At present, cementing friendly ties with its neighbours is a priority of China’s foreign policy. China is doing its best to build good-neighbourly relations and partnerships with them. East Asia is one of the most important areas for China. In recent years, China has sought not only to improve bilateral relations with other East Asian countries, but to place increasing importance on regionalism and regionalisation in East Asia. The Korean Peninsula is one of China’s most important neighbouring areas and China deals with Korean issues from a regional or East Asian perspective.

Although the process of regional economic integration and security cooperation in East Asia, compared with the European Union, has had a late start, during recent years regional institutions have made significant progress, including the Association of South-East Asian Nations (ASEAN), ASEAN+3, ASEAN+1, the ASEAN Regional Forum (ARF), the East Asia Summit (EAS), Asia-Pacific Economic Cooperation (APEC) and the six-party talks on the North Korean nuclear issue. These regional institutions have been playing an increasingly important role in the economic and security arenas in East Asia.

These institutions can be divided into diverse types. The first type includes those institutions focused on economic issues, such as APEC. The second type includes those focused on security issues, such as the ARF. The third type are those that deal with economic and security issues, such as ASEAN, ASEAN+3, ASEAN+1 and the EAS.

These institutions are at different levels of development in terms of economic cooperation or security dialogue and cooperation. With regard to economic integration, ASEAN is more advanced than other institutions. Some institutions are still in the process of formation. For example, in North-East Asia, the six-party talks on North Korea could develop gradually into an important mechanism for subregional security dialogue and cooperation, if the North Korean nuclear issue can be resolved within its framework.

ASEAN+3 could develop into one of the most important institutions of regional economic integration and security cooperation. The Asian financial crisis of 1997 made ASEAN member states realise that it was necessary for them to promote regional cooperation with the rest of East Asia. This is because it is difficult for ASEAN, a group of developing countries with small markets and insufficient capital, to overcome crises simply by strengthening cohesiveness. So far, ASEAN has achieved economic development through participation in dynamic trade and investment relations in East Asia. Consequently, it is essential for ASEAN to strengthen cooperation with other East Asian countries, such as China, Japan and South Korea, to overcome its economic difficulties and achieve its long-term development. In November 1997, the first ASEAN+3 (China, Japan and South Korea) summit meeting was held. At the Manila meeting in November 1999, the leaders of ASEAN+3 issued a joint statement on East Asian cooperation, in which they agreed to strengthen cooperation in a broad range of fields, including politics, security, economics and culture. Cooperation in the economic and social fields was emphasised.

In line with these developments, at the first ASEAN+3 meeting of economic ministers held in Yangon, Myanmar, in May 2000, the ministers agreed to promote cooperation in nine specific fields, including expanded trade and investment, the information technology (IT) sector and Mekong Basin development. They shared the view that the meeting could provide a valuable opportunity for further collaboration, promote a cohesive response to the challenge of globalisation and consolidate the region’s role as a world growth centre.

ASEAN+3 cooperation has made great strides in the financial field. In May 2000, the ASEAN+3 finance ministers gathered in Chiang Mai, Thailand, and agreed to promote measures to strengthen financial cooperation under the so-called Chiang Mai Initiative. Previously, Indonesia, Malaysia, the Philippines, Singapore and Thailand had concluded currency swap agreements worth US$40 million to prevent the recurrence of a currency crisis. Under the Chiang Mai Initiative, these agreements were expanded to include other ASEAN states and China, Japan and South Korea. In addition, the finance ministers agreed to build a ‘repo’ network of securities repurchasing agreements among ASEAN+3 members (National Institute for Defence Studies 2001:81). The progress of ASEAN+3 cooperation in the financial field reflects the fact that during the Asian financial crisis in 1997, East Asian countries were unable to receive meaningful assistance from the United States and the European Union. East Asian countries had little influence on the policy of the international financial institutions, especially the International Monetary Fund (IMF), which were under the strong influence of the United States and major European countries. In light of this experience, East Asian countries recognised the need to prepare their own countermeasures in case of another financial crisis.

At the fourth ASEAN+3 summit meeting, held in Singapore in November 2000, the leaders reaffirmed the importance of promoting the Chiang Mai Initiative and agreed to organise a study group with a view to creating an East Asian Free Trade Area (National Institute for Defence Studies 2001:81). Since then, a framework for cooperation in trade, as well as finance, has been developing among the ASEAN+3. With economic interdependence between countries in East Asia growing, ASEAN+3 cooperation in the economic field is expected to strengthen in the coming years.

The establishment of the new strategic stability framework between major powers will be beneficial for the long-term peaceful and stable international security environment, which is necessary for China’s economic development and national interests. It will also be conducive to global stability and security, including in the Asia-Pacific region, and to China’s continuing role as a responsible power, benefiting the interests of all other nations.

China’s East Asian policy focuses on continuing to cement China’s friendly ties with its neighbours, and persists in building good-neighbourly relations and partnerships with them. China regards this policy as an important part of its greater efforts to seek and maintain a stable and peaceful international security environment in the long term. China will step up regional cooperation, and increase its exchanges and cooperation with its surrounding countries to a new level.