East Asian Economic Review (Jun 2004)
China's Political-Economic Approach toward FTAs with East Asian Nations and Its Implications for Korea
Abstract
Focusing on a political-economic perspective, this article examines on the background and objectives of China's approach toward FTAs with East Asian nations. It appears that China's strategy to regional economic integration recently has transformed from a passive direction to active initiative, pushing forward its winning strategies － economic liberalization and its resolve to become a regional leader － while spearheading projects to create a regional free trade zone. China has a tendency to take a serious view on the significance of non-economic factors or international politics and security in regard to pursuing FTAs with neighboring countries. Behind China's ASEAN+1 plan, the implication of security is deeply rooted; and through its pursuit of economic integration within the region, China seems to be seeking change in the regional security order. China has also been bringing security discussions into the mechanism of regional economic cooperation among Korea, China and Japan. China also appears to have a few types of ideological mentality when pursuing FTAs. It seems that China's "great-power mentality"(daguo xintai ) is somewhat robust. This mentality is prone to be extended to hegemonic contention within the region. If China combines the "great-power mentality" with nationalism in the process of pursuing FTAs with neighboring countries, then this might entail exclusive regionalism. Both Japan and China are basically in rivalry over regional hegemony, and competing for leadership in intra-regional FTA initiatives. In pursuing FTAs with South Korea, China and Japan seem to have quite a contradictory approach. Japan, which wants to control the rise of China, seems to be ruling out the China-Japan-Korea FTA plan and actively pursuing a Japan-Korea FTA. On the contrary, Beijing is expected to actively propose to pursue China-Korea FTA in order to hold back rapid progress in Japan-Korea FTA negotiations, which have already commenced. On the other hand, Korea has been pursuing a strategy called "Open Neo-Trading Nation." The vision of the Korean government, which is looking to build up a Northeast Asian economic community characterized by peace and prosperity, is basically not aiming for exclusive and discriminative regionalism but globally arranged open regionalism. Seen from the principle of aiming toward open East Asian regionalism, Korea should pursue achieving a balanced East Asian economic community with impartiality to either China or Japan, which are rivals for regional hegemony. The pursuit of "open East Asian regionalism,"also requires restraint from political and security factors when pursuing FTAs. Korea needs to pursue an economics-dominated FTA that is based on a precondition of hardly containing political and security factors.
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