The Idea of
“East Asian Economic Community”
from Business Perspective
APEC OFFICIAL SYMPOSIUM
September 27, 2006
Kakutaro Kitashiro
Chairman, KEIZAI DOYUKAI
(Japan Association for Corporate Executives)
Chairman of the Board, IBM Japan Ltd.
AGENDA
Growing East Asia and Challenges
The Principles of East Asian Community
Recommendations to Realize the East Asian
Community
Growing East Asia and Challenges
GDP Growth Rate Projection for 2015
%
A nnual A verage G D P G row th R ate P rojection for 2015
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
J apan
US
EU
Japan
World Bank(2006)
IEA(2004)
Japanese Gov.(2004)
Average
US
C h in a
EU
In dia
China
A S EA N ４
India
N IE ｓ
ASEAN４ NIEｓ
1.7
1.9
3.6
2.3
2.0
2.1
6.1
5.0
5.5
4.7
6.1
3.8
6.1
3.8
1.5
1.7
3.1
3.0
1.8
2.0
6.9
6.0
4.1
4.8
3.1
4.3
4.1
4.7
The source : 2006 White Paper on International Economy and Trade
GDP Growth in East Asia
East Asia : (ASEAN10+Japan,China,Korea)
East Asia’s share in
global GDP
*2
East Asia’s share in
global export
*4
East Asia’s share in
World Investment *5
1980
2005
2015
(Forecast)
16.3%
20.2%
27.0% *3
14.1%
26.6%
-
6.8%
21.2% (36.3 times
in monetary terms)
*2 Calculation is based on the IMF World Economic Outlook Database.
*3 METI, Trade and Industry 2006 White Paper on Internal Economy and Trade 2006,Figure 2-1-1.
*4 *5 Prepared by the Mitsui Global Strategic Studies Institute(UNCTAD World Investment Report 2005)
Intra-regional Trade Ratio
EU15
East Asia
NAFTA
60%
54%
45%
80.0
70.0
’93:Single Market
completed
’87:Single
European Act
60.0
’93:ASEAN CEPT
50.0
40.0
’94:NAFTA
30.0
20.0
East A sia
EU 25
10.0
EU 15
N A FT A
0.0
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
The source : 2005 White Paper on International Economy and Trade
Japanese Trade Dependency on East Asia
1998 2005
Increase (of
which Chinese
contribution)
Share of Japan’s exports 34.0% 47.9%
to East Asia
+13.9%
(+8.2%)
Share of Japan’s imports 35.6% 44.7%
from East Asia
+9.1%
(+4.8%)
*7 Compiled by Mitsui Global Strategic Studies Institute based on data from IMF Direction of Trade Statistics,
CD-ROM July 2006, and ADB Key Indicators of Developing Asia and Pacific Countries.
GDP per Capita
1990
2005
Japan
24,724 dollars
35,787 dollars
Singapore
12,219 dollars
26,835 dollars
Brunei
15,049 dollars**
17,632 dollars
South Korea
5,893 dollars
16,422 dollars
Malaysia
2,432 dollars
5,040 dollars
Thailand
1,528 dollars
2,577 dollars
China
342 dollars
1,703 dollars
Indonesia
628 dollars
1,259 dollars
Philippines
725 dollars
1,159 dollars
97 dollars
612 dollars
Laos
210 dollars
463 dollars
Cambodia
106 dollars
375 dollars
Myanmar
68 dollars
97 dollars
Vietnam
Sources: “Global Economic Trends” edited by the Cabinet Office, Office of the Director General of Policy Coordination, and IMF World Economic Outlook.
