Prospects for Economic
Cooperation in Northeast Asia
February 2014
Yung Chul Park
Korea university
1

The Rise of Nationalism in CJK• China asserts its regional role as a super
military and economic power- Nationalism has been a powerful force
behind sustaining national unity andmanaging internal conflicts and dissention- It believes it has economic leverage overother countries in the region and will use it2

The Rise of Nationalism(II)• Japan is determined to become a normal
country with military capacity commensuratewith its economic power- Attempts to contain the rise of China in theregion where its base of influence is waning- Nationalism is one way of unifying thepeople under the banner of a “strongerJapan”
3The Rise of Nationalism (III)• Korea could lose its political independence if
it continues to depend on China economically-Japan is unwilling to recognize Korea’s ascentto the rank of “other advanced economies”-It has become so globalized that it could lose
national identity without infusing a sense of
economic and political achievements
4

The Rise of Nationalism(IV)• Growing economic interdependence has notprevented the danger of nationalism-China believes it can survive thetermination of trade with Japan and Korea-Japan will suffer, but is prepared to endure
the consequences for national pride-Korea cannot survive
5The Danger of Nationalism• There is no regional security arrangement that
can accommodate the rise of nationalism in all
three countries-A minor incident could easily trigger a regionwide military conflict-The US military presence has been and willcontinue to be the only deterrent to warfarein Northeast Asia
6

Japan-Korea Relations• There are no fundamental issues that pose risk ofbreaking up the bilateral relations- Should try to persuade the public futility ofthe bilateral disputes from theregional perspectives of security-Work together for accommodation of the rise ofChina- Most of all prevent nuclear buildup of NorthKorea
7

Japan’s exports to various parts of theworld (% of total exports)
35
30
25
20

15
10501990

1995

Asian NIEs

2000

China

Source: IMF, Direction of Trade

ASEAN-10

2005

USA

2010

EU-27

8

Japan’s imports from various parts ofthe world (% of total imports)
25

201510519911996
Asian NIEs

2001
China

Source: IMF, Direction of Trade

ASEAN-102006
USA2011EU-27

9

Tourist movements have been rising
Japan’s inbound tourists: Source country/region breakdown (%)
807060504030201002004

2005
Asia

2006
China

2007

2008
Korea

2009
Europe20102011

2012

US & Canada

10Tourist movements have been rising
China’s inbound tourists: Source country/region breakdown (%)
7060

504030201001995 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Asia

Japan

Korea

EuropeRussia

US & Canada

11

Rate of change in the number offoreign visitors to Japan (%, y-o-y)
175

150
125
100
75
50

250-25-50

China

Korea

Asia Total

Source: Japanese National Tourists Organization

Sep-13

Jul-13May-13Mar-13Jan-13

Nov-12

Sep-12

Jul-12

May-12Mar-12

Jan-12

Nov-11

Sep-11

Jul-11

May-11Mar-11

Jan-11

Nov-10

Sep-10Jul-10May-10Mar-10Jan-10-75World Total
12

02/2000
08/2000
02/2001
08/2001
02/2002
08/2002
02/2003
08/2003
02/2004
08/2004
02/2005
08/2005
02/2006
08/2006
02/2007
08/2007
02/2008
08/2008
02/2009
08/2009
02/201008/201002/201108/201102/201208/201202/201308/2013

Japan’s trade with China

2000

1800

1600

1400

1200

1000

800

600400200

Export to China
12 区間移動平均 (Export to China)
Import from China
12 区間移動平均 (Import from China)13

01/2000
07/2000
01/2001
07/2001
01/2002
07/2002
01/2003
07/2003
01/2004
07/2004
01/2005
07/2005
01/2006
07/2006
01/2007
07/2007
01/2008
07/2008
01/2009
07/2009
01/201007/201001/201107/201101/201207/201201/201307/201301/2014

Japan’s trade with Korea

600

550

500

450

400

350

300

250

200

150

100

Export to Korea
Import fromKorea

12 per. Mov. Avg. (Export to Korea)
12 per. Mov. Avg. (Import fromKorea)

14

Tourist arrivals in Japan
275,000
250,000
225,000
200,000
175,000
150,000
125,000
100,00075,000
50,00025,00001/2000
07/2000
01/2001
07/2001
01/2002
07/2002
01/2003
07/2003
01/2004
07/2004
01/2005
07/2005
01/2006
07/2006
01/2007
07/2007
01/2008
07/2008
01/2009
07/2009
01/201007/201001/201107/201101/201207/201201/201307/201301/20140

Visitor Arrivals from China

Visitor Arrivals from Korea

12 区間移動平均 (Visitor Arrivals from China)

12 区間移動平均 (Visitor Arrivals from Korea)

15