RCEP Impact on Economic Links between PRC and Japan

Vladimir Zuev, Elena Ostrovskaya and Mikhail Kuznetsov
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Vladimir Zuev: National Research University Higher School of Economics, Moscow, Russia
Elena Ostrovskaya: National Research University Higher School of Economics, Moscow, Russia
Mikhail Kuznetsov: National Research University Higher School of Economics, Moscow, Russia

HSE Economic Journal, 2023, vol. 27, issue 2, 248–269

Abstract: The growing economic potential and the size of the market have turned China into the main trading partner of many countries, including Japan. Japan, in turn, provides a leading rolein the technological and investment cooperation of the Asia-Pacific countries, including China. However, until recently, the two leading Asian economies were not linked by an FTA Agreement, even though such agreements dominate international trade. The situation is being changed by the Regional Comprehensive Economic Partnership Agreement (RCEP), which entered into force in January 2022, creating new conditions for the development of foreign economic relations in the region. Prerequisites are being formed for a radical change in the situation, fundamentally re­versing the decades-long predominance of trade with the EU and the US in fast-growing Asian markets. The leading Asian countries are forming a space for the growth of mutual trade due to the promotion of preferential market access. By becoming part of the world's largest free trade zone, China and Japan are creating new growth points, primarily in trade for Japan and in expan­ding access to innovation and investment for China, which is of particular importance in a period of global instability and recession, trade wars, and geopolitical transformations. The purpose of the article is to determine the significance of the RCEP Agreement in trade and economic cooperation between China and Japan. The study hypothesizes that the participation of the two largest economies of the region in the RCEP is based on the deep mutual strategic interest of the partners: On the part of Japan, it is projected in a significant increase in exports to the capacious market of the People's Republic of China while on the part of the People's Republic of China, it is expressed in the possibility of pro­viding additional investment inflows and accelerating innovative development in key in dustries.

Keywords: China; Japan; international trade; trade policy; free trade area; foreign direct investment (search for similar items in EconPapers)
JEL-codes: F13 F15 F53 F63 O19 (search for similar items in EconPapers)
Date: 2023
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