The key lies in further opening up markets

陈小将

Promoting higher-standard opening-up for services trade and investment is a shared task for China, Japan and the ROK. According to estimates by the Organization for Economic Co-operation and Development, the ROK's service trade restrictiveness index exceeds the OECD average by 80 percent, with Japan's being roughly on par with the OECD average but double that of major developed countries such as the United States, the United Kingdom, Germany and France. And although China has fully opened up its manufacturing sector, it still has room for further opening up its services sector.

This calls for deeper cooperation among the three countries to formulate a transparent negative list for cross-border services trade and substantially reduce barriers in the sector. The three countries should also take measures to align their rules, regulations and standards for their services markets, and thus attract more investments.

China, Japan and the ROK can also leverage their comparative advantages in R&D, design and manufacturing to establish a trilateral manufacturing industry association, in order to accelerate the implementation of trade policies in areas such as production equipment, technical services, joint R&D, and the free movement of high-tech professionals within the manufacturing sector.

Unilateral restrictions that violate market principles are not only ineffective but also harmful for the regional industry and supply chains. Plus, they will increase the cooperation costs. That huge potential is left untapped in trilateral high-tech trade can be gauged from the fact that Japan's exports of semiconductor manufacturing equipment to China in the January-April period jumped by 95.4 percent year-on-year, accounting for 50 percent of its total exports in this sector.

As for the ROK, its memory semiconductor exports to China from January to September grew by 40 percent year-on-year, representing 37 percent of its total memory semiconductor exports. Whether from the perspective of their own interests or broader market development, China, Japan and the ROK should enhance their strategic autonomy, refrain from "decoupling" or breaking down the supply chains, and advocate for greater market openness to increase mutual benefit.