China, Japan, South Korea Eye Trilateral Finance Meeting

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China, Japan, South Korea Eye Trilateral Finance Meeting

The meeting, in addition to discussing economic issues, would set the tone for the expected leaders’ summit this fall.

China, Japan and South Korea have planned a sideline meeting during the G20 Finance Ministers and Central Bank Governors gathering in Peru on Thursday.

In a statement to Yonhap News, the Korean Foreign Ministry stated that the meeting will focus on “macroeconomic conditions, developments in the financial market and [best responses] to the latest economic policy changes being implemented around the world.” One of the policy changes of particular concern to these East Asian economies is the predicted U.S. interest hike later this year.

It would be the second meeting between the three East Asian finance ministries this year. The three officials also met this May on the sidelines of an Asian Development Bank gathering in Azerbaijan.

This meeting, however, is poised to be especially significant as it could set the tone for the still unconfirmed but highly anticipated trilateral leaders’ summit in South Korea later this year.

While the three countries have held annual joint leaders’ summits in the past, this will be their first since 2012. The regular forum for cooperation had collapsed over historical and territorial tensions that included China and South Korea’s frustration with what they viewed as Japan’s reluctance to take responsibility for its wartime past. With Japan adopting a much more assertive stance since Prime Minister Shinzo Abe’s ascension to power in 2012, concerns over a Japanese return to its militarist past have become ever more salient in the minds of China and Korea’s leaders.

The tensions are still unquestionably present, having resurfaced after Abe’s “unconvincing” statement on the 70th anniversary of the Japanese surrender in World War II, but recent official rhetoric from China and South Korea both signal increasing willingness to temporarily set aside political concerns. At a meeting in Beijing in September, South Korean President Park Geun-hye and Chinese President Xi Jinping agreed that a trilateral summit would contribute to further peace and prosperity in the region.

Guo Yanjun, the deputy director of the Institute of Asian Studies at China Foreign Affairs University, noted last month that while trilateral ministerial level meetings have gradually resumed in the past year, a leaders’ summit would be a major boost for “practical cooperation.” Though no formal promises have been made, there are already hopes circulating that the summit will ease tensions over territorial disputes, and, even more significantly, galvanize discussion on the proposed trilateral free trade agreement. A FTA deal between the three countries would have enormous impact, as they together represent 20 percent  and 18.3 percent of the world’s gross domestic product and trade, respectively.

The summit would also provide Park and Abe a stage to hold their first-ever official bilateral meeting. While China-Japan relations have warmed slightly after Xi and Abe’s meeting this April, Japan’s relations with South Korea remain rocky. In addition to addressing the long-term feud over the issue of “comfort women,” the two leaders would have the opportunity to discuss prospects for greater security cooperation — something of particular concern to both nations and their Western allies in light of an unpredictable North Korea and more muscular China.