
2007 2008 2009 2010 2011 2012

-211084
-18656 -268633 -12871 -303062 -22025 -332583

20902
18958 14459 32457 20803 47779 53553

Complementary of production factors and industrial structure .
1) Complementary of natural resources.

Relative to Japan and Korea, abundant agricultural resources and mineral resources, the vast Midwest is still in the preliminary stages of development; Japan and South Korea the relative shortage of natural resources, energy and industrial raw materials, low self-sufficiency among the three natural resources highly complementary.

2) Complementary of labor resources. China has a large number of surplus labor, and labor costs are lower; Japan and South Korea, although the population density is high, but due to the high level of economic development, production and exports, as well as population aging and other reasons, lack of labor resources, labor high cost.

3) Complementary of Knowledge resources and international resources. China in terms of natural resources and human capital to be significantly stronger than Japan and South Korea, and Japan and South Korea in knowledge and technology with international resources to be significantly stronger than the Chinese. Factors of production complementarily is the material basis of economic integration, while Japan and South Korea factor endowments vary, the formation of the comparative advantages of the different factors of production, the complementary nature of the resources of the three countries with the conditions and basis of win-win trade.

4) Complementary of industrial structure.

Japan is a highly industrialized modern country, capital-intensive and hightech industries; South Korea is the degree of development of newly industrialized countries close to Japan, technology-intensive industries and IT industries, China is to achieve industrialization in developing countries, labor-intensive based industries and manufacturing development. Between the three countries in the capital, the industry has a great advantage technically complementarily and transitive. Relatively developed in Japan and South Korea obvious competitive advantages in capital and technology-intensive industries, China's main competitive advantage is still concentrated in the resources or labor-intensive products.

China, Japan and South Korea trade the main obstacle factors:
1) Differences in economic development: China is a developing country, Japan is a developed country, South Korea is a newly industrialized country. The obvious differences in the economic structure of the more profound influence on the interests of different social groups, thereby facing social pressure and the greater the resistance. 2) Agriculture is one of the main factors affect the establishment of a free trade zone. Japanese agriculture is a very sensitive area, arable land resources are very limited, the labor productivity of the agricultural sector is very low, is an agricultural country highly dependent on imports. The Korea Agricultural degree of protection is higher, because of agricultural issues, Japan and South Korea FTA negotiations has been delayed unsuccessful. China is a large agricultural country, agricultural issues are also a major problem constraining economic development. The build process of the Free Trade Area, Japan and South Korea have been reluctant to open markets for agricultural products, the comparative advantage of China's agricultural products will not be able to play.

Thanks for your attention!!!


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