Despite the effects of the COVID 19 pandemic, bilateral trade between China and Japan reached nearly $150 billion in the first half of 2020. Japan`s investment in China amounted to about $2 billion, which is essentially the same level as the previous year. These resistant flows reflect the deep foundations and enormous potential of Sino-Japanese relations. If China, Japan and South Korea reach a free trade agreement, it would be the third largest free trade area in the world after the U.S.-Mexico-Canada (USMCA) agreement with the European Union. In January 2012, the South Korean and Chinese presidents announced that they were moving towards negotiating a bilateral agreement between the two countries. In March 2012, the three countries concluded an investment agreement between them, seen as a step towards a broader free trade agreement. In May 2012, China and Korea held their first round of negotiations for a free trade agreement in Beijing. Asia-Pacific countries, including Japan, China and the 10 ASEAN members, signed a regional trade agreement on Sunday covering nearly a third of the world economy and concluding eight years of negotiations after India`s withdrawal. In the context of enhanced china-Japan relations, the two countries should begin negotiations for an improved bilateral investment agreement as soon as possible and begin negotiations for a free trade agreement between China and Japan. Supporters of the trade pact, which includes 2.2 billion people for a total GDP of $26.2 trillion, said it would strengthen economies weakened by the pandemic by reducing tariffs, strengthening supply chains with common rules of origin and coding new rules for e-commerce.
Negotiations for a bilateral free trade agreement between Japan and Korea, which failed in 2004 despite several attempts at recovery, face unresolved tensions resulting from Japan`s occupation of Korea in the first half of the 20th century and Japanese opposition to a reduction in tariffs on agricultural imports. A possible free trade agreement between China, South Korea and Japan must be taken into account in the context of the ongoing economic and political rivalry between China and the United States, as Washington considers creating a new regional free trade and investment agreement through membership of the Trans-Pacific Partnership (TPP). Although President Xi Jinping`s visit to Japan has been postponed due to the pandemic, warm relations between China and Japan have created good conditions for valuing and developing bilateral relations.