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Business / Economy

Qingdao to benefit from Trilateral FTA

By Liu Zheng (chinadaily.com.cn) Updated: 2012-05-15 14:54

Qingdao city is expected to benefit greatly from the Free Trade Agreement (FTA) negotiations inked by China, Japan and the Republic of Korea (ROK), according to an expert.

Beijing, Tokyo and Seoul released a joint declaration on May 14 said they have set their sights on reaching a trade pact that will apply to all of East Asia. The trio announced on May 13 to start talking about a FTA this year.

The Chinese government proposed to established a demonstration area for economic cooperation in Shandong province, which is adjacent to Japan and the ROK, Shanghai Securities News reported Tuesday.

Liu Zhiting, researcher at the Institute of Economics of Qingdao Academy of Social Sciences said that, as long as the FTA negotiation makes substantial progress, East China's Shandong province, especially Qingdao city, is expected to benefit from the process.

According to reports released by the Ministry of Foreign Affairs of China, from 1999 to 2012, the trade between Japan, the ROK and China has increased more than four times from $130 billion to over $690 billion.

China has been the largest trading partner of Japan and the ROK for several years. Japan and the ROK ranked fourth and sixth respectively in China’s trading partners list.

Japan and the ROK have become an important source of foreign investment for China. As of the end of 2011, the cumulative direct investment in China from Japan and the ROK were close to $80 billion and $50 billion respectively.

Since opening up and reform policies, Shandong Peninsula has become a hot spot for Japanese and ROK companies to invest in China.

Data shows that, Qingdao has so far approved 1,848 of Japanese-funded projects and 11,000 South Korean investment projects, the actual use reaching $3.4 billion and $13.24 billion.

The ROK and Japan have become respectively the largest and the third source of foreign investment, and the third and second largest trading partner of Qingdao.

In addition, there are indications that Qingdao will focus on the construction of the west coast of Qingdao Economic Area. The regional economic cooperation experimental zone between China and the ROK has already begun specialized planning, which will address the possibility of constructing an innovation and cooperation zone between China and the two countries.

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