Changing Statuses of China and Japan in East Asia Intra-regional Trade and Their Impacts

　　Li Xiao, Professor, Economics School, Jilin University

　　Feng Yongqi, PhD Candidate, Economics School, Jilin University

　　Abstract: China and Japan are the two largest economic blocs in the East Asian region. Changes to their respective status and influence in East Asia regional trade have enormous impacts on their mutual and intra-regional economic and financial cooperation. Through an account of the current state of East Asian intra-regional trade, this article analyses the statuses, as well as their trajectories of change, of China and Japan in East Asia regional trade. This is performed through the perspectives the trade structure of intermediate and final products and trade competition pressures. This analysis concludes that first, at the present stage, neither China nor Japan can dominate the regional market as the single, most important market provider for final products. Second, as China becomes increasingly important as a base for export processing, this might impact on the practice of using the renminbi as the currency for settlement of trade accounts. Third, changes to trade competition pressures faced by China and Japan are conducive to raising the profile of the Chinese currency in intra-regional monetary cooperation, and extend the influence of the renminbi in the East Asian region.