On October 30, Chinese Commerce Minister Wang Wentao met with Japan’s Minister of Economy, Trade, and Industry, Akazawa Ryosei, in Gyeongju, South Korea, to discuss bilateral economic and trade relations. China urged Japan to promptly remove Chinese entities from its export control end-user list. Reports indicate that Japan has been tightening export controls on high-end semiconductor manufacturing equipment, with Chinese firms being a primary target.

Alicia Garcia-Herrero, Chief Economist for Asia-Pacific at Natixis, noted that these restrictions stem not only from U.S. pressure but also from Japan and South Korea’s reluctance to see China advance rapidly in this sector. "The Japanese and South Koreans fear that if China rises in industries like AI chips, their era will be over," she explained.

During a separate meeting with South Korea’s Minister of Trade, Industry, and Energy, Kim Jung-gwan, on November 1, Minister Wang emphasized the need to resume negotiations for a China-Japan-South Korea Free Trade Agreement (FTA). Despite ongoing U.S.-China tensions, China continues advocating for deeper regional economic cooperation in East Asia.

Analysts suggest that substantial progress remains challenging due to existing trade frameworks and conflicting interests. However, some scholars remain optimistic, viewing the FTA as a shared goal among the three nations. The trilateral FTA concept has been discussed for over two decades, with formal negotiations starting in 2012, though progress stalled in recent years due to the pandemic. While all three countries are members of the Regional Comprehensive Economic Partnership (RCEP), its scope falls short of a full FTA.

Garcia-Herrero expressed skepticism about progress under Japan’s new Prime Minister, Takaichi Sanae, citing her alignment with Trump-era policies. She added that the potential costs for Japan and South Korea might outweigh benefits, as China now produces goods it once imported from them.

However, Lian Degui, Director of the Japan Research Center at Shanghai International Studies University, believes Japan’s new government, despite its right-leaning stance, is unlikely to oppose cooperation with China and South Korea. "Negotiations won’t be smooth, but the outlook remains positive," he said.

EIU China Lead Economist Xu Yue suggested that Japan’s new administration might adopt a more pragmatic approach toward China, potentially easing tensions amid U.S. tariff hikes. Still, she noted limited room for further action since all three nations are already RCEP members, with potential FTA benefits lying in services and digital trade.

Former Japanese Prime Minister Hatoyama Yukio recently emphasized the need for Japan to reduce dependence on the U.S. and strengthen trilateral cooperation with China and South Korea, given America’s shifting priorities.

Minister Wang reiterated the importance of maintaining stable supply chains and upholding the WTO-centered multilateral trading system in meetings with both Japanese and South Korean counterparts. He called for enhanced coordination under RCEP and urged the resumption of FTA talks to bolster economic stability.