The South Korean government is exploring new models of economic cooperation with Japan and Southeast Asian countries. The effort takes into account the possibility of improved bilateral relations with Japan and is expected to help mitigate the ongoing tension between South Korea and Japan.
The Ministry of Trade, Industry and Energy recently issued a tender notice with regard to research projects on economic cooperation with China, Japan and Southeast Asian countries. The projects are to grasp Southeast Asian countries’ industrial complexes, their incentives for foreign companies, and the business of Chinese and Japanese companies in the countries. In addition, the projects are to derive new cooperation models by checking Southeast Asian countries’ demand for South Korean enterprises.
An important point is that Japan is in the scope of the research projects. “The ongoing tension will not continue forever and the research is to seek ideas in the long term,” the ministry explained, adding, “Both South Korean and Japanese private companies are well aware of the importance of continuous economic cooperation and what the government is planning to do is to support them on the same awareness.”
The South Korean government is currently proceeding with its new southern policy on the economic and diplomatic sides and more cooperation with Japan in the framework of the policy is anticipated based on the projects. Japanese companies began to enter the ASEAN market in earnest after the Plaza Accord of 1985 and trade between Japan and the market added up to US$221.9 billion in 2017 with China at the top with US$585.8 billion. On the contrary, South Korean companies began to do so in 2017.
South Korea’s plan to expand its strategic partnership with Japan in Southeast Asia is related also to the fact that China’s influence in the region is on the increase unlike Japan’s. For example, the ratio of imports from China to the total imports of the ASEAN region increased from 13 percent to 20 percent from 2010 to 2017 whereas the ratio of imports from Japan to the total fell from 12.4 percent to 9.1 percent during the same period.