China-Japan cooperation set to expand after Abe visit: expert

The first formal visit to Beijing by Japanese Prime Minister Shinzo Abe in nearly seven years shows a warming of bilateral ties following years of animosity and sends a message that Japan is willing to substantially strengthen its economic and trade relationship with the world's second-largest economy, according to an expert.

China and Japan have expanded their economic cooperation into third countries in a sign of a milestone breakthrough in the rigid "triangular trade structure", under which China buys Japan's high-end parts and components to assemble products and then export them to the global markets, said Zhang Jifeng, deputy director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences.

"In a joint effort, China and Japan can explore a new way for the deepening of their economic and trade relations through cooperation in third countries in the new era," said Zhang.

During Abe's visit, China and Japan held their first forum focusing on third-country cooperation, during which the local governments, financial institutions and enterprises of the two countries signed more than 50 cooperation agreements valued at more than $18 billion.

"It can be seen as a new pillar for the China-Japan pragmatic cooperation and shows a huge potential for cooperation in third countries. And the two countries' cooperation in third countries will have great impact on the global economy," said Zhang.

In July, Japan changed its long-held incredulous stance on the Beijing-led Belt and Road Initiative, agreeing to provide support to a Belt and Road infrastructure project in Thailand. At the time, Japan and China were reportedly planning to establish a Beijing-based committee which is made up of the two countries' government officials and civilians to handle their economic cooperation projects under the Belt and Road Initiative. Experts believe that these moves paved the way for Abe's Beijing visit.

On October 26 when Abe was holding a second meeting with his Chinese counterpart Li Keqiang in Beijing, the People's Bank of China and the Bank of Japan signed a currency swap deal worth 200 billon yuan ($29 billion), under which the two central banks will be able to exchange up to 3.4 trillion yen for 200 billion yuan and vice versa over the next three years.

The currency swap agreement is expected to stabilize the two countries' financial ties and the Asian financial markets as the trade war between China and the United States continues.

It indicates that the economic cooperation between China and Japan has been lifted to state level, compared with the past when trade and investment activities were almost conducted by individuals and companies, said Zhang.

In terms of manufacturing and infrastructure construction, the two countries should deepen their cooperation with their own advantages, said Zhang, adding that an innovation cooperation mechanism should also be established as the two countries are upping the ante on artificial intelligence and building of smart cities.

"China and Japan will get a win-win result as their cooperation is becoming broader and broader," said Zhang.

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