** Based on the figure as of 1992 for Brunei.
*8
The World Competitiveness Factors Ranking
Economy
Country Government Business
Ranking
Efficiency Efficiency
Infrastructure
Efficiency
Hong Kong
2
1
1
16
Singapore
Japan
Taiwan
China Mainland
Malaysia
Thailand
3
2
7
5
17
18
19
23
31
24
17
20
23
14
30
20
2
20
37
31
32
21
28
48
38
49
60
47
45
51
45
44
57
24
56
61
Korea
Philippines
Indonesia
Source: IMD WORLD COMPETITIVENESS YEARBOOK 2006
Tariff Comparison
A llP roducts
A griculturalproducts
N on-A griculturalproducts
In
A u dia
st
ra
lia
Ja
pa
n
Ko
re
a
C
H o hin
ng a
Ko
n
Ta g
i
In w an
do
ne
M sia
al
ay
P h sia
ilip
pi
T h ne
ai
S i lan
ng d
ap
or
Vi e
et
na
m
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
The source : 2006 White Paper on International Economy and Trade
Effect on Trade Promotion
The risk of political
instability
$191B
Estimated
Effect of
Trade
Facilitation
Measures
56%
4%
Custom
clearance
Process
17%
Transparency*1
10%
T ariff
C uts
40%
$148B
Streamlining of
port operations
29%
*1 : Enhance the transparency of customs clearance formalities
The source : 2006 White Paper on International Economy and Trade
The Principles of East Asian Community
Various Functional and Regional Cooperation
the Bali Regional Ministerial
Meeting on Counter-Terrorism
ASEAN + 3
Japan, China
and Korea
Cooperation
UK France
Germany
Canada
US
ＥＵ
豪州 NZ
ＮＺ
Aus.
ＰＮＧ
The Chiang
Mai
Initiative ,
The Asian
Bond Market
Initiative
North Korea
Mongolia
The East Asian
summit
Brunei
ブルネイ
Vietnam
ベトナム
Laos
ラオス
ミャンマー
Myanmar
カンボジア
Cambodia
Indonesia
インドネシア
Malaysia
マレーシア
Philippines
フィリピン
シンガポール
Singapore
タイ
Thailand
Japan
日 本
中 国
China
韓 国
Korea
Bangladesh
Sri Lanka
インド
India
Russia
The Bali
Process
Pakistan
ASEAN
The Asian
Bond Fund
The Source ： The Ministry of Foreign Affairs of Japan, Asian and Oceanian Affairs Bureau
ARF
ReCAAP
Approach to the East Asian Community
 Road map for the realization of a “community”
 Share the common goal
 One step at a time
 Building equal partnerships
 Expansion centering on the ASEAN
 Realization of an open community
 Creation of a disparity correction mechanism
within East Asian region
Objective and Basic Principles
 Objective
Co-prosperity and co-existence within the
East Asian region
 Basic Principles
Democracy
Market economy
Basic human rights
Basic Rules of the East Asian Community
Mutual cooperation
Non-intervention in other countries’
internal affairs
Peaceful resolution of disputes
Renunciation of the use of military force
Correction of regional disparities
Equal partnerships
Recommendations to
Realize the East Asian Community
Recommendations to Japanese Gov.
 Early realization of heads of state summits
between Japan and China/South Korea
 Open the market for agricultural products, etc.
for the facilitation of intra-regional FTAs/EPAs
 Establish an East Asian Regional Development
Fund
 Launch a Council on the Promotion of the East
Asian Community
Innovation for Sustainable Growth in Asia
Key to Innovation
Talent
Investment
Infrastructure
Council on Competitiveness,
Innovate America (2004)
Talent
 Workforce Training
 Public expenditure on education
Investment
 Promote Market Economy
 Maximize FDI through deregulation
Infrastructure
 ODA and East Asian Regional
Development Fund
 Commercial system within the
region
 Corporate Social Responsibility in
the local communities
Conclusion
Co-prosperity and Co-existence
within the East Asian region
Japan: Four Recommendations
East Asia: Innovation for Sustainable Growth
Thank you
Back up chart
FDI to East Asia
Foreign Direct Investment
2004
East Asia
Contribution
Share
Japan
7,809
3,223
△ 58.7
△ 0.6
0.3
China
54,936
79,127
44.0
3.1
8.2
NIES
60,000
61,952
3.3
0.2
6.4
Korea
9,246
4,339
△ 53.1
△ 0.6
0.4
Taiwan
1,898
1,625
△ 14.4
△ 0.0
0.2
Hong Kong
34,036
35,905
5.5
0.2
3.7
Singapore
14,820
20,083
35.5
0.7
2.1
7,749
11,374
46.8
0.5
1.2
Thailand
1,414
4,008
183.4
0.3
0.4
Malaysia
4,624
3,976
△ 14.0
△ 0.1
0.4
Indonesia
1,023
2,258
120.8
0.2
0.2
688
1,132
64.5
0.1
0.1
782,839
964,744
23.2
23.2
100.0
ASEAN4
Philippines
World Total
2005
Growth
Rate
The source : JETRO White Paper on International Trade and Foreign Direct Investment 2006

